Medicare and Medicaid Programs; CY 2015 Home Health Prospective Payment System Rate Update; Home Health Quality Reporting Requirements; and Survey and Enforcement Requirements for Home Health Agencies, 66031-66118 [2014-26057]

Download as PDF Vol. 79 Thursday, No. 215 November 6, 2014 Part II Department of Health and Human Services tkelley on DSK3SPTVN1PROD with RULES2 Centers for Medicare & Medicaid Services 42 CFR Parts 409, 424, et al. Medicare and Medicaid Programs; CY 2015 Home Health Prospective Payment System Rate Update; Home Health Quality Reporting Requirements; and Survey and Enforcement Requirements for Home Health Agencies; Final Rule VerDate Sep<11>2014 23:01 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\06NOR2.SGM 06NOR2 66032 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 409, 424, 484, 488, 498 [CMS–1611–F] RIN 0938–AS14 Medicare and Medicaid Programs; CY 2015 Home Health Prospective Payment System Rate Update; Home Health Quality Reporting Requirements; and Survey and Enforcement Requirements for Home Health Agencies Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Final rule. AGENCY: This final rule updates Home Health Prospective Payment System (HH PPS) rates, including the national, standardized 60-day episode payment rates, the national per-visit rates, and the non-routine medical supply (NRS) conversion factor under the Medicare prospective payment system for home health agencies (HHAs), effective for episodes ending on or after January 1, 2015. As required by the Affordable Care Act, this rule implements the second year of the four-year phase-in of the rebasing adjustments to the HH PPS payment rates. This rule provides information on our efforts to monitor the potential impacts of the rebasing adjustments and the Affordable Care Act mandated face-to-face encounter requirement. This rule also implements: Changes to simplify the face-to-face encounter regulatory requirements; changes to the HH PPS case-mix weights; changes to the home health quality reporting program requirements; changes to simplify the therapy reassessment timeframes; a revision to the Speech-Language Pathology (SLP) personnel qualifications; minor technical regulations text changes; and limitations on the reviewability of the civil monetary penalty provisions. Finally, this rule also discusses Medicare coverage of insulin injections under the HH PPS, the delay in the implementation of the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD– 10–CM), and a HH value-based purchasing (HH VBP) model. DATES: Effective Date: These regulations are effective on January 1, 2015. FOR FURTHER INFORMATION CONTACT: Hillary Loeffler, (410) 786–0456, for general information about the HH PPS. tkelley on DSK3SPTVN1PROD with RULES2 SUMMARY: VerDate Sep<11>2014 23:01 Nov 05, 2014 Jkt 235001 Joan Proctor, (410) 786–0949, for information about the HH PPS Grouper, ICD–9–CM coding, and ICD–10–CM Conversion. Kristine Leddy, (410) 786–8953, for information about rebasing and the HH PPS case-mix weights. Hudson Osgood, (410) 786–7897, for information about the HH market basket. Alan Levitt, MD, (410) 786–6892, for information about the HH quality reporting program. Lori Teichman, (410) 786–6684, for information about HHCAHPS. Peggye Wilkerson, (410) 786–4857, for information about survey and enforcement requirements for HHAs. Robert Flemming, (410) 786–4830, for information about the HH VBP model. Danielle Shearer, (410) 786–6617, for information about SLP personnel qualifications. SUPPLEMENTARY INFORMATION: Table of Contents I. Executive Summary A. Purpose B. Summary of the Major Provisions C. Summary of Costs and Benefits II. Background A. Statutory Background B. System for Payment of Home Health Services C. Updates to the HH PPS III. Provisions of the Proposed Rule and Responses to Comments A. Monitoring for Potential Impacts— Affordable Care Act Rebasing Adjustments and the Face-to-Face Encounter Requirement 1. Affordable Care Act Rebasing Adjustments 2. Affordable Care Act Face-to-Face Encounter Requirement B. Changes to the Face-to-Face Encounter Documentation Requirements 1. Background on Statutory and Regulatory Requirements 2. Changes to the Face-to-Face Encounter Narrative Requirement and NonCoverage of Associated Physician Certification/Re-Certification Claims 3. Clarification on When Documentation of a Face-to-Face Encounter is Required C. Recalibration of the HH PPS Case-Mix Weights D. CY 2015 Home Health Rate Update 1. CY 2015 Home Health Market Basket Update 2. Home Health Care Quality Reporting Program (HH QRP) a. General Considerations Used for Selection of Quality Measures for the HH QRP b. Background and Quality Reporting Requirements c. OASIS Data Submission and OASIS Data for Annual Payment Update d. Updates to HH QRP Measures After NQF Review e. Home Health Care CAHPS Survey (HHCAHPS) PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 3. CY 2015 Home Health Wage Index a. Background b. Update c. Implementation of New Labor Market Delineations 4. CY 2015 Annual Payment Update a. Background b. CY 2015 National, Standardized 60-Day Episode Payment Rate c. CY 2015 National Per-Visit Rates d. Low-Utilization Payment Adjustment (LUPA) Add-On Factors e. CY 2015 Nonroutine Medical Supply Conversion Factor and Relative Weights f. Rural Add-On E. Payments for High-Cost Outliers under the HH PPS 1. Background 2. Fixed Dollar Loss (FDL) Ratio and LossSharing Ratio F. Medicare Coverage of Insulin Injections under the HH PPS G. Implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD–10–CM) H. Change to the Therapy Reassessment Timeframes I. HH Value-Based Purchasing (HH VBP) Model J. Advancing Health Information Exchange K. Revisions to the Speech-Language Pathologist Personnel Qualifications L. Technical Regulations Text Changes M. Survey and Enforcement Requirements for Home Health Agencies 1. Statutory Background and Authority 2. Reviewability Pursuant to Appeals 3. Technical Adjustment IV. Collection of Information Requirements V. Regulatory Impact Analysis VI. Federalism Analysis Regulations Text Acronyms In addition, because of the many terms to which we refer by abbreviation in this final rule, we are listing these abbreviations and their corresponding terms in alphabetical order below: ACH LOS Acute Care Hospital Length of Stay ADL Activities of Daily Living APU Annual Payment Update BBA Balanced Budget Act of 1997, Pub. L. 105–33 BBRA Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, Pub. L. 106–113 CAD Coronary Artery Disease CAH Critical Access Hospital CBSA Core-Based Statistical Area CASPER Certification and Survey Provider Enhanced Reports CHF Congestive Heart Failure CMI Case-Mix Index CMN Certificate of Medical Necessity CMP Civil Money Penalty CMS Centers for Medicare & Medicaid Services CoPs Conditions of Participation COPD Chronic Obstructive Pulmonary Disease CPI Center for Program Integrity CVD Cardiovascular Disease CY Calendar Year E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations DM Diabetes Mellitus DME Durable Medical Equipment DMEPOS Durable Medical Equipment, Prosthetics, Orthotics, and Supplies DIF DME Information Form DRA Deficit Reduction Act of 2005, Pub. L. 109–171, enacted February 8, 2006 FDL Fixed Dollar Loss FI Fiscal Intermediaries FR Federal Register FY Fiscal Year HAVEN Home Assessment Validation and Entry System HCC Hierarchical Condition Categories HCPCS Healthcare Common Procedure Coding System HCIS Health Care Information System HH Home Health HHA Home Health Agency HHCAHPS Home Health Care Consumer Assessment of Healthcare Providers and Systems Survey HH PPS Home Health Prospective Payment System HHRG Home Health Resource Group HIPPS Health Insurance Prospective Payment System ICD–9–CM International Classification of Diseases, Ninth Revision, Clinical Modification ICD–10–CM International Classification of Diseases, Tenth Revision, Clinical Modification IH Inpatient Hospitalization IRF Inpatient Rehabilitation Facility IT Information Technology LTCH Long-Term Care Hospital LUPA Low-Utilization Payment Adjustment MEPS Medical Expenditures Panel Survey MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. 108–173, enacted December 8, 2003 MSA Metropolitan Statistical Area MSS Medical Social Services NQF National Quality Forum NRS Non-Routine Supplies OASIS Outcome and Assessment Information Set OBRA Omnibus Budget Reconciliation Act of 1987, Pub. L. 100–2–3, enacted December 22, 1987 OCESAA Omnibus Consolidated and Emergency Supplemental Appropriations Act, Pub. L. 105–277, enacted October 21, 1998 OES Occupational Employment Statistics OIG Office of Inspector General OT Occupational Therapy OMB Office of Management and Budget ONC Office of the National Coordinator for Health IT MFP Multifactor productivity PAMA Protecting Access to Medicare Act of 2014 PAC–PRD Post-Acute Care Payment Reform Demonstration PEP Partial Episode Payment Adjustment PT Physical Therapy QAO Quality Assessments Only QAP Quality Assurance Plan PRRB Provider Reimbursement Review Board RAP Request for Anticipated Payment RF Renal Failure RFA Regulatory Flexibility Act, Pub. L. 96—354 VerDate Sep<11>2014 23:01 Nov 05, 2014 Jkt 235001 RHHIs Regional Home Health Intermediaries RIA Regulatory Impact Analysis SAF Standard Analytic File SLP Speech-Language Pathology SN Skilled Nursing SNF Skilled Nursing Facility SOC Start of Care UMRA Unfunded Mandates Reform Act of 1995. I. Executive Summary A. Purpose This rule updates the payment rates for HHAs for calendar year (CY) 2015, as required under section 1895(b) of the Social Security Act (the Act). This will reflect the second year of the four-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment rate, the national pervisit rates, and the NRS conversion factor finalized in the CY 2014 HH PPS final rule (78 FR 72256), required under section 3131(a) of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111–148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111–152) (collectively referred to as the ‘‘Affordable Care Act’’). Updates to payment rates under the HH PPS will also include a change in the home health wage index to incorporate the new Office of Management and Budget (OMB) corebased statistical area (CBSA) definitions and updates to the payment rates by the home health payment update percentage reflective of the productivity adjustment mandated by 3401(e) of the Affordable Care Act. This final rule also discusses: Our efforts to monitor the potential impacts of the Affordable Care Act mandated rebasing adjustments and the face-toface encounter requirement (sections 3131(a) and 6407, respectively, of the Affordable Care Act); coverage of insulin injections under the HH PPS; and the delay in the implementation of the International Classification of Diseases, 10th Edition, Clinical Modification (ICD–10–CM) as a result of recent Congressional action (section 212 of the Protecting Access to Medicare Act, Public Law 113–93 (‘‘PAMA’’)). This final rule also: Simplifies the regulations at § 424.22(a)(1)(v) that govern the face-to-face encounter requirement mandated by section 6407 of the Affordable Care Act; recalibrates the HH PPS case-mix weights under section 1895(b)(4)(A)(i) and (b)(4)(B) of the Act; makes changes to the home health quality reporting program requirements under section 1895(b)(3)(B)(v)(II) of the Act; simplifies the therapy reassessment timeframes specified in regulation at PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 66033 § 409.44(c)(2)(C) and (D); revises the personnel qualifications for SpeechLanguage Pathology (SLP) at § 484.4; and makes minor technical changes to the regulations text at § 424.22(b)(1) and § 484.250(a)(1). This final rule will also place limitations on the reviewability of CMS’s decision to impose a civil monetary penalty for noncompliance with Federal participation requirements. Finally, this rule discusses comments received on the HH Value-Based Purchasing (VBP) model. B. Summary of the Major Provisions As required by section 3131(a) of the Affordable Care Act and finalized in the CY 2014 HH final rule, ‘‘Medicare and Medicaid Programs; Home Health Prospective Payment System Rate Update for CY 2014, Home Health Quality Reporting Requirements, and Cost Allocation of Home Health Survey Expenses’’ (78 FR 77256, December 2, 2013), we are implementing the second year of the four-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment amount, the national per-visit rates and the NRS conversion factor in section III.D.4. The rebasing adjustments for CY 2015 will reduce the national, standardized 60-day episode payment amount by $80.95, increase the national per-visit payment amounts by 3.5 percent of the national per-visit payment amounts in CY 2010 with the increases ranging from $1.79 for home health aide services to $6.34 for medical social services as described in section II.C, and reduce the NRS conversion factor by 2.82 percent. This final rule also discusses our efforts to monitor the potential impacts of the rebasing adjustments and the Affordable Care Act mandated face-toface encounter requirement in sections III.A. Section III B implements changes to the face-to-face encounter narrative requirement by eliminating the narrative as part of the certification of eligibility and by outlining procedures for obtaining documentation from the certifying physician and/or the acute/ post-acute care facility that: (1) Establish that the patient was eligible for the home health benefit; and (2) demonstrate that the face-to-face encounter was related to the primary reason the patient requires home health services, occurred within the required timeframe, and was performed either by the certifying physician, an acute/postacute care physician that cared for the patient in that setting, or allowed nonphysician practitioner (NPP). In addition, associated physician claims for certification/re-certification of eligibility (patient not present) will not E:\FR\FM\06NOR2.SGM 06NOR2 66034 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations be eligible to be paid when a patient does not meet home health eligibility criteria. We will also clarify that the face-to-face encounter requirement is applicable for all episodes initiated with the completion of a Start-of-Care OASIS assessment, which we consider certifications, not re-certifications. In section III.C of the final rule, we are recalibrating the HH PPS case-mix weights, using the most current cost and utilization data available, in a budget neutral manner. In section III.D.1 of this final rule, we are updating the payment rates under the HH PPS by the home health payment update percentage of 2.1 percent (using the 2010-based Home Health Agency (HHA) market basket update of 2.6 percent, minus 0.5 percentage point for productivity as required by section 1895(b)(3)(B)(vi)(I) of the Act. In section III.D.3 of this final rule, we are updating the home health wage index using a 50/50 blend of the existing core-based statistical area (CBSA) designations and the new CBSA designations set out in a February 28, 2013, Office of Management and Budget (OMB) bulletin. This final rule also implements changes to the home health quality reporting program in section III.D.2, including the establishment of a minimum threshold for submission of OASIS assessments for purposes of quality reporting compliance, the establishment of a policy for the adoption of changes to measures that occur in-between rulemaking cycles as a result of the NQF process, and submission dates for the HHCAHPS Survey moving forward through CY 2017. In section III.E of this final rule, we discuss our rationale for maintaining the existing fixed-dollar loss (FDL) and loss-sharing ratios used in calculating high-cost outlier payments under the HH PPS. In section III.F, we discuss our recent analysis of home health claims identified with skilled nursing visits that appear to have been for the sole purpose of insulin injection assistance, without any secondary diagnoses indicating that the patient was physically or mentally unable to selfinject. We discuss, in section III.G of this final rule, the delay in the implementation of ICD–10–CM as a result of section 212 of PAMA. In section III.H of this final rule, we discuss our finalizing of a change in the therapy reassessment regulations by requiring that therapy reassessments are to occur at least every 30 calendar days. In section III.I of this final rule, we discuss a HH VBP model. In section III.J we discuss our revision to the personnel qualifications for SLP. In section III.K we discuss minor technical regulations text changes. In section III.L we discuss our revision to the civil monetary provisions, which place limitations on the reviewability of the civil monetary penalty imposed on a HHA for noncompliance with federal participation requirements. C. Summary of Costs and Transfers TABLE 1—SUMMARY OF COSTS AND TRANSFERS Provision Description Costs Transfers CY 2015 HH PPS Payment Rate Update. A net reduction in burden of $21.55 million associated with certifying patient eligibility for home health services & certification form revisions. The overall economic impact of this final rule is an estimated $60 million in decreased payments to HHAs. II. Background tkelley on DSK3SPTVN1PROD with RULES2 A. Statutory Background The Balanced Budget Act of 1997 (BBA) (Pub. L. 105–33, enacted August 5, 1997), significantly changed the way Medicare pays for Medicare HH services. Section 4603 of the BBA mandated the development of the HH PPS. Until the implementation of the HH PPS on October 1, 2000, HHAs received payment under a retrospective reimbursement system. Section 4603(a) of the BBA mandated the development of a HH PPS for all Medicare-covered HH services provided under a plan of care (POC) that were paid on a reasonable cost basis by adding section 1895 of the Social Security Act (the Act), entitled ‘‘Prospective Payment For Home Health Services.’’ Section 1895(b)(1) of the Act requires the Secretary to establish a HH PPS for all costs of HH services paid under Medicare. Section 1895(b)(3)(A) of the Act requires the following: (1) The computation of a standard prospective payment amount include all costs for HH services covered and paid for on a reasonable cost basis and that such amounts be initially based on the most recent audited cost report data available VerDate Sep<11>2014 23:01 Nov 05, 2014 Jkt 235001 to the Secretary; and (2) the standardized prospective payment amount be adjusted to account for the effects of case-mix and wage levels among HHAs. Section 1895(b)(3)(B) of the Act addresses the annual update to the standard prospective payment amounts by the HH applicable percentage increase. Section 1895(b)(4) of the Act governs the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act require the standard prospective payment amount to be adjusted for case-mix and geographic differences in wage levels, respectively. Section 1895(b)(4)(B) of the Act requires the establishment of an appropriate case-mix change adjustment factor for significant variation in costs among different units of services. Similarly, section 1895(b)(4)(C) of the Act requires the establishment of wage adjustment factors that reflect the relative level of wages, and wage-related costs applicable to HH services furnished in a geographic area compared to the applicable national average level. Under section 1895(b)(4)(C) of the Act, the wageadjustment factors used by the Secretary may be the factors used under section 1886(d)(3)(E) of the Act. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 Section 1895(b)(5) of the Act gives the Secretary the option to make additions or adjustments to the payment amount otherwise paid in the case of outliers due to unusual variations in the type or amount of medically necessary care. Section 3131(b)(2) of the Patient Protection and Affordable Care Act of 2010 (the Affordable Care Act) (Pub. L. 111–148, enacted March 23, 2010) revised section 1895(b)(5) of the Act so that total outlier payments in a given year would not exceed 2.5 percent of total payments projected for the year. The provision also made permanent a 10 percent agency-level outlier payment cap. In accordance with the statute, as amended by the BBA, we published a final rule in the July 3, 2000 Federal Register (65 FR 41128) to implement the HH PPS legislation. The July 2000 final rule established requirements for the new HH PPS for HH services as required by section 4603 of the BBA, as subsequently amended by section 5101 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act (OCESAA) for Fiscal Year 1999, (Pub. L. 105–277, enacted October 21, 1998); and by sections 302, 305, and 306 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 Act (BBRA) of 1999, (Pub. L. 106–113, enacted November 29, 1999). The requirements include the implementation of a HH PPS for HH services, consolidated billing requirements, and a number of other related changes. The HH PPS described in that rule replaced the retrospective reasonable cost-based system that was used by Medicare for the payment of HH services under Part A and Part B. For a complete and full description of the HH PPS as required by the BBA, see the July 2000 HH PPS final rule (65 FR 41128 through 41214). Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109–171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v) to the Act, requiring HHAs to submit data for purposes of measuring health care quality, and links the quality data submission to the annual applicable percentage increase. This data submission requirement is applicable for CY 2007 and each subsequent year. If a HHA does not submit quality data, the HH market basket percentage increase is reduced by 2 percentage points. In the November 9, 2006 Federal Register (71 FR 65884, 65935), we published a final rule to implement the pay-for-reporting requirement of the DRA, which was codified at § 484.225(h) and (i) in accordance with the statute. The pay-for-reporting requirement was implemented on January 1, 2007. The Affordable Care Act made additional changes to the HH PPS; section 3131(c) of the Affordable Care Act amended section 421(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108–173, enacted on December 8, 2003) as amended by section 5201(b) of the DRA. The amended section 421(a) of the MMA now requires, for HH services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act) with respect to episodes and visits ending on or after April 1, 2010, and before January 1, 2016, that the Secretary increase, by 3 percent, the payment amount otherwise made under section 1895 of the Act. B. System for Payment of Home Health Services Generally, Medicare makes payment under the HH PPS on the basis of a national standardized 60-day episode payment rate that is adjusted for the applicable case-mix and wage index. The national standardized 60-day episode rate includes the six HH disciplines (skilled nursing, HH aide, physical therapy, speech-language pathology, occupational therapy, and VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 medical social services). Payment for non-routine supplies (NRS) is no longer part of the national standardized 60-day episode rate and is computed by multiplying the relative weight for a particular NRS severity level by the NRS conversion factor (See section II.D.4.e). Payment for durable medical equipment covered under the HH benefit is made outside the HH PPS payment system. To adjust for case-mix, the HH PPS uses a 153-category case-mix classification system to assign patients to a home health resource group (HHRG). The clinical severity level, functional severity level, and service utilization are computed from responses to selected data elements in the OASIS assessment instrument and are used to place the patient in a particular HHRG. Each HHRG has an associated case-mix weight which is used in calculating the payment for an episode. For episodes with four or fewer visits, Medicare pays national per-visit rates based on the discipline(s) providing the services. An episode consisting of four or fewer visits within a 60-day period receives what is referred to as a lowutilization payment adjustment (LUPA). Medicare also adjusts the national standardized 60-day episode payment rate for certain intervening events that are subject to a partial episode payment adjustment (PEP adjustment). For certain cases that exceed a specific cost threshold, an outlier adjustment may also be available. C. Updates to the HH PPS As required by section 1895(b)(3)(B) of the Act, we have historically updated the HH PPS rates annually in the Federal Register. The August 29, 2007 final rule with comment period set forth an update to the 60-day national episode rates and the national per-visit rates under the HH PPS for CY 2008. The CY 2008 HH PPS final rule included an analysis performed on CY 2005 HH claims data, which indicated a 12.78 percent increase in the observed case-mix since 2000. Case-mix represents the variations in conditions of the patient population served by the HHAs. Subsequently, a more detailed analysis was performed on the 2005 case-mix data to evaluate if any portion of the 12.78 percent increase was associated with a change in the actual clinical condition of HH patients. We examined data on demographics, family severity, and non-HH Part A Medicare expenditures to predict the average case-mix weight for 2005. We identified 8.03 percent of the total case-mix change as real, and therefore, decreased the 12.78 percent of total case-mix change by 8.03 percent to get a final PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 66035 nominal case-mix increase measure of 11.75 percent (0.1278 * (1—0.0803) = 0.1175). To account for the changes in casemix that were not related to an underlying change in patient health status, we implemented a reduction, over 4 years, to the national, standardized 60-day episode payment rates. That reduction was to be 2.75 percent per year for 3 years beginning in CY 2008 and 2.71 percent for the fourth year in CY 2011. In the CY 2011 HH PPS final rule (76 FR 68532), we updated our analyses of case-mix change and finalized a reduction of 3.79 percent, instead of 2.71 percent, for CY 2011 and deferred finalizing a payment reduction for CY 2012 until further study of the case-mix change data and methodology was completed. In the CY 2012 HH PPS final rule (76 FR 68526), we updated the 60-day national episode rates and the national per-visit rates. In addition, as discussed in the CY 2012 HH PPS final rule (76 FR 68528), our analysis indicated that there was a 22.59 percent increase in overall case-mix from 2000 to 2009 and that only 15.76 percent of that overall observed case-mix percentage increase was due to real case-mix change. As a result of our analysis, we identified a 19.03 percent nominal increase in casemix. At that time, to fully account for the 19.03 percent nominal case-mix growth identified from 2000 to 2009, we finalized a 3.79 percent payment reduction in CY 2012 and a 1.32 percent payment reduction for CY 2013. In the CY 2013 HH PPS final rule (77 FR 67078), we implemented a 1.32 percent reduction to the payment rates for CY 2013 to account for nominal case-mix growth from 2000 through 2010. When taking into account the total measure of case-mix change (23.90 percent) and the 15.97 percent of total case-mix change estimated as real from 2000 to 2010, we obtained a final nominal case-mix change measure of 20.08 percent from 2000 to 2010 (0.2390 * (1—0.1597) = 0.2008). To fully account for the remainder of the 20.08 percent increase in nominal case-mix beyond that which was accounted for in previous payment reductions, we estimated that the percentage reduction to the national, standardized 60-day episode rates for nominal case-mix change will be 2.18 percent. Although we considered proposing a 2.18 percent reduction to account for the remaining increase in measured nominal case-mix, we finalized the 1.32 percent payment reduction to the national, standardized 60-day episode rates in the CY 2012 HH PPS final rule (76 FR 68532). E:\FR\FM\06NOR2.SGM 06NOR2 66036 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Section 3131(a) of the Affordable Care Act requires that, beginning in CY 2014, CMS apply an adjustment to the national, standardized 60-day episode rate and other amounts that reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors. Additionally, CMS must phase in any adjustment over a four-year period in equal increments, not to exceed 3.5 percent of the amount (or amounts) as of the date of enactment of the Affordable Care Act, and fully implement the rebasing adjustments by CY 2017. The statute specifies that the maximum rebasing adjustment is to be no more than 3.5 percent per year of the CY 2010 rates. Therefore, in the CY 2014 HH PPS final rule (78 FR 72256) for each year, CY 2014 through CY 2017, we finalized a fixed-dollar reduction to the national, standardized 60-day episode payment rate of $80.95 per year, increases to the national per-visit payment rates per year as reflected in Table 2, and a decrease to the NRS conversion factor of 2.82 percent per year. We also finalized three separate LUPA add-on factors for skilled nursing, physical therapy, and speech-language pathology and removed 170 diagnosis codes from assignment to diagnosis groups in the HH PPS Grouper. TABLE 2—MAXIMUM ADJUSTMENTS TO THE NATIONAL PER-VISIT PAYMENT RATES (NOT TO EXCEED 3.5 PERCENT OF THE AMOUNT(S) IN CY 2010) 2010 National per-visit payment rates Skilled Nursing Home Health Aide ............. Physical Therapy .............. Occupational Therapy ....... Speech-Language Pathology ......... Medical Social Services ...... Maximum adjustments per year (CY 2014 through CY 2017) $113.01 $3.96 51.18 1.79 123.57 4.32 124.40 4.35 134.27 4.70 181.16 6.34 III. Provisions of the Proposed Rule and Responses to Comments We received approximately 337 timely responses from the public, many of which contained multiple comments on the CY 2015 HH PPS proposed rule (79 FR 38366). Many of the comments were identical, but submitted by multiple commenters. We received comments from various trade associations, HHAs, individual registered nurses, physicians, clinicians, therapists, therapy assistants, health care industry organizations, and health care consulting firms. The following sections, arranged by subject area, include a summary of the public comments received, and our responses. A. Monitoring for Potential Impacts— Affordable Care Act Rebasing Adjustments and the Face-to-Face Encounter Requirement 1. Affordable Care Act Rebasing Adjustments As we stated in the CY 2015 HH PPS proposed rule (79 FR 38370), we do not have a sufficient amount of CY 2014 home health claims data to analyze as part of our effort in monitoring the potential impacts of the rebasing adjustments finalized in the CY 2014 HH PPS final rule (78 FR 72293). However, we analyzed 2012 home health agency cost report data to determine whether the average cost per episode was higher using 2012 cost report data compared to the 2011 cost report data used in calculating the rebasing adjustments. Specifically, we re-estimated the cost of a 60-day episode using 2012 cost report and 2012 claims data, rather than using 2011 cost report and 2012 claims data. To determine the 2012 average cost per visit per discipline, we applied the same trimming methodology outlined in the CY 2014 HH PPS proposed rule (78 FR 40284) and weighted the costs per visit from the 2012 cost reports by size, facility type, and urban/rural location so the costs per visit were nationally representative. The 2012 average number of visits was taken from 2012 claims data. We estimate the cost of a 60-day episode to be $2,413.82 using 2012 cost report data (Table 3). TABLE 3—AVERAGE COSTS PER VISIT AND AVERAGE NUMBER OF VISITS FOR A 60-DAY EPISODE 2012 Average costs per visit Discipline 2012 Average number of visits $130.49 61.62 160.03 157.78 172.08 210.36 9.55 2.60 4.80 1.09 0.22 0.14 Skilled Nursing ........................................................................................................................... Home Health Aide ..................................................................................................................... Physical Therapy ....................................................................................................................... Occupational Therapy ................................................................................................................ Speech-Language Pathology .................................................................................................... Medical Social Services ............................................................................................................. Total .................................................................................................................................... 2012 60-day episode costs $ 1,246.18 160.21 768.14 171.98 37.86 29.45 2,413.82 tkelley on DSK3SPTVN1PROD with RULES2 Source: FY 2012 Medicare cost report data and 2012 Medicare claims data from the standard analytic file (as of June 2013) for episodes ending on or before December 31, 2012 for which we could link an OASIS assessment. Using the current claims data for CY 2013 (as of June 30, 2014), we reexamined the 2012 visit distribution VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 and re-calculated the 2013 estimated cost per episode using the updated 2013 visit profile. We estimate the 2013 60- PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 day episode cost to be $2,485.24 (Table 4). E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 66037 TABLE 4—2013 ESTIMATED COST PER EPISODE 2012 Average costs per visit Discipline Skilled Nursing ............................................................................................. Home Health Aide ....................................................................................... Physical Therapy ......................................................................................... Occupational Therapy .................................................................................. Speech-Language Pathology ...................................................................... Medical Social Services ............................................................................... 2013 Average number of visits 2013 HH Market basket 2013 Estimated cost per episode 9.28 2.41 5.03 1.22 0.25 0.14 1.023 1.023 1.023 1.023 1.023 1.023 $1,238.80 151.92 823.46 196.92 44.01 30.13 $130.49 61.62 160.03 157.78 172.08 210.36 Total ...................................................................................................... 2,485.24 tkelley on DSK3SPTVN1PROD with RULES2 Source: FY 2012 Medicare cost report data and 2013 Medicare claims data from the standard analytic file (as of June 30, 2014) for episodes (excluding low-utilization payment adjusted episodes and partial-episode-payment adjusted episodes) ending on or before December 31, 2013 for which we could link an OASIS assessment. In the CY 2014 HH PPS final rule (78 FR 72277), using 2011 cost report data, we estimated the 2012 60-day episode cost to be about $2,507.83 ($2,453.71 * 0.9981 * 1.024) and the 2013 60-day episode cost to be $2,565.51 ($2,453.71 * 0.9981 * 1.024 * 1.023). Using 2012 cost report data, the 2012 and 2013 estimated cost per episode ($2,413.82 and $2,485.24, respectively) are lower than the episode costs we estimated using 2011 cost report data for the CY 2014 HH PPS final rule.1 In the CY 2014 HH PPS final rule, we stated that our analysis of 2011 cost report data and 2012 claims data indicated a need for a ¥3.45 percent rebasing adjustment to the national, standardized 60-day episode payment rate each year for four years. However, as specified by statute, the rebasing adjustment is limited to 3.5 percent of the CY 2010 national, standardized 60day episode payment rate of $2,312.94 (74 FR 58106), or $80.95. We stated that given that a ¥3.45 percent adjustment for CY 2014 through CY 2017 will result in larger dollar amount reductions than the maximum dollar amount allowed under section 3131(a) of the Affordable Care Act of $80.95, we are limited to implementing a reduction of $80.95 (approximately 2.8 percent for CY 2014) to the national, standardized 60-day episode payment amount each year for CY 2014 through CY 2017. Our latest analysis of 2012 cost report and 2013 claims data suggests that an even larger reduction (¥4.21 percent) than the reduction described in the CY 2014 final rule (¥3.45 percent) will be needed in order to align payments to costs. We stated in the CY 2015 HH PPS proposed rule that we would continue to monitor 1 The 2012 estimated cost per episode cited is based on FY 2012 cost report data and CY 2012 claims data (as of June 30, 2013) and the 2013 estimated cost per episode is based on FY 2012 cost report data and CY 2013 claims data (as of June 30, 2014). VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 potential impacts of rebasing as more data become available (79 FR 38371). Although we finalized the rebasing adjustments in the CY 2014 HH PPS final rule and did not propose any changes to those adjustments, we received a number of comments on the rebasing and on our analysis of 2012 cost report data in the CY 2015 HH PPS proposed rule. Those comments and our responses are summarized below. Comment: Commenters urged CMS to postpone or stop the implementation of the rebasing reductions. Commenters expressed concerns with the rebasing methodology, impact analysis, and process outlined in the CY 2014 HH PPS proposed and final rules and stated that a more comprehensive study is needed to evaluate the rebasing reductions. Some commenters also stated that the findings on the study on access to care mandated by section 3131(d) of the Affordable Care Act were not fully considered prior to the implementation or rebasing and urged CMS to take into account these findings and reconsider the rebasing adjustments. Response: We thank the commenters for their comments. We did not propose changes to the rebasing adjustments for CY 2014 through CY 2017 finalized in the CY 2014 HH PPS final rule. The comments received regarding the rebasing adjustments were nearly identical to the comments submitted during the comment period for the CY 2014 HH PPS proposed rule. Therefore, we encourage commenters to review our responses to the comments we received on the rebasing adjustments in the CY 2014 HH PPS final rule (78 FR 72282– 72294). Comment: Several commenters were concerned with the impact of the rebasing adjustments and urged CMS to monitor the impact of the reductions and provided suggestions for the impact and monitoring analyses. Response: As we noted in the CY 2015 HH PPS proposed rule, sufficient PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 claims data for CY 2014 is not available for analysis. We plan to provide an update on our monitoring efforts once sufficient CY 2014 claims data become available. In their public comments on the CY 2015 HH PPS proposed rule, MedPAC stated that given the 12 percent or higher margins for for-profit and non-profit agencies in 2012, they do not expect the reductions to materially affect the operations of most agencies and recommended to Congress that rebasing be implemented in a shorter period, that the annual payment update be eliminated, and that such changes to statute would help bring payments closer to costs than the current approach to rebasing. MedPAC is required to conduct a study and submit a report on the impact of the rebasing adjustments on access to care, quality outcomes, the number of home health agencies, and rural agencies, urban agencies, for-profit agencies and non-profit agencies to be submitted no later than January 1, 2015. Comment: A commenter stated that CMS did not indicate in the CY 2015 HH PPS proposed rule how many 2012 cost reports were audited and how many were trimmed out (excluded) from the analysis. The commenter requested that CMS include this information in the final rule for the sake of transparency. Response: None of the 2012 cost reports were audited. Of the 10,485 cost reports in the sample, which contained 10,310 unique provider numbers, 6,135 cost reports were used in the results presented in the CY 2015 HH PPS proposed rule (79 FR 38370–38371). We used same trimming and weighting methodology described in the CY 2014 HH PPS proposed rule (78 FR 40284– 40286). Comment: Commenters expressed concern with the reduction to the NRS conversion factor. The commenter was concerned that reductions to payments for NRS may impact patients with wounds and requested that CMS re- E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66038 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations evaluate the utilization of and charges associated with surgical dressings compared to other supplies in the NRS group and suggested CMS consider a separate conversion factor for surgical dressings. Another commenter stated that it is difficult to determine whether actual hospital-based HHA NRS costs had been included into the total cost of services measured. The commenter stated that there is a flaw in the hospital-based cost report where the NRS cost data does not flow to the total cost. The commenter recommended that CMS review the hospital based cost reports for this problem and fix the NRS adjustment equitably if that flaw exists. Response: We researched whether hospital-based HHA costs for NRS were included in our rebasing calculations in the CY 2014 HH PPS proposed and final rules. We noted in the CY 2014 HH PPS final rule that NRS costs for hospitalbased HHAs are to be reported on CMS form 2552–10, worksheet H, line 12 (78 FR 72291). This data flows to worksheet H3, part 1, line 15. However, line 15, columns 6 through 11 are shaded out and not currently populated. We are in the process of ‘‘un-shading’’ those columns for future data collection. Of the over 11,000 HHAs included in the Regulatory Impact Analysis in section V., less than 10 percent are facilitybased HHAs. We believe that using NRS cost data solely from freestanding HHAs, given the unavailability of the hospital-based HHA NRS cost data for FY 2011, is appropriate. We examined cost report data for both freestanding and hospital-based HHAs (using instances where the hospital-based HHA submitted cost report data using the older version of the Medicare hospital cost report (CMS form 2552–96) that allows columns 6 through 11 on line 15 on worksheet H6 part 1to be populated). We found that the average NRS cost per visit varies substantially from year-toyear, with the five-year average NRS cost per visit at $2.27. Once the hospital-based cost report data becomes available, we will analyze those costs and take them into consideration as we work to address any findings from the home health study required by section 3131(d) of the Affordable Care Act, monitor the potential impact of the rebasing adjustments and other recent payment changes, and develop payment options to ensure ongoing access to care for vulnerable populations. The work may include potential revisions to the NRS and case-mix weights methodology to better reflect costs of treating Medicare beneficiaries. Comment: Commenters urged CMS to use the authority granted under section VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 1871 of the Social Security Act to modify the rebasing adjustments finalized in the CY 2014 HH PPS final rule. The commenter stated that CMS has authority to modify final regulations if CMS finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. Commenters urged CMS to modify payment rates in order to secure seniors’ access to home health care, ensure high quality of care, and preserve jobs. Another commenter stated that section 1895 of the Social Security Act allows CMS to implement a less aggressive approach to rebasing. Response: Section 1871(b)(2)(C) of the Act cross-references section 553(b)(3)(B) of the Administrative Procedure Act. Both the Social Security Act and the Administrative Procedure Act permit us to waive the requirements of notice and a period for comment if, among other things, the Secretary determines that notice and comment are impracticable, unnecessary, or contrary to the public interest. Normally, we only waive notice and comment when we believe there are unusual circumstances that would warrant expedited implementation of a rule, or when the rule changes are technical and/or involve no exercise of discretion on the part of the Secretary. In the context of this notice-andcomment rulemaking, it appears that the commenter is requesting that we adjust our rebasing rates without having previously announced our intention to do so. We do not believe that circumstances have changed in a way that would require an immediate change to our rebasing rate; and even if circumstances changed, we do not believe that changing the rate without a period for notice and comment would be in the public interest. We also note that calculation of the rates pursuant to the rebasing provision at section 1895(b)(3)(A)(iii) of the Act took place after a period of notice and comment in the CY 2014 HH PPS rule (see 78 FR 72278 through 72281). Section 1895 of the Act states that we must phase in any adjustment over a four-year period in equal increments, not to exceed 3.5 percent of the amount (or amounts) as of the date of enactment of the Affordable Care Act, and fully implement the rebasing adjustments by CY 2017. We do not have the authority to implement rebasing in another manner. Therefore, we will move forward with the rebasing reductions finalized in the CY 2014 HH PPS final rule. PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 2. Affordable Care Act Face-to-Face Encounter Requirement Effective January 1, 2011, section 6407 the Affordable Care Act requires that, as a condition for payment, prior to certifying a patient’s eligibility for the Medicare home health benefit, the physician must document that the physician himself or herself, or an allowed non-physician practitioner (NPP), as described below, had a faceto-face encounter with the patient. The regulations at § 424.22(a)(1)(v) currently require that that the face-to-face encounter be related to the primary reason the patient requires home health services and occur no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care. In addition, as part of the certification of eligibility, the certifying physician must document the date of the encounter and include an explanation (narrative) of why the clinical findings of such encounter support that the patient is homebound, as defined in subsections 1814(a) and 1835(a) of the Act, and in need of either intermittent skilled nursing services or therapy services, as defined in § 409.42(c). The face-to-face encounter requirement was enacted, in part, to discourage physicians certifying patient eligibility for the Medicare home health benefit from relying solely on information provided by the HHAs when making eligibility determinations and other decisions about patient care. In the CY 2011 HH PPS final rule, in which we implemented the face-to-face encounter provision of the Affordable Care Act, some commenters expressed concern that this requirement would diminish access to home health services (75 FR 70427). We examined home health claims data from before implementation of the face-to-face encounter requirement (CY 2010), the year of implementation (CY 2011), and the years following implementation (CY 2012 and CY 2013), to determine whether there were indications of access issues as a result of this requirement. Nationally, utilization (as measured by the number of episodes) held relatively constant over the first year of implementation (comparing CY 2010 and CY 2011) (see Table 5 below). Between CY 2010 and CY 2013, there was a 1.8 percent decrease in number of episodes, however, there was a 1.5 percent increase in the number of home health users (beneficiaries with at least one home health episode). Also, the number of HHAs providing at least one home health episode increased steadily from CY 2010 through CY 2013 with an E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations aggregate increase of 8.9 percent (see Table 5 below). Home health users as a percentage of Part A and/or Part B fee-for-service (FFS) beneficiaries decreased slightly from 9.3 percent in CY 2010 to 9.0 percent in CY 2013. The number of episodes per Part A and/or Part B FFS beneficiaries decreased slightly between CY 2010 and CY 2013, with 0.19 (or 19 episodes per 100 Medicare Part A and/ or Part B FFS beneficiaries) in CY 2010 and 0.17 (or 17 episodes per 100 Medicare Part A and/or Part B FFS beneficiaries) in CY 2013. We note these observed decreases between CY 2010 to CY 2013, for the most part, are likely the result of an increase in FFS enrollment between CY 2010 and CY 2013 of 4.6 66039 percent. Newly eligible Medicare beneficiaries are typically not of the age where home health services are needed and therefore, without any changes in utilization, we will expect home health users and the number of episodes per Part A and/or B FFS beneficiaries to decrease with an increase in the number of newly enrolled FFS beneficiaries. TABLE 5—HOME HEALTH STATISTICS, CY 2010 THROUGH CY 2013 2010 Number of episodes ........................................................................................ Beneficiaries receiving at least 1 episode (Home Health Users) .................... Part A and/or B FFS beneficiaries .................................................................. Episodes per Part A and/or B FFS beneficiaries ............................................ Home health users as a percentage of Part A and/or B FFS beneficiaries ... HHAs providing at least 1 episode .................................................................. 2011 6,833,669 3,431,696 36,818,078 0.19 9.3% 10,916 2012 6,821,459 3,449,231 37,686,526 0.18 9.2% 11,446 2013 6,727,875 3,446,122 38,224,640 0.18 9.0% 11,746 6,708,923 3,484,579 38,505,609 0.17 9.0% 11,889 Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)—Accessed on May 14, 2014 and August 19, 2014. Medicare enrollment information obtained from the CCW Master Beneficiary Summary File. Beneficiaries are the total number of beneficiaries in a given year with at least 1 month of Part A and/or Part B Fee-for-Service coverage without having any months of Medicare Advantage coverage. Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 States and District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ‘‘0’’ (‘‘Non-payment/zero claims’’) and ‘‘2’’ (‘‘Interim—first claim’’) are excluded. If a beneficiary is treated by providers from multiple states within a year the beneficiary is counted within each state’s unique number of beneficiaries served. Although home health utilization at the national level decreased slightly from CY 2010 and CY 2013, the decrease in utilization did not occur in all states. For example, California, New Jersey and Virginia experienced an increase in the number of episodes from CY 2010 to CY 2013. Also, the number of episodes per Part A and/or Part B FFS beneficiaries for these states increased or remained roughly the same between CY 2010 through CY 2013 (see Table 6). TABLE 6—HOME HEALTH STATISTICS FOR SELECT STATES WITH INCREASING NUMBERS OF HOME HEALTH EPISODES BETWEEN CY 2010 AND CY 2011 Year Number of Episodes ................................ CA MA NJ VA 2010 2011 2012 2013 Home Health Users as a Percentage of Part A and/or B FFS beneficiaries ....... Providers Providing at Least 1 Episode .. 183,271 186,849 183,625 186,871 142,328 143,127 142,129 143,674 142,660 149,154 154,677 160,105 68,949 70,539 71,186 71,703 689,302 717,413 732,952 739,868 259,013 270,259 281,023 294,150 3,199,845 3,294,574 3,397,936 3,444,078 103,954 107,520 106,910 110,573 890,472 934,312 959,015 976,814 95,804 97,190 96,534 97,385 1,205,049 1,228,239 1,232,950 1,245,275 83,933 86,796 89,879 94,393 1,014,248 1,055,516 1,086,474 1,119,886 0.22 0.21 0.21 0.20 0.13 0.14 0.14 0.15 0.21 0.20 0.19 0.19 0.12 0.12 0.12 0.12 0.14 0.14 0.14 0.14 2010 2011 2012 2013 2010 2011 2012 2013 Episodes per Part A and/or Part B FFS beneficiaries ......................................... 428,491 451,749 477,732 508,838 2010 2011 2012 2013 Part A and/or Part B FFS Beneficiaries .. 149,242 151,131 151,812 148,972 2010 2011 2012 2013 2010 2011 2012 2013 Beneficiaries Receiving at Least 1 Episode (Home Health Users) .................. tkelley on DSK3SPTVN1PROD with RULES2 AL 10.00% 9.83% 9.71% 9.69% 148 150 148 150 8.09% 8.20% 8.27% 8.54% 925 1,013 1,073 1,157 11.67% 11.51% 11.15% 11.32% 138 150 160 165 7.95% 7.91% 7.83% 7.82% 49 48 47 46 8.28% 8.22% 8.27% 8.43% 196 209 219 224 Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)—Accessed on May 14, 2014 and August 19, 2014. Medicare enrollment information obtained from the CCW Master Beneficiary Summary File. Beneficiaries are the total number of beneficiaries in a given year with at least 1 month of Part A and/or Part B Fee-for-Service coverage without having any months of Medicare Advantage coverage. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 66040 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 States and District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ‘‘0’’ (‘‘Non-payment/zero claims’’) and ‘‘2’’ (‘‘Interim—first claim’’) are excluded. If a beneficiary is treated by providers from multiple states within a year the beneficiary is counted within each state’s unique number of beneficiaries served. The states with the highest utilization of Medicare home health (as measured by the number of episodes per Part A and/or Part B FFS beneficiaries) are Texas, Florida, Oklahoma, Mississippi, and Louisiana (Table 7 and Figure 1 below). In aggregate, for CY 2010 through CY 2013 the number of episodes for these states decreased by 8.0 percent; however, even with this decrease from CY 2010 through CY 2013, the five states listed in Table 7 continue to be among the states with the highest utilization of Medicare home health nationally (see Figure 1). If we were to exclude the five states listed in Table 7 from the national figures in Table 5, home health users (beneficiaries with at least one home health episode) as a percentage of Part A and/or Part B fee-for-service (FFS) beneficiaries would decrease from to 9.0 percent to 8.1 percent for CY 2013 and the number of episodes per Part A and/ or Part B FFS beneficiaries would decrease from 0.17 (or 17 episodes per 100 Medicare Part A and/or Part B FFS beneficiaries) to 0.14 (or 14 episodes per 100 Medicare Part A and/or Part B FFS beneficiaries) for CY 2013. Texas, accounting for roughly 17 percent of HHA episodes in 2010, experienced a 12 percent decrease in the number of episodes and a 9 percent decrease in the number of home health users between CY 2010 and CY 2013 (see Table 7 below). We also note that Texas is one of the states that has areas with suspect billing practices. A temporary moratoria on enrollment of new HHAs, effective July 30, 2013, were put in place for Miami, FL and Chicago, IL. In January of 2014, CMS announced new temporary moratoria on enrollment of new HHAs in four additional areas —Fort Lauderdale, FL; Detroit, MI; Dallas, TX; and Houston, TX. If we were to exclude Texas from the national average (see Table 5 above), there would be a 0.13 percent increase in number of episodes between CY 2010 and CY 2013 rather than a 1.8 percent decrease as observed at the national level. The number of home health users would increase 2.8 percent compared to the national average with an increase of 1.5 percent. TABLE 7—HOME HEALTH STATISTICS FOR THE STATES WITH THE HIGHEST NUMBER OF HOME HEALTH EPISODES PER PART A AND/OR PART B FFS BENEFICIARIES, CY 2010 THROUGH CY 2013 Year Number of Episodes ................................ FL OK MS LA 2010 2011 2012 2013 Home Health Users as a Percentage of Part A and/or Part B FFS Beneficiaries Providers Providing at Least 1 Episode .. 208,555 203,112 196,887 196,713 153,169 153,983 148,516 143,428 256,014 249,479 230,115 215,590 366,844 363,474 350,803 333,396 2,500,237 2,597,406 2,604,458 2,535,611 355,181 355,900 354,838 357,099 2,422,141 2,454,124 2,451,790 2,454,216 68,440 67,218 65,948 66,502 533,792 549,687 558,500 568,815 55,132 55,818 55,438 55,453 465,129 476,497 480,218 483,439 77,976 77,677 74,755 73,888 544,555 561,531 568,483 574,654 0.45 0.43 0.40 0.39 0.28 0.29 0.28 0.28 0.39 0.37 0.35 0.35 0.33 0.32 0.31 0.30 0.47 0.44 0.40 0.38 2010 2011 2012 2013 2010 2011 2012 2013 Episodes per Part A and/or Part B FFS beneficiaries ......................................... 689,183 701,426 691,255 689,269 2010 2011 2012 2013 Part A and/or Part B FFS Beneficiaries .. 1,127,852 1,107,605 1,054,244 995,555 2010 2011 2012 2013 2010 2011 2012 2013 Beneficiaries Receiving at Least 1 Episode (Home Health Users) .................. tkelley on DSK3SPTVN1PROD with RULES2 TX 14.67% 13.99% 13.47% 13.15% 2,352 2,472 2,549 2,600 14.66% 14.50% 14.47% 14.55% 1,348 1,426 1,430 1,357 12.82% 12.23% 11.81% 11.69% 240 252 254 262 11.85% 11.71% 11.54% 11.47% 53 51 48 48 14.32% 13.83% 13.15% 12.86% 213 216 213 210 Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)—Accessed on May 14, 2014 and August 19, 2014. Medicare enrollment information obtained from the CCW Master Beneficiary Summary File. Beneficiaries are the total number of beneficiaries in a given year with at least 1 month of Part A and/or Part B Fee-for-Service coverage without having any months of Medicare Advantage coverage. Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 States and District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ‘‘0’’ (‘‘Non-payment/zero claims’’) and ‘‘2’’ (‘‘Interim—first claim’’) are excluded. If a beneficiary is treated by providers from multiple states within a year the beneficiary is counted within each state’s unique number of beneficiaries served. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 For CY 2011, in addition to the implementation of the Affordable Care Act face-to-face encounter requirement, HHAs were also subject to new therapy reassessment requirements, payments were reduced to account for increases in nominal case-mix, and the Affordable Care Act mandated that the HH PPS payment rates be reduced by 5 percent to pay up to, but no more than 2.5 percent of total HH PPS payments as outlier payments. The estimated net impact to HHAs for CY 2011 was a decrease in total HH PPS payments of 4.78 percent. Therefore, any changes in utilization between CY 2010 and CY 2011 cannot be solely attributable to the implementation of the face-to-face encounter requirement. For CY 2012 we recalibrated the case-mix weights, including the removal of two hypertension codes from scoring points in the HH PPS Grouper and lowering the case-mix weights for high therapy cases estimated net impact to HHAs, and reduced HH PPS rates in CY 2012 by 3.79 percent to account for additional growth in aggregate case-mix that was unrelated to changes in patients’ health VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 status. The estimated net impact to HHAs for CY 2012 was a decrease in total HH PPS payments of 2.31 percent. Again, any changes in utilization between CY 2011 and CY 2012 cannot be solely attributable to the implementation of the face-to-face encounter requirement. Given that a decrease in the number of episodes from CY 2010 to CY 2013 occurred in states that have the highest home health utilization (number of episodes per Part A and/or Part B FFS beneficiaries) and not all states experienced declines in episode volume during that time period, we believe that the implementation of the face-to-face encounter requirement could be considered a contributing factor. We will continue to monitor for potential impacts due to the implementation of the face-to-face encounter requirements and other policy changes in the future. Independent effects of any one policy may be difficult to discern in years where multiple policy changes occur in any given year. PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 66041 B. Changes to the Face-to-Face Encounter Requirements 1. Background on Statutory and Regulatory Requirements As a condition for payment, section 6407 of the Affordable Care Act requires that, prior to certifying a patient’s eligibility for the Medicare home health benefit, the physician must document that the physician himself or herself or an allowed non-physician practitioner (NPP) had a face-to-face encounter with the patient. Specifically, sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, as amended by the Affordable Care Act, state that, in addition to the certifying physician, a nurse practitioner or clinical nurse specialist, as those terms are defined in section 1861(aa)(5) of the Act, working in collaboration with the physician in accordance with state law, or a certified nurse-midwife (as defined in section 1861(gg) of the Act) as authorized by state law, or a physician assistant (as defined in section 1861(aa)(5) of the Act) under the supervision of the E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.000</GPH> tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 66042 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations physician may perform the face-to-face encounter. The goal of the Affordable Care Act provision is to achieve greater physician accountability in certifying a patient’s eligibility and in establishing a patient’s plan of care. We believe this goal is better achieved if the face-to-face encounter occurs close to the start of home health care, increasing the likelihood that the clinical conditions exhibited by the patient during the encounter are related to the primary reason the patient needs home health care. The certifying physician is responsible for determining whether the patient meets the eligibility criteria (that is, homebound status and need for skilled services) and for understanding the current clinical needs of the patient such that the physician can establish an effective plan of care. As such, CMS regulations at § 424.22(a)(1)(v) require that the face-to-face encounter be related to the primary reason the patient requires home health services and occur no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care. In addition, current regulations require that, as part of the certification of eligibility, the certifying physician must document the date of the encounter and include an explanation (narrative) of why the clinical findings of such encounter support that the patient is homebound, as defined in sections 1835(a) and 1814(a) of the Act, and in need of either intermittent skilled nursing services, physical therapy, or speech-language pathology services, as defined in § 409.42(c). The ‘‘Requirements for Home Health Services’’ describes certifying a patient’s eligibility for the Medicare home health benefit, and as stated in the ‘‘Content of the Certification’’ under § 424.22 (a)(1), a physician must certify that: • The individual needs or needed intermittent skilled nursing care, physical therapy, and/or speechlanguage pathology services as defined in § 409.42(c). • Home health services are or were required because the individual was confined to the home (as defined in sections 1835(a) and 1814(a) of the Act), except when receiving outpatient services. • A plan for furnishing the services has been established and is or will be periodically reviewed by a physician who is a doctor of medicine, osteopathy, or podiatric medicine (a doctor of podiatric medicine may perform only plan of treatment functions that are consistent with the functions he or she VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 is authorized to perform under state law).2 • Home health services will be or were furnished while the individual is or was under the care of a physician who is a doctor of medicine, osteopathy, or podiatric medicine. • A face-to-face patient encounter occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care and was related to the primary reason the patient requires home health services. This also includes documenting the date of the encounter and including an explanation of why the clinical findings of such encounter support that the patient is homebound (as defined in sections 1835(a) and 1814(a) of the Act) and in need of either intermittent skilled nursing services or therapy services as defined in § 409.42(c). The documentation must be clearly titled and dated and the documentation must be signed by the certifying physician. CMS regulations at § 424.22(a)(1)(i) also require that, for instances where the physician orders skilled nursing visits for management and evaluation of the patient’s care plan,3 the physician must include a brief narrative that describes the clinical justification of this need and the narrative must be located immediately before the physician’s signature. If the narrative exists as an addendum to the certification form, in addition to the physician’s signature on the certification form, the physician must sign immediately after the narrative in the addendum. When there is a continuous need for home health care after an initial 60-day episode of care, a physician is also required to recertify the patient’s eligibility for the home health benefit. In accordance with § 424.22(b), a 2 The physician cannot have a financial relationship as defined in § 411.354 of the chapter, with that HHA, unless the physician’s relationship meets one of the exceptions in section 1877 of the Act, which sets forth general exceptions to the referral prohibition related to both ownership/ investment and compensation; exceptions to the referral prohibition related to ownership or investment interests; and exceptions to the referral prohibition related to compensation arrangements. 3 Skilled nursing visits for management and evaluation of the patient’s care plan are reasonable and necessary where underlying conditions or complications require that only a registered nurse can ensure that essential unskilled care is achieving its purpose. For skilled nursing care to be reasonable and necessary for management and evaluation of the patient’s plan of care, the complexity of the necessary unskilled services that are a necessary part of the medical treatment must require the involvement of skilled nursing personnel to promote the patient’s recovery and medical safety in view of the patient’s overall condition (reference § 409.33 and section 40.1.2.2 in Chapter 7 of the Medicare Benefits Policy Manual (Pub. 100–02)). PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 recertification is required at least every 60 days, preferably at the time the plan is reviewed, and must be signed and dated by the physician who reviews the plan of care. In recertifying the patient’s eligibility for the home health benefit, the recertification must indicate the continuing need for skilled services and estimate how much longer the skilled services will be required. The need for occupational therapy may be the basis for continuing services that were initiated because the individual needed skilled nursing care, physical therapy, or speech–language pathology services. Again, for instances where the physician ordering skilled nursing visits for management and evaluation of the patient’s care plan, the physician must include a brief narrative that describes the clinical justification of this need and the narrative must be located immediately before the physician’s signature. If the narrative exists as an addendum to the recertification form, in addition to the physician’s signature on the recertification form, the physician must sign immediately after the narrative in the addendum. In the CY 2012 HH PPS final rule (76 FR 68597), we stated that, in addition to the certifying physician and allowed NPPs (as defined by the Act and discussed above), the physician who cared for the patient in an acute or postacute care facility from which the patient was directly admitted to home health care, and who had privileges in such facility, could also perform the face-to-face encounter. In the CY 2013 HH PPS final rule (77 FR 67068) we revised our regulations so that an allowed NPP, collaborating with or under the supervision of the physician who cared for the patient in the acute/ post-acute care facility, could communicate the clinical findings that supported the patient’s needs for skilled care and homebound status to the acute/ post-acute care physician. In turn, the acute/post-acute care physician would communicate the clinical findings that supported the patient’s needs for skilled care and homebound status from the encounter performed by the NPP to the certifying physician to document. Policy always permitted such NPPs in the acute/post-acute care setting from which the patient is directly admitted to home health care to perform the face-to-face encounter and communicate directly with the certifying physician the clinical findings from the encounter and how such findings support that the patient was homebound and needed skilled services (77 FR 67106). E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 2. Changes to the Face-to-Face Encounter Narrative Requirement and Non-Coverage of Associated Physician Certification/Re-Certification Claims Each year, the CMS’ Office of Financial Management (OFM), under the Comprehensive Error Rate Testing (CERT) program, calculates the Medicare Fee-for-Service (FFS) improper payment rate. For the FY 2013 report period (reflecting claims processed between July 2011 and June 2012), the national Medicare FFS improper payment rate was calculated to be 10.1 percent.4 For that same report period, the improper payment rate for home health services was 17.3 percent, representing a projected improper payment amount of approximately $3 billion.5 The improper payments identified by the CERT program represent instances in which a health care provider fails to comply with the Medicare coverage and billing requirements and are not necessarily a result of fraudulent activity.6 The majority of home health improper payments were due to ‘‘insufficient documentation’’ errors. ‘‘Insufficient documentation’’ errors occur when the medical documentation submitted is inadequate to support payment for the services billed or when a specific documentation element that is required (as described above) is missing. Most ‘‘insufficient documentation’’ errors for home health occurred when the narrative portion of the face-to-face encounter documentation did not sufficiently describe how the clinical findings from the encounter supported the beneficiary’s homebound status and need for skilled services, as required by § 424.22(a)(1)(v). The home health industry continues to voice concerns regarding the implementation of the Affordable Care Act face-to-face encounter documentation requirement. The home health industry cites challenges that HHAs face in meeting the face-to-face encounter documentation requirements regarding the required narrative, 4 U.S. Department of Health and Human Services, ‘‘FY 2013 Agency Financial Report’’, accessed on April, 23, 2014 at: https://www.hhs.gov/afr/2013hhs-agency-financial-report.pdf. 5 U.S. Department of Health and Human Services, ‘‘The Supplementary Appendices for the Medicare Fee-for-Service 2013 Improper Payment Rate Report’’, accessed on April, 23, 2014 at: https:// www.cms.gov/Research-Statistics-Data-andSystems/Monitoring-Programs/Medicare-FFSCompliance-Programs/CERT/Downloads/ November2013ReportPeriodAppendixFinal12-132013_508Compliance_Approved12-27-13.pdf. 6 The CERT improper payment rate is not a ‘‘fraud rate,’’ but is a measurement of payments made that did not meet Medicare requirements. The CERT program cannot label a claim fraudulent. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 including a perceived lack of established standards for compliance that can be adequately understood and applied by the physicians and HHAs. In addition, the home health industry conveys frustration with having to rely on the physician to satisfy the face-toface encounter documentation requirements without incentives to encourage physician compliance. Correspondence received to date has expressed concern over the ‘‘extensive and redundant’’ narrative required by regulation for face-to-face encounter documentation purposes when detailed evidence to support the physician certification of homebound status and medical necessity is available in clinical records. In addition, correspondence stated that the narrative requirement was not explicit in the Affordable Care Act provision requiring a face-to-face encounter as part of the certification of eligibility and that a narrative requirement goes beyond Congressional intent. While we do not agree that the narrative requirement goes beyond Congressional intent, we agree that there should be sufficient evidence in the patient’s medical record to demonstrate that the patient meets the Medicare home health eligibility criteria. Therefore, in an effort to simplify the face-to-face encounter regulations, reduce burden for HHAs and physicians, and to mitigate instances where physicians and HHAs unintentionally fail to comply with certification requirements, we proposed that: (1) The narrative requirement in regulation at § 424.22(a)(1)(v) would be eliminated. The certifying physician would still be required to certify that a face-to-face patient encounter, which is related to the primary reason the patient requires home health services, occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care and was performed by a physician or allowed non-physician practitioner as defined in § 424.22(a)(1)(v)(A), and to document the date of the encounter as part of the certification of eligibility. For instances where the physician is ordering skilled nursing visits for management and evaluation of the patient’s care plan, the physician would still be required to include a brief narrative that describes the clinical justification of this need as part of the certification/re-certification of eligibility as outlined in § 424.22(a)(1)(i) and § 424.22(b)(2). This requirement was implemented in the CY 2010 HH PPS final rule (74 FR 58111) and is not changing. We note that this requirement PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 66043 predates the Affordable Care Act, and is a long-established policy of CMS. (2) In determining whether the patient is or was eligible to receive services under the Medicare home health benefit at the start of care, we proposed to review only the medical record for the patient from the certifying physician or the acute/post-acute care facility (if the patient in that setting was directly admitted to home health) used to support the physician’s certification of patient eligibility, as described in paragraphs (a)(1) and (b) of the section. If the patient’s medical record, used by the physician in certifying eligibility, was not sufficient to demonstrate that the patient was eligible to receive services under the Medicare home health benefit, payment would not be rendered for home health services provided. (3) Physician claims for certification/ recertification of eligibility for home health services (G0180 and G0179, respectively) would not be covered if the HHA claim itself was non-covered because the certification/recertification of eligibility was not complete or because there was insufficient documentation to support that the patient was eligible for the Medicare home health benefit. However, rather than specify this in our regulations, this proposal would be implemented through future sub-regulatory guidance. We believed that these proposals were responsive to home health industry concerns regarding the face-to-face encounter requirements articulated above. We invited comment on these proposals and the associated change in the regulations text at § 424.22 the CY 2015 HH PPS proposed rule (79 FR 38376). The following is a summary of the comments we received regarding (1) the proposed elimination of the face-to-face encounter narrative requirement as part of the certification of eligibility; and (2) the proposal to review only the medical record for the patient from the certifying physician or the acute/post-acute care facility (if the patient in that setting was directly admitted to home health), used to support the physician’s certification of patient eligibility, in determining whether the patient is or was eligible to receive services under the Medicare home health benefit at the start of care. Comment: A few commenters urged CMS to remove the face-to-face requirement entirely. Commenters went on to note that since the intent of the face-to-face encounter is to combat fraud, CMS should be able to determine which HHAs are providing care by fraudulent means and should investigate those HHAs. E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66044 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Response: As we note above, as a condition for payment, section 6407 of the Affordable Care Act requires that, prior to certifying a patient’s eligibility for the Medicare home health benefit, the physician must document that the physician himself or herself or an allowed NPP had a face-to-face encounter with the patient. As such, we do not have the legal authority to eliminate the face-to-face encounter requirement. We also note above that the goal of this provision was to achieve greater physician accountability in certifying a patient’s eligibility, increasing communication between the physician and home health agency to improve patient care, and in establishing a patient’s plan of care. CMS’s Center for Program Integrity (CPI) is currently engaged in a variety of activities aimed at reducing fraud and abuse. Such activities include provider/ contractor audits, policy reviews, and the identification and monitoring of program vulnerabilities. CPI is actively collaborating with the U.S. Department of Justice, the Department of Health & Human Services’ Office of Inspector General, state law enforcement agencies, other federal entities, and other CMS component(s) for the purposes of detecting, deterring, monitoring and combating fraud and abuse, as well as taking action against those that commit or participate in fraudulent or other unlawful activities. Comment: Several commenters stated that CMS overstepped its statutory authority by requiring the face-to-face encounter narrative as part of the certification of patient eligibility for the home health benefit. Response: We disagree with the commenters. We believe that our policy is consistent with the text, structure, and purpose of the statute. As a condition for payment, section 6407 of the Affordable Care Act requires that, prior to certifying a patient’s eligibility for the Medicare home health benefit, the physician must ‘‘document’’ that the physician himself or herself or an allowed NPP had a face-to-face encounter with the patient. The statutory text does not specify what the statutory term ‘‘document’’ means and we believe it is reasonable to interpret the requirement to ‘‘document’’ the faceto-face encounter as requiring the certifying physician to explain why the Medicare beneficiary is homebound and in need of skilled home health services. This interpretation is supported by the structure and purpose of the statute. Medicare payment for home health services is intended for individuals who are confined to the home and need skilled home health services. The face- VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 to-face requirement and the documentation requirement help ensure that individuals do not receive home health services unnecessarily and that Medicare makes payment appropriately (that is, when the patient is homebound and needs skilled home health services). Nothing in the text of the statute indicates that the current required explanation is outside the scope of the Secretary’s legal authority. In addition, this is similar to the long-standing Medicare policy for skilled nursing visits for management and evaluation of the patient’s care plan (where underlying conditions or complications require that only a registered nurse can ensure that essential unskilled care is achieving its purpose), which was previously accepted by the home health community. Comment: Nearly all commenters were supportive of the proposal to eliminate the face-to-face encounter narrative as part of the certification of eligibility and urged CMS to finalize the proposal. Commenters cited challenges in getting certifying physicians, whom the HHA has no control over, to document the narrative sufficiently. Other commenters noted that policies surrounding the narrative requirement contained confusing nuances and reviews of narrative sufficiency were too subjective. Some commenters noted instances where medical necessity and patient eligibility for the Medicare home health benefit were clearly demonstrated in the medical record; however, the entire claim was denied because the certifying physician’s narrative was deemed insufficient. In contrast, in its comments, MedPAC stated that the narrative should continue to be a requirement as part of the certification of eligibility for Medicare home health services. MedPAC stated that eliminating the narrative increases the risk of unnecessary or unauthorized home health care services. MedPAC suggested that CMS keep the current narrative requirement in effect for at least another year while it considers other potential improvements. Another commenter also disagreed with the proposed elimination of the face-to-face encounter narrative as part of the certification of eligibility stating that the elimination of the narrative may increase confusion about the Medicare home health eligibility requirements. Response: We thank the vast majority of the commenters for their support of this proposal. As explained in the proposed rule, we proposed to eliminate the narrative requirement in an effort to simplify the face-to-face encounter regulations, reduce burden for HHAs and physicians, and to mitigate PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 instances where physicians and HHAs unintentionally fail to comply with certification requirements. We believe that the current narrative requirement can be useful for HHAs and medical review auditors, and is a permissible interpretation of section 6407 of the Affordable Care Act. However, as the proposed rule reflects, we acknowledge the concerns expressed by stakeholders regarding application of the narrative requirement. Balancing the considerations raised by stakeholders and commenters in light of our experience, we are finalizing our proposal to eliminate the narrative requirement. We will continue to evaluate whether further policy changes are warranted in the future. Comment: A few commenters asked that CMS affirm that a narrative for instances where the physician is ordering skilled nursing for management and evaluation of the patient’s care plan (that is, instances where the patient’s underlying conditions or complications require that only a registered nurse can ensure that essential unskilled care is achieving its purpose) should be a rare occurrence and asked how physicians and HHAs should identify cases that would require a narrative. Some commenters requested that CMS affirm in the final rule that while CMS proposed to eliminate the face-to-face encounter narrative, a narrative will still be required for instances where the physician is ordering skilled nursing visits for the management and evaluation of the patient’s care plan. Several commenters recommended that CMS eliminate all narrative requirements for home health for consistency and to promote a better understanding of the certification/recertification requirements by physicians. Response: Instances where a physician is ordering skilled nursing for the management and evaluation of the patient’s care plan (when the patient’s underlying conditions and/or complications require a registered nurse to ensure that non-skilled care is achieving its purpose), should be rare and therefore a narrative that explains the need for such services as part of the certification/re-certification of patient eligibility for the Medicare home health benefit should also be rare. Analysis of CY 2012 home health claims data showed that only 1.5 percent of all home health visits were for management & evaluation of the patient’s care plan (see Table 8 below). E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations As indicated above in Table 8, TABLE 8—PERCENTAGE OF HOME HEALTH VISITS BY HCPCS CODE, instances where the physician is ordering skilled nursing visits for CY 2012 Type of visit Percent of total G0154—Direct skilled services provided by a RN/LPN .......... G0162—Skilled services by a RN for management and evaluation of the plan of care (the patient’s underlying conditions or complications requires an RN to ensure that essential non-skilled care achieves its purpose) ............ G0163—Skilled services of a RN/LPN for the observation and assessment of the patient’s condition (the change in the patient’s condition requires skilled nursing personnel to identify and evaluate the patient’s need for possible modification of treatment) ..................................... G0164—Skilled services of a RN/LPN, in the training and/ or education of a patient or family member ...................... 67.6 1.5 10.5 20.4 tkelley on DSK3SPTVN1PROD with RULES2 Source: CY 2012 Medicare claims data for episodes ending on or before December 31, 2012 (as of June 30, 2013) for which we had a linked OASIS assessment. Note(s): RN = Registered Nurse, LPN = Licensed Practical Nurse. We note that section 40.1.2.2 in Chapter 7 of the Medicare Benefits Policy Manual provides information on how to identify whether the patient is receiving skilled nursing services for management and evaluation of the patient’s care plan. Skilled nursing services in such instances can be ‘‘reasonable and necessary where underlying conditions or complications require that only a registered nurse can ensure that essential unskilled care is achieving its purpose. For skilled nursing care to be reasonable and necessary for management and evaluation of the patient’s plan of care, the complexity of the necessary unskilled services that are a necessary part of the medical treatment must require the involvement of skilled nursing personnel to promote the patient’s recovery and medical safety in view of the patient’s overall condition.’’ 7 Section 40.1.2.2 also provides several examples in which skilled nursing services for management and evaluation of the patient’s care plan could be considered reasonable and necessary. 7 Medicare Benefit Policy Manual, (CMS Pub. 100–02), Ch. 7, sec. 40.1.2.2. Available at: https:// www.cms.gov/Regulations-and-Guidance/ Guidance/Manuals/Downloads/bp102c07.pdf. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 management and evaluation of the patient’s care plan should be infrequent. Because the purpose of these visits require a skilled nurse to ensure that unskilled care is achieving its purpose, we believe that it is still appropriate for the physician to include a brief narrative that describes the clinical justification of this need as part of the certification/re-certification of eligibility as outlined in § 424.22(a)(1)(i) and § 424.22(b)(2). Comment: Several commenters stated that CMS should halt current medical review activities with regard to the faceto-face encounter narrative and reopen any past denials that were made based on an insufficient face-to-face encounter narrative by making the implementation of the elimination of the face-to-face encounter narrative retroactive. Response: The changes finalized in CY 2015 HH PPS final rule will become effective for episodes that begin on or after January 1, 2015. Although we are eliminating the narrative requirement prospectively, the narrative requirement continues to apply to services furnished during episodes that begin before January 1, 2015. Comment: One commenter stated that for claims currently undergoing retrospective review, CMS should find HHAs ‘‘without fault’’ under 42 U.S.C. 1395gg and section 1870 of the Act in receiving payments where the physician has provided the narrative, although perhaps not sufficient, in addition to meeting all other certification requirements. In finding the HHAs ‘‘without fault’’ CMS would simply be acknowledging that the nature of the earlier face-to-face guidance could lead to a provider acting in good faith in submitting a claim that might not meet the documentation standards. One commenter stated that CMS should issue clarifying guidance, to be applied to claims currently being reviewed, that explains what constitutes a compliant or sufficient narrative. Response: Providers are required to submit documentation adequate to justify payment under Medicare. Where we deny a claim due to insufficient documentation of the face-to-face encounter, we are also inherently determining that the provider is not without fault because the provider has not met its burden to submit documentation adequate to justify payment. The Medicare Financial Management Manual addresses the ‘‘without fault’’ clause of section 1395gg of the Act and states that a provider is not without fault if it fails to provide the PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 66045 documentation necessary to determine that the billed-for services are covered.8 We believe that we have provided sufficient education and guidance to providers on the requirements for sufficiently documenting the face-toface encounter as part of the certification of eligibility. CMS has issued several educational articles and a set of Q&As to help aide physicians and HHAs in complying with the face-to-face encounter narrative requirement. The most recent article issued—MLN Matters® SE1405: Documentation Requirements for Home Health Prospective Payment System (HH PPS) Face-to-Face Encounter— explains what constitutes a sufficient face-to-face encounter narrative and includes several examples. Other articles and a set of Q&As on the faceto-face encounter requirement and physician certification of eligibility can be found on the Home Health Agency (HHA) center Web page at: https:// www.cms.gov/Center/Provider-Type/ Home-Health-Agency-HHA-Center.html under ‘‘spotlights’’. Comment: Several commenters stated that CMS should educate its contractors to ensure that there are consistent and standardized audit practices. Other commenters stated that if CMS reviews the certifying physician’s and/or facility’s medical record for the patient, CMS should adequately prepare physicians to implement this new policy by educating physicians on the requirements for home health eligibility, how to sufficiently document patient eligibility, and the Medicare definition of confined to the home. Response: We use several methods to ensure consistency in medical reviews, including contractor oversight and the use of inter-rater reliability to ensure that all reviewers are interpreting the policy the same. We offer a range of educational resources through online manuals and Web site postings for HHAs and physicians who order these services. When appropriate, we also provide direct guidance and education to Medicare providers and suppliers. We encourage HHAs to work with their designated MAC to address any issues that arise in the claims payment process. We agree with commenters who suggested that we educate physicians regarding any policy changes finalized in this final rule and provide general education to physicians on certifying beneficiaries for Medicare home health services. We will do so via, 8 Medicare Financial Management Manual, (CMS Pub. 100–06), Ch. 3, sec. 90.1(E). Available at: https://www.cms.gov/Regulations-and-Guidance/ Guidance/Manuals/downloads/fin106c03.pdf E:\FR\FM\06NOR2.SGM 06NOR2 66046 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 for example, open door forums, email listserv announcements, and MedLearn articles. Comment: A few commenters stated that the certifying physician would not have, nor should be required to have, sufficient documentation within his/her medical record for the patient to support his/her certification that the patient is eligible for the Medicare home health benefit. Several commenters stated that HHAs should not be liable for documentation errors made by physicians, whom they have little direct control over and some commenters stated that it is neither reasonable for the HHA to obtain all the documentation needed from the certifying physician and/or the acute/ post-acute care facility that may have been used to certify patient eligibility and/or lead to the referral for home care. A few commenters stated that CMS’ proposals to base reimbursement of one provider on documentation maintained by another, separate provider is unprecedented. Several commenters stated that if CMS begins reviewing the certifying physician’s records for the patient, physician’s will cease to refer patients to home health out of fear of patient record audits and frustration with administrative burden. Response: In accordance with the statutory language at sections 1814(a)(2) and 1835(a)(2) of the Act, physicians are required to have, and thus be able to provide, material that appropriately supports their certification and recertification of Medicare home health beneficiaries, as provided by regulations. When we proposed to require a face-to-face encounter narrative, comments, which were summarized and addressed in the CY 2011 HH PPS final rule (75 FR 70431), communicated to CMS that ‘‘the HHA has no control over the quality of the physician’s documentation and no method to enforce proper physician documentation’’. We stated in our response that: ‘‘it is important to reiterate that to be eligible for Medicare’s [home health] benefit, the patient must be under the care of a physician, and it is ultimately the responsibility of the HHA that this criterion is met. We have always held the HHA responsible for ensuring that there is a physician-signed plan of care, physiciansigned orders, and a physician-signed certification. Therefore, we will also hold the agencies responsible for the certifying physician’s encounter documentation. By statute, this documentation is a requirement for payment just as a physician-signed certification of eligibility is a requirement for payment’’ (75 FR 70430). We also stated in the CY 2011 HH PPS final rule that: ‘‘we would expect that a VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 physician who performs a medically necessary physician service, which also satisfies the face-to-face encounter requirement, would maintain medical record documentation concerning the encounter, and the clinical findings associated with that encounter would be consistent with the physician’s certification documentation’’ (75 FR 70431). While we stated that the HHA was ‘‘held harmless’’ if the certification of eligibility, including the face-to-face encounter narrative, was sufficient, we noted that the certifying physician was still expected to fulfill his or her responsibility for ensuring appropriate medical record documentation associated with the certification and/or encounter and any associated Medicare billing (75 FR 70431). Since we proposed to eliminate the face-to-face encounter narrative, with respect to which commenters were overwhelmingly supportive, the only other source that would substantiate the certification of eligibility is the certifying physician’s and/or the acute/ post-acute care facility’s medical record for the patient. We do not agree that requiring documentation from the certifying physician’s and/or acute/post-acute care facility’s medical record for the patient to substantiate the certification of eligibility is unprecedented. For any Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) item to be covered by Medicare: ‘‘the patient’s medical record must contain sufficient documentation of the patient’s medical condition to substantiate the necessity for the type and quantity of items ordered and for the frequency of use or replacement (if applicable). . . . However, neither a physician’s order nor a certificate of medical necessity (CMN) nor a DME information form (DIF) nor a supplier prepared statement nor a physician attestation by itself provides sufficient documentation of medical necessity, even though it is signed by the treating physician or supplier. There must be information in the patient’s medical record that supports the medical necessity for the item and substantiates the answers on the CMN (if applicable) or DIF (if applicable) or information on a supplier prepared statement or physician attestation (if applicable).’’ 9 The analysis in section III.A in this final rule shows that since the implementation of the face-to-face encounter requirement there has been little change in home health utilization. As such, we would not expect the elimination of the narrative and the 9 Medicare Program Integrity Manual (CMS Pub. 100–08) Ch.5, sec. 5.7. Available at: https:// www.cms.gov/Regulations-and-Guidance/ Guidance/Manuals/Downloads/pim83c05.pdf. PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 review of documentation from the certifying physician’s and/or post-acute/ acute care facility’s medical record for the patient to have a substantial impact on utilization for those beneficiaries who are truly eligible to receive services under the Medicare home health benefit. We will continue to monitor for potential impacts due to the face-to-face encounter requirements and other policy changes in the future. Comment: Commenters were generally opposed to using only the certifying physician’s and/or acute/postacute care facility’s medical record for the patient to determine initial patient eligibility for the home health benefit. Commenters generally went on to state that all medical necessity and eligibility determinations should be based on whether the full patient record, regardless of who holds it, establishes that the patient is homebound and in need of skilled care. Other commenters suggested that CMS adopt a policy that allows the certifying physician documentation that supports the certification of eligibility for home health services to be maintained in the medical record of the HHA or allow information from the HHA to be incorporated into the certifying physician’s medical record for the patient. One commenter noted that when MAC and RAC reviews are conducted, it can be years after the service was actually provided and it could be difficult to obtain information from the facility/certifying physician years later as the medical record for the patient may have been moved off-site for storage. Response: In accordance with the statutory language at sections 1814(a)(2) and 1835(a)(2) of the Act, a physician is required to certify and re-certify the patient’s eligibility for the home health benefit. This is also a condition for Medicare payment per the regulations at § 424.22. Without a valid certification/ re-certification of eligibility, there can be no payment made to the HHA. Section 1833(e) of the Act further states that: ‘‘No payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period.’’ Similarly, section 1815(a) of the Act states that: ‘‘. . . no such payments shall be made to any provider unless it has furnished such information as the Secretary may request in order to determine the amounts due such provider under this part for the period E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations with respect to which the amounts are being paid or any prior period.’’ Since the certification/re-certification of eligibility is a requirement for payment and a physician, independent from the HHA as outlined in § 424.22(d), must complete the certification/ re-certification of eligibility, only the certifying physician’s and/or the acute/ post-acute care facility’s medical record for the patient that was used as the basis for the certification of eligibility can demonstrate whether the certification/ re-certification of eligibility is valid. We agree with the suggestions made by the commenters that the certifying physician and/or acute/post-acute care facility should provide the documentation that substantiates the patient’s eligibility to the HHA upon request. The HHA must provide the documentation from the certifying physician and/or acute/post-acute care facility that substantiates the patient’s eligibility for the Medicare home health benefit to CMS and/or its contractors upon request. We also agree with commenters that it would be permissible for the HHA to communicate with and provide information to the certifying physician about the patient’s homebound status and need for skilled care and for the certifying physician to incorporate this information into his or her medical record for the patient. However, the certifying physician must review and sign off on anything incorporated into his or her medical record for the patient that is used to support his/her certification/re-certification of patient eligibility for the home health benefit. In addition, any information from the HHA (including the comprehensive assessment) that is incorporated into the certifying physician’s and/or the acute/ post-acute care facility’s medical record for the patient (if the patient was directly admitted to home health) and used to support the certification of patient eligibility for the home health benefit, must corroborate the certifying physician’s and/or the acute/post-acute care facility’s own documentation/ medical record entries, including the diagnoses and the patient’s condition reported on the comprehensive assessment. Comment: Commenters questioned how the process of reviewing the certifying physician and/or acute/postacute care facility medical record for the patient would be operationalized. Specifically, commenters asked if medical review auditors would contact the certifying physician and/or acute/ post-acute care facility directly to obtain records for review and if HHAs would be penalized if certifying physician and/ VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 or acute/post-acute care facility patient records are not readily available for review. Some commenters questioned whether medical record reviews would happen upon request, such as a MAC or RAC additional documentation request, or if the HHA would be responsible for obtaining the supporting documentation from the certifying physician and/or acute/post-acute care facility and, if so, whether the documentation should be obtained upon referral. A few commenters stated that if HHAs are responsible for securing supporting documentation, it could lead to delays in accepting patients, which in turn could lead to issues in complying with other regulations, such as the timeframe required for completing the initial assessment. Response: After reviewing all of the public comments received, we believe that the best process is for the certifying physician and/or the acute/post-acute care facility (if the patient in that setting was directly admitted to home health) to provide the documentation used as the basis for the certification of home health eligibility, upon request, to the home health agency, review entities, and/or CMS. The HHA will obtain the documentation from the certifying physician and/or acute/post-acute care facility that substantiates the certification of patient eligibility for its own medical record for the patient and must be able to provide it to CMS and its review entities upon request. If the documentation used as the basis for the certification of eligibility is not sufficient to demonstrate that the patient is or was eligible to receive services under the Medicare home health benefit, payment will not be rendered for home health services provided. Obtaining documentation from the certifying physician and/or acute/post-acute care facility should not lead to delays in accepting patients. We require certifications to be obtained at the time the plan of care is established or as soon thereafter as possible.10 This allows flexibility for HHAs to develop the plan of care in consultation with the physician, if needed. The plan of care requirements in the Medicare Conditions of Participation (CoPs) at § 484.18(a) states that the plan of care developed in consultation with the agency staff covers all pertinent diagnoses, including mental status, types of services and equipment required, frequency of visits, prognosis, rehabilitation potential, functional 10 Medicare General Information, Entitlement, and Eligibility Manual (CMS Pub. 100–01) Ch. 4, sec. 30.1. Available at: https://www.cms.gov/ Regulations-and-Guidance/Guidance/Manuals/ Downloads/ge101c04.pdf. PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 66047 limitations, activities permitted, nutritional requirements, medications and treatments, any safety measures to protect against injury, instructions for timely discharge or referral, and any other appropriate items. If a physician refers a patient under a plan of care that cannot be completed until after an evaluation visit, the physician is consulted to approve additions or modifications to the original plan. Orders for therapy services include the specific procedures and modalities to be used and the amount, frequency, and duration. The therapist and other agency personnel participate in developing the plan of care. The Medicare CoPs, at § 484.55(a), require the completion of an initial assessment within 48 hours of referral, or within 48 hours of the patient’s return home, or on the physicianordered start of care date. The initial assessment visit must be done to determine the immediate care and support needs of the patient and to determine eligibility for the Medicare home health benefit, including homebound status. The Medicare CoPs, at § 484.55(b), require a comprehensive assessment to be completed in a timely manner, consistent with the patient’s immediate needs, but no later than 5 calendar days after the start of care, and for eligibility for the Medicare home health benefit to be determined, including homebound status. We would expect that the findings from initial assessment and/or comprehensive assessment of the patient would be communicated to the certifying physician. The certifying physician can incorporate this information into his/her medical record for the patient and use it to develop the plan of care and to support his/her certification of patient eligibility. The certifying physician must review and sign off on anything incorporated it into his or her medical record for the patient that is used to substantiate the certification/ re-certification of patient eligibility for the home health benefit. Also, per the regulations at § 424.22(a)(1)(v), the face-to-face encounter itself, can occur up to 30 days after the start of care. As such, there may be instances where the certification of patient eligibility and associated supporting documentation may not be available until after the patient has been accepted by the HHA and services have commenced. As noted above, the certification must be obtained at the time the plan of care is established or as soon thereafter as possible. Therefore, it is not acceptable for HHAs to wait until the end of the 60-day episode of care to obtain a completed certification of E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66048 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations patient eligibility and supporting documentation from the certifying physician and/or the acute/post-acute care facility (if the patient was directly admitted to home health). Comment: Commenters stated that most of the issues with the face-to-face encounter narrative stemmed from a misunderstanding by providers and physicians on what is considered a sufficient narrative. Therefore, if the certifying physician’s and/or acute/postacute care facility’s medical record for the patient is reviewed to determine initial patient eligibility for the home health benefit, then CMS should define what it would consider sufficient documentation to substantiate the certification of eligibility. Some commenters stated that it is impossible for the HHA to ensure that the documentation in the certifying physician and/or acute/post-acute care facility medical record for the patient is sufficiently detailed to support the certification of patient eligibility. A few commenters stated that some physicians are reluctant or resistant to providing additional documentation or changing previous practices in order to comply with new requirements. Response: HHAs should obtain as much documentation from the certifying physician’s medical records and/or the acute/post-acute care facility’s medical records (if the patient was directly admitted to home health) as they deem necessary to assure themselves that the Medicare home health patient eligibility criteria have been met. As previously noted, we have issued several educational articles and a set of Q&As to help aide physicians and HHAs in complying with the face-to-face encounter narrative requirement and similarly could be used as a guide on what would be considered adequate documentation in the certifying physician’s and/or acute/post-acute care facility’s medical record for the patient to substantiate eligibility for the Medicare home health benefit. The most recent article issued—MLN Matters® SE1405: Documentation Requirements for Home Health Prospective Payment System (HH PPS) Face-to-Face Encounter—explains what constitutes a sufficient face-to-face encounter narrative and includes several examples. Other articles, including SE1405, and a set of Q&As on the faceto-face encounter requirement and physician certification of eligibility can be found on the Home Health Agency (HHA) center Web page at: https:// www.cms.gov/Center/Provider-Type/ Home-Health-Agency-HHA-Center.html under ‘‘spotlights’’. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 The Medicare Financial Management Manual requires providers to provide the documentation necessary to determine that the billed-for services are covered.11 Home health services cannot be covered without a valid patient certification/re-certification of eligibility, in accordance with our regulations at § 424.22. The certifying physician and/or the acute/post-acute care facility medical record for the patient must contain information that justifies the referral for Medicare home health services, including the need for the skilled services initially ordered and the patient’s homebound status. This information can be found most often in clinical and progress notes and discharge summaries. In addition, the certifying physician’s and/or acute/postacute care facility’s medical record for the patient must contain the actual clinical note for the face-to-face encounter visit that demonstrates that the visit occurred within the required timeframe, was related to the primary reason the patient requires home health services, and was performed by either: (1) The certifying physician; (2) a physician, with privileges, who cared for the patient in an acute or post-acute care facility from which the patient was directly admitted to home health; or (3) an allowed NPP as set out in § 424.22(a)(1)(v)(A). It is permissible for the HHA to communicate with and provide information to the certifying physician about the patient’s homebound status and need for skilled care and for the certifying physician to incorporate this information into his or her medical record for the patient. The certifying physician must review and sign off on anything incorporated it into his or her medical record for the patient that is used to support his/her certification/recertification of patient eligibility for the home health benefit. In addition, any information from the HHA (including the comprehensive assessment) that is incorporated into the certifying physician’s and/or the acute/post-acute care facility’s medical record for the patient (if the patient was directly admitted to home health) and used to support the certification of patient eligibility for the home health benefit, must corroborate the certifying physician’s and/or the acute/post-acute care facility’s own documentation/ medical record entries, including the diagnoses and the patient’s condition reported on the comprehensive 11 Medicare Financial Management Manual, (CMS Pub. 100–06), Ch. 3, sec. 90.1(E). Available at: https://www.cms.gov/Regulations-and-Guidance/ Guidance/Manuals/downloads/fin106c03.pdf PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 assessment. With respect to DMEPOS, it has been our longstanding policy that records from suppliers or healthcare professionals with a financial interest in the claim outcome are not considered sufficient by themselves for the purpose of determining that a DMEPOS item is reasonable and necessary. We believe the same safeguards are necessary for home health patient eligibility determinations and consistent with the statutory intent in sections 1814(a), 1835(a) and 1877 of the Act, which require a physician, who does not have financial relationship with the HHA, to certify the patient’s eligibility for home health services. We want to remind certifying physicians and acute/post-acute care facilities of their responsibility to provide the medical record documentation that supports the certification of patient eligibility for the Medicare home health benefit. Certifying physicians who show patterns of non-compliance with this requirement, including those physicians whose records are inadequate or incomplete for this purpose, may be subject to increased reviews, such as through provider-specific probe reviews. Comment: A few commenters questioned whether a certification statement will still be required, if the certification statement can be added to the plan of care, and what exactly constitutes a sufficient certification of eligibility. One commenter recommended that CMS consider a signed and dated order for home health services for an eligible patient by an eligible practitioner as satisfying the certification requirements. Response: As a reminder, the statute at sections 1814(a)(2)(C) and 1835(a)(2)(A) outlines the certification and re-certification requirements for Medicare home health services. These requirements are also reflected in regulations at § 424.22(a) and (b). A physician will still be required to certify patient eligibility for the Medicare home health benefit. Specifically for a certification of eligibility to be sufficient, a physician must certify that: • The individual needs or needed intermittent skilled nursing care, physical therapy, and/or speechlanguage pathology services as defined in § 409.42(c). • Home health services are or were required because the individual was confined to the home (as defined in sections 1835(a) and 1814(a) of the Act), except when receiving outpatient services. • A plan for furnishing the services has been established and is or will be E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 periodically reviewed by a physician who is a doctor of medicine, osteopathy, or podiatric medicine (a doctor of podiatric medicine may perform only plan of treatment functions that are consistent with the functions he or she is authorized to perform under state law).12 • Home health services will be or were furnished while the individual is or was under the care of a physician who is a doctor of medicine, osteopathy, or podiatric medicine. • A face-to-face patient encounter occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care, was related to the primary reason the patient requires home health services, and was performed by the certifying physician, a physician, with privileges, who cared for the patient in an acute or post-acute care facility from which the patient was directly admitted to home health, or an allowed NPP defined in § 424.22(a)(1)(v). The certifying physician must also document the date of the encounter as part of the certification. For instances where the physician orders skilled nursing visits for management and evaluation of the patient’s care plan,13 the certifying physician must include a brief narrative that describes the clinical justification of this need and the narrative must be located immediately before the physician’s signature. If the narrative exists as an addendum to the certification form, in addition to the physician’s signature on the certification form, the physician must sign immediately after the narrative in the addendum. When there is a continuous need for home health care after an initial 60-day episode of care, a physician is also required to recertify the patient’s eligibility for the home health benefit. In 12 The physician cannot have a financial relationship as defined in § 411.354 of the chapter, with that HHA, unless the physician’s relationship meets one of the exceptions in section 1877 of the Act, which sets forth general exceptions to the referral prohibition related to both ownership/ investment and compensation. 13 Skilled nursing visits for management and evaluation of the patient’s care plan are reasonable and necessary where underlying conditions or complications require that only a registered nurse can ensure that essential unskilled care is achieving its purpose. For skilled nursing care to be reasonable and necessary for management and evaluation of the patient’s plan of care, the complexity of the necessary unskilled services that are a necessary part of the medical treatment must require the involvement of skilled nursing personnel to promote the patient’s recovery and medical safety in view of the patient’s overall condition (reference § 409.33 and section 40.1.2.2 in Chapter 7 of the Medicare Benefits Policy Manual (Pub. 100–02)). VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 accordance with § 424.22(b), a recertification is required at least every 60 days, preferably at the time the plan is reviewed, and must be signed and dated by the physician who reviews the plan of care. In recertifying the patient’s eligibility for the home health benefit, the recertification must indicate the continuing need for skilled services and estimate how much longer the skilled services will be required. The need for occupational therapy may be the basis for continuing services that were initiated because the individual needed skilled nursing care, physical therapy, or speech–language pathology services. Again, for instances where the physician ordering skilled nursing visits for management and evaluation of the patient’s care plan, the physician must include a brief narrative that describes the clinical justification of this need and the narrative must be located immediately before the physician’s signature. If the narrative exists as an addendum to the recertification form, in addition to the physician’s signature on the recertification form, the physician must sign immediately after the narrative in the addendum. Comment: One commenter strongly believed that allowing a face-to-face encounter to occur up to 90 days prior to the start of home health care was not appropriate, stating that if a physician saw the patient 90 days ago and did not order home health care at that time, then it is unclear why is home health being ordered at a later date. Several commenters recommended that CMS eliminate the face-to-face encounter requirement altogether for instances where the patient was admitted directly from an acute/post-acute care facility since the patient would have seen a physician. Response: We did not propose to alter the timeframes during which a face-toface encounter can occur nor did we propose to eliminate the face-to-face requirement for instances where the patient was admitted directly from an acute/post-acute care facility. We refer the commenters to the CY 2011 HH PPS final rule (75 FR 70428–70429), where we outlined our rationale on why the face-to-face encounter timeframe of up to 90 days prior and no more than 30 days after the start of home health care was finalized. We believe that sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act do not provide the Secretary with the authority to eliminate the face-toface encounter requirement altogether for instances where the patient was admitted directly from an acute/postacute care facility. However, since we are finalizing the elimination of the face-to-face narrative requirement as PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 66049 part of the certification of eligibility for home health services, and, as commenters’ noted, an encounter with a physician would have certainly occurred when a patient is admitted directly from an acute/post-acute care facility, documenting the date of the face-to-face encounter should not be burdensome. Although a home health patient would have seen a physician if they were admitted directly from an acute/post-acute care facility, the certification of eligibility still requires that the encounter be related to the primary reason for home health care. Therefore, we believe that documentation of a face-to-face encounter as part of the certification of eligibility should still be required for patients admitted into home health care directly from an acute/post-acute care facility. Comment: Several commenters, including MedPAC, asked that CMS develop a standardized form for use in certifying patient eligibility for the home health benefit and/or making referrals to home health. MedPAC noted that CMS concurred with three recommendations in a recent audit by the Office of Inspector General (OIG), including the consideration of a standardized form for the face-to-face encounter narrative to simplify compliance. Other commenters asked that CMS consider requiring the use of CMS–485 form again. Response: We do not believe that a standard certification/recertification of eligibility form is necessary given the elimination of the face-to-face narrative. The regulations at 42 CFR 424.22 clearly articulate what elements need to be contained in a certification/recertification form created by an HHA. We are pursuing development of an electronic clinical template that would allow electronic health records vendors, in all 50 states, to assist physicians in thoroughly documenting patient eligibility for the Medicare home health benefit. In order to facilitate adoption of suggested clinical elements by the provider community, we are currently collaborating with the Office of the National Coordinator for Health IT (ONC) and the electronic Determination of Coverage (eDoC) workgroup in developing the interoperability standards necessary for an electronic clinical template. We do not believe that we should require the use of the old CMS–485 form. The CMS–485 form was discontinued over a decade ago to provide HHAs with more plan of care flexibility. We encourage HHAs and physicians to work together in developing formats for the home health plan of care that best meets their needs. E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66050 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Comment: We received several comments advocating for us to allow other types of clinicians to certify eligibility and order home health services, such as physician assistants, nurse practitioners, and advancedpractice registered nurses. Response: These comments are outside the scope of this rule. We remind the commenters that the statute (sections 1814(a) and 1835(b) of the Act) require a physician to certify patient eligibility for the Medicare home health benefit. We do not have the authority to allow for someone other than a Doctor of Medicine, Osteopathy or Podiatry to certify patient eligibility for the Medicare home health benefit. A change to the statute would require an act of the Congress. Comment: Some commenters recommended statutory changes. Response: We remind commenters that only the Congress (not CMS) has the authority to make statutory changes. Final Decision: We are finalizing our proposal to eliminate the face-to-face encounter narrative as part of the certification of patient eligibility for the Medicare home health benefit, effective for episodes beginning on or after January 1, 2015. The certifying physician will still be required to certify that a face-to-face patient encounter, which is related to the primary reason the patient requires home health services, occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care and was performed by a physician or allowed non-physician practitioner as defined in § 424.22(a)(1)(v)(A), and to document the date of the encounter as part of the certification of eligibility. For instances where the physician is ordering skilled nursing visits for management and evaluation of the patient’s care plan, the physician will still be required to include a brief narrative that describes the clinical justification of this need as part of the certification/re-certification of eligibility as outlined in § 424.22(a)(1)(i) and § 424.22(b)(2). In determining whether the patient is or was eligible to receive services under the Medicare home health benefit at the start of care, we will require documentation in the certifying physician’s medical records and/or the acute/post-acute care facility’s medical records (if the patient was directly admitted to home health) to be used as the basis for certification of home health eligibility. We will require the documentation to be provided upon request to the home health agency, review entities, and/or CMS. Criteria for patient eligibility are described at VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 § 424.22(a)(1) and § 424.22(b). HHAs should obtain as much documentation from the certifying physician’s medical records and/or the acute/post-acute care facility’s medical records (if the patient was directly admitted to home health) as they deem necessary to assure themselves that the Medicare home health patient eligibility criteria have been met and must be able to provide it to CMS and its review entities upon request. If the documentation used as the basis for the certification of eligibility is not sufficient to demonstrate that the patient is or was eligible to receive services under the Medicare home health benefit, payment will not be rendered for home health services provided. Again, we want to remind certifying physicians and acute/post-acute care facilities of their responsibility to provide the medical record documentation that supports the certification of patient eligibility for the Medicare home health benefit. Certifying physicians who show patterns of non-compliance with this requirement, including those physicians whose records are inadequate or incomplete for this purpose, may be subject to increased reviews, such as through provider-specific probe reviews. The following is a summary of the comments we received regarding the proposal to non-cover physician claims for certification/re-certification of patient eligibility for Medicare home health services when the HHA claim itself was non-covered because the certification/recertification of eligibility was not complete or because there was insufficient documentation to support that the patient was eligible for the Medicare home health benefit. Comments: A few commenters appreciated the proposal to non-cover physician claims for certification/recertification of patient eligibility for Medicare-covered home health services when the HHA claim itself was noncovered because the certification/ recertification of eligibility was not complete or because there was insufficient documentation to support that the patient was eligible for the Medicare home health benefit. Commenters who supported this proposal thanked CMS for linking physician billing to HHA billing as a first step in encouraging more physician accountability. Response: We thank the commenters for their support. We agree that this is an important first step in reminding physicians that coordination and collaboration between the physician and the HHA is essential in providing PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 quality patient care. Coordination and collaboration should include sharing pertinent patient information with one another, especially with regard to the patient’s skilled needs and homebound status. Both entities—the physician who is ultimately responsible for the patient while he/she is receiving home health services and the HHA providing such services—should be held accountable and compensated for their services when appropriate. Comment: Most commenters generally disagreed with the proposal to noncover physician claims for certification/ re-certification of patient eligibility for Medicare home health services when the HHA claim itself was non-covered because the certification/recertification of eligibility was not complete or because there was insufficient documentation to support that the patient was eligible for the Medicare home health benefit. One commenter questioned how CMS will identify ‘‘Part B claims for certification/recertification’’ and stated that the face-toface encounter visit could occur during one of several Evaluation & Management (E&M) visits. Several commenters stated that while they support encouraging physicians to engage in the planning and oversight of home health services, they are concerned that some physicians, with limited understanding of the regulations, may be reluctant to refer to home health because of concerns about denials of reimbursement. Other commenters stated that physician claims for certification/recertification should not be denied because physicians are ‘‘in good faith’’ certifying the patient’s eligibility for the home health benefit and billing for certification/ recertification also includes activities performed to ensure the initial implementation of the plan of care. A few commenters suggested that, at a minimum, finalizing this proposal should be delayed until it can be proposed as part of the annual changes to the physician fee schedule. Response: Physician certification or re-certification claims are Part B physician claims paid for under the Physician Fee Schedule. These claims are claims billed using HCPCS code G0180 (certification) or G0179 (recertification). These claims are not Evaluation and Management claims and are billed when the patient is not present. The descriptions of these two codes indicate that they are used to bill for certification or re-certification of patient eligibility ‘‘for Medicare-covered home health services under a home health plan of care (patient not present), including contacts with home health E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations agency and review of reports of patient status required by physicians to affirm the initial implementation of the plan of care that meets patient’s needs, per certification period.’’ As underlined above, we note that these codes are for physician certification or re-certification for Medicare-covered home health services. If there are no Medicarecovered home health services, these codes should not be billed or paid. As such, if the HHA claim is denied, the corresponding physician claim should not be covered because there is no longer a corresponding claim for Medicare-covered home health services. Physicians still have the option of billing Part B for E&M visits provided, transition care management, and other services as long as they follow the required billing instructions. We believe that including this proposal in the CY 2015 HH PPS proposal rule is sufficient and there is no need to re-propose this policy in next year’s Physician Fee Schedule proposed rule. We received over 300 comments on the CY 2015 HH PPS proposed rule, many of which were from physician associations, such as the American College of Physicians, American Academy of Home Care Medicine, American Medical Association, and the Society of Hospital Medicine, among others. Comment: Commenters stated that non-coverage of physician claims for certification/re-certification when the HHA claim itself was non-covered would most likely not result in a change in physician practices/behaviors due to the small payment amounts for such claims. HHAs will still encounter issues with obtaining the necessary certification/re-recertification and supporting documentation form the certifying physician. Response: While the non-coverage of physician claims for certification/recertification of patient eligibility for Medicare-covered home health services following the denial of a HHA claim may not serve as a sufficient incentive for encouraging certifying physicians to work collaboratively with HHAs and to provide the necessary documentation to substantiate the certification of eligibility, certifying physicians who show patterns of non-compliance with providing sufficient documentation, including those physicians whose records are inadequate or incomplete for this purpose, may be subject to increased reviews, such as through provider-specific probe reviews. Claims subject to increased review may include services unrelated to the home health claim being reviewed or the beneficiary who was referred for home health services. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 Final Decision: We are finalizing this proposal as proposed. Physician claims for certification/recertification of eligibility for home health services (G0180 and G0179, respectively) will not be covered if the HHA claim itself was non-covered because the certification/recertification of eligibility was not complete or because there was insufficient documentation to support that the patient was eligible for the Medicare home health benefit. This proposal will be implemented through future sub-regulatory guidance. 3. Proposed Clarification on When Documentation of a Face-to-Face Encounter Is Required In the CY 2011 HH PPS final rule (75 FR 70372), in response to a commenter who asked whether the face-to-face encounter is required only for the first episode, we stated that the Congress enacted the face-to-face encounter requirement to apply to the physician’s certification, not recertifications. In subregulatory guidance (face-to-face encounter Q&As on the CMS Web site at: https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ HomeHealthPPS/Downloads/HomeHealth-Questions-Answers.pdf), response to Q&A #11 states that the face-to-face encounter requirement applies to ‘‘initial episodes’’ (the first in a series of episodes separated by no more than a 60-day gap). The distinction between what is considered a certification (versus a recertification) and what is considered an initial episode is important in determining whether the face-to-face encounter requirement is applicable. Recent inquiries question whether the face-to-face encounter requirement applies to situations where the beneficiary was discharged from home health with goals met/no expectation of return to home health care and readmitted to home health less than 60 days later. In this situation, the second episode will be considered a certification, not a recertification, because the HHA will be required to complete a new Start of Care (SOC) OASIS to initiate care. However, for payment purposes, the second episode is considered a subsequent episode, because there was no gap of 60 days or more between the first and second episodes of care. Therefore, in order to determine when documentation of a patient’s face-to-face encounter is required under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, we proposed to clarify that the face-to-face encounter requirement is applicable for certifications (not recertifications), rather than initial episodes. A PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 66051 certification (versus recertification) is considered to be any time that a new SOC OASIS is completed to initiate care. Because we proposed to clarify that a certification is considered to be any time that a new SOC OASIS is completed to initiate care, we will also revise Q&A #11 on the CMS Web site (https://www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ HomeHealthPPS/Downloads/HomeHealth-Questions-Answers.pdf) to reflect this proposed clarification. If a patient was transferred to the hospital and remained in the hospital after day 61 (or after the first day of the next certification period), once the patient returns home, a new SOC OASIS must be completed. Therefore, this new episode will not be considered continuous and a face-to-face encounter needs to be documented as part of the certification of patient eligibility.14 Comment: One commenter stated that they were confused by the proposal and were seeking clarification as to whether CMS was proposing to require documentation of a face-to-face encounter for all certification episodes, initial and re-certifications. Response: We are not requiring documentation of a face-to-face encounter for all certification periods. Documentation of a face-to-face encounter is only required for certifications and not re-certifications. As previously noted, a certification (versus recertification) is considered to be any time that a new SOC OASIS is completed to initiate care. A recertification is any second or later episode of continuous home health care (where a recertification/follow-up OASIS is completed).15 Comment: A few commenters were supportive of the proposed clarification on when documentation of a face-to-face encounter is required. One commenter stated that their agency has been obtaining these since the inception of the face-to-face requirement and that the 14 https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/OASIS/ downloads/OASISConsiderationsforPPS.pdf 15 We note that for instances where the patient was hospitalized and then returns to home health during the last 5 days of an episode of care, the requirement to complete a resumption of care OASIS could overlap with the time period requiring completion of a recertification/follow-up OASIS. In these instances, only the resumption of care OASIS is necessary and the subsequent episode of care would still be considered ‘‘continuous’’ and thus require a re-certification of patient eligibility. If the patient receives a re-certification assessment during days 56–60, is hospitalized, and returns home on day 61 following, if the HHRG remains the same then the second episode of care would be considered continuous and thus be considered a recertification. However, if the HHRG is different, this would result in a new Start of Care (SOC) OASIS and thus be considered a new certification. E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66052 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations proposed clarification would not present a change. The commenter goes on to state that the proposed clarification helps to ensure that the patient continues to have real oversight from the community physician that is overseeing the patient’s care. Response: We thank the commenters for their support of the proposed clarification. We have heard, anecdotally, from several HHAs that they are already in compliance with this proposed clarification and, as such, this clarification will pose no additional burden for those HHAs. We agree that equating a certification with any time a SOC OASIS is completed to initiate care will further encourage physician accountability in certifying a patient’s eligibility for the Medicare home health benefit and in establishing and overseeing the patient’s plan of care. Comment: Several other commenters focused their comments solely on instances where a patient was discharged and then readmitted during the same 60-day episode of care. Commenters stated that CMS should not finalize its proposal as these episodes are currently subject to partial episode payment (PEP) adjustments and that the PEP adjustment is an appropriate safeguard to prevent inappropriate utilization. A few commenters asked CMS to clarify whether instances where the patient is returning to home health post-discharge with care initiated with a new SOC OASIS, but during (what would have been) the same 60-day episode of care, would require documentation of a new physician faceto-face encounter. A few commenters expressed concerns with the current PEP policy and stated that some HHAs are not discharging patients that have finished their course of treatment so that those episodes will not become PEPs if the patient is discharged and returns to home care within (what would have been) the 60-day episode of care. Response: A Partial Episode Payment (PEP) is applied to home health episodes that either end in discharge and are then followed by readmission to the same home health agency (HHA) within (what would have been) the original 60-day episode, or result in a transfer to a HHA that is different than the HHA that provided the initial home health episode. The purpose of this clarification is to ensure that HHAs understand when they must document that a face-to-face encounter occurred. For instances where a patient was discharged and then readmitted during (what would have been) the same 60day episode of care, the second episode would be considered a certification as it would be initiated with a SOC OASIS VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 and would require documentation of a face-to-face encounter. Depending on when the face-to-face encounter occurred, the face-to-face encounter from the PEP episode could be used for the new certification as long as it was performed within the required timeframe and is still related to the primary reason the patient requires home health services. The average number of days between a PEP episode and a subsequent episode of care was 17.5 days, with the 25th percentile at 5 days and the 75th percentile at 24 days in CY 2012 and approximately 60 percent of the time there was a hospitalization between a PEP episode and the subsequent episode of care. For those instances where the patient was hospitalized between the PEP episode and the subsequent episode of care, the patient would have seen a physician, so documenting the face-to-face encounter as part of the certification of eligibility for the subsequent episode of care should be easily accomplished. PEP episodes are paid a rate which is proportional to the days of service provided during the episode. In CY 2012 only 2.2 percent of episodes were PEP episodes. Table 9 below compares the number of days in between the last visit and the ‘‘through’’ date on the claim for PEPs and Non-PEP episodes. The distribution below for non-PEP episodes does not indicate that there is a wide-spread issue with HHAs refusing to discharge patients that have otherwise met all goals long before the end of the 60-day episode in hopes of avoiding PEPs. However, we will continue to monitor PEP episodes and will consider whether a refinement to the PEP policy is necessary in the future. TABLE 9—DISTRIBUTION OF DAYS BETWEEN THE LAST EPISODE VISIT AND EPISODE THROUGH DATE FOR NONPEP EPISODES (N = 3,796,143) AND PEP EPISODES (8,105) AT LEAST 55 DAYS IN LENGTH, CY 2012 Distribution point Non-PEP episodes 10th Percentile .. 25th Percentile .. 50th Percentile (Median) ........ Mean Average .. 75th Percentile .. 90th Percentile .. 99th Percentile .. PEP Episodes 1.0 1.0 1.0 1.0 2.0 4.7 4.0 7.0 52.0 1.0 6.9 7.0 24.0 51.0 Source: Abt Associates analysis of 100% CY 2012 Medicare Home Health claims data. PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 Comment: One commenter asked that CMS confirm that over 800,000 episodes fit into a category of admissions shortly following discharges with goals met because that number seemed high. Response: In the CY 2015 HH PPS proposed rule we noted, in the Collection of Information section, that: ‘‘we estimate that of the 6,562,856 episodes in the CY 2012 home health Datalink file, 3,096,680 SOC assessments were performed on initial home health episodes. If this proposal is implemented, an additional 830,287 episodes would require documentation of a face-to-face encounter for subsequent episodes that were initiated with a new SOC OASIS assessment’’ (79 FR 38412). This includes instances where patients finished a 60-day episode of care, were discharged, and then were re-admitted before 60 days lapsed without having home health care. In addition, this estimate represents a ‘‘worst-case’’ scenario as it does not account for instances where HHAs already consider anytime a new SOC OASIS is completed as a certification and are thus already in compliance. Home Health Compare, via Medicare.gov, reports national and state-level data on how often home health patients had to be admitted to the hospital and how often patients receiving home health care needed urgent, unplanned care in the ER without being admitted. Nationally, for CY 2013, 12 percent of home health patients receiving home health care needed urgent, unplanned care in the emergency room and 16 percent of home health patients had to be admitted to the hospital. Subsequent episodes initiated with a SOC OASIS represent 12.7 percent of all home health episodes in the CY 2012 Datalink file. Most commenters focused on instances where the initial episode of care was a PEP (that is, the patient transferred to another HHA or was discharged before the end of a 60-day episode and then readmitted during what would have been the same 60-day episode of care), which were only 2.2 percent of episodes in CY 2012. This clarification was intended to mostly respond to instances of patients being discharged after the end of a 60day episode of care and then readmitted without a 60-day gap in care before the start of the next episode. For claims processing purposes (to categorize episodes into ‘‘early’’ versus ‘‘late’’ for case-mix adjustment), these episodes are considered subsequent episodes rather than initial episodes of care. Sub-regulatory guidance (face-toface encounter Q&As on the CMS Web site at: https://www.cms.gov/Medicare/ E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Medicare-Fee-for-Service-Payment/ HomeHealthPPS/Downloads/HomeHealth-Questions-Answers.pdf) stated that face-to-face encounter requirement applies to ‘‘initial episodes’’. We received several questions from the MACs and providers asking whether the face-to-face encounter was required for instances where the patient was discharged at the end of a 60-day episode of care and then re-admitted, sometimes up to 50 days later and for reasons completely unrelated to the previous episode of care. This prompted us to propose a clarification in the CY 2015 HH PPS proposed rule that would make it clear that documentation of a face-to-face encounter is required for each certification and a certification is any time a SOC OASIS is completed to initiate care. Comment: One commenter stated that while it is understandable to categorize the completion of a SOC OASIS as a certification, thus requiring documentation of a face-to-face encounter, concerns exist that this will increase burden without any direct benefit. Several commenters stated that for subsequent episodes initiated with a SOC OASIS, a certification (which requires documentation of a face-to-face encounter) versus a recertification should be differentiated based on whether the reason for home care changed. Several commenters stated that a new face-to-face encounter should only be required when the second admission to home health services is for a wholly different reason than presented in the original admission. One commenter stated that a subsequent episode should only be considered a certification (which requires documentation of a face-to-face encounter) when a new physician is the certifying physician or if a new home health agency is providing the care. Response: If the patient is hospitalized during a 60-day episode of care and is expected to return to home health during the same 60-day episode of care, the HHA has the option to complete a transfer OASIS without discharging the patient. If the patient returns to home heath during that same 60-day home health episode, a resumption of care OASIS would be completed upon return, and depending on when the patient returned to home health, a re-certification/follow-up OASIS would be completed during the last 5 days of the episode. The subsequent episode would be considered continuous for recertification purposes and documentation of a face-to-face encounter would not be required. More often than not, the primary reason for home care is changing between episodes of care when the subsequent episode of care is initiated with a SOC OASIS, regardless of whether the patient remains with the same HHA or is receiving care from another HHA. As such, we are clarifying that documentation that face-to-face encounter occurred is required for every certification and that a certification (versus recertification) is considered to be any time that a new SOC OASIS is completed to initiate care. When comparing the primary reason for home health care (the primary diagnosis (item M1020) on the OASIS) at the ICD–9–CM three-digit category level, subsequent episodes initiated with a SOC OASIS had a different primary diagnosis (primary reason for home care) than the previous episode of care approximately 73 percent of the time. The subsequent episode’s primary 66053 diagnosis was different from the previous episodes’ primary diagnosis approximately 70 percent of the time when the subsequent episode of care was with the same HHA, and 80 percent of the time when the subsequent episode of care with a different HHA. Just examining the subsequent episodes of care that follow a PEP, we found that subsequent episodes of care initiated with a SOC OASIS had a different primary diagnosis than the previous episode of care approximately 72 percent of the time. The subsequent episode’s primary diagnosis was different from the previous PEP episodes’ primary diagnosis approximately 66 percent of the time when the subsequent episode of care was with the same HHA, and 76 percent of the time when the subsequent episode of care with a different HHA. As we noted above, for CY 2012, approximately 60 percent of the time there was a hospitalization between a PEP episode and the subsequent episode of care. Therefore, we determined whether there was an intervening hospitalization between the PEP episode and the episode that follows (observed in the 60 days prior to the subsequent episode’s start) and if so, whether there were differences in the clinical and functional levels between the PEP episode and the subsequent episode of care (Table 10 and Table 11 below). Overall, clinical levels only matched in 53 percent of instances. Functional levels matched in 63 percent of instances. Clinical levels are higher in 24 percent of the episodes that follow PEP episodes and lower in 22 percent of episodes. Functional levels are higher in approximately 20 percent of episodes that follow PEP episodes and lower in 17 percent of episodes. TABLE 10—CROSS-TABULATION OF CLINICAL LEVEL BETWEEN A PARTIAL EPISODE PAYMENT (PEP) EPISODE AND EPISODES THAT FOLLOW BY INTERVENING HOSPITALIZATION PRESENCE, CY 2012 No intervening hospitalization [Total episodes = 81,719] Low Low ................................................................................... Medium ............................................................................ High .................................................................................. 12.3% 7.8% 4.8% Medium Intervening hospitalization [Total episodes = 30,416] High 7.1% 12.2% 9.8% 5.4% 11.4% 29.1% Low Medium 9.2% 6.7% 4.1% 6.9% 12.8% 10.8% High 5.1% 12.7% 31.7% tkelley on DSK3SPTVN1PROD with RULES2 Source: Abt Associates analysis of 100% Medicare Home Health claims, CY 2012. Note(s): Low = Clinical level 1; Medium = Clinical level 2; High = Clinical level 3 as described in section III.C of this rule. TABLE 11—CROSS-TABULATION OF FUNCTIONAL LEVEL BETWEEN A PARTIAL EPISODE PAYMENT (PEP) EPISODE AND EPISODES THAT FOLLOW BY INTERVENING HOSPITALIZATION PRESENCE, CY 2012 No intervening hospitalization [Total episodes = 81,719] Low Low ................................................................................... VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00023 6.6% Fmt 4701 Medium High 7.8% Sfmt 4700 Intervening hospitalization [Total episodes = 30,416] 1.4% E:\FR\FM\06NOR2.SGM Low 6.4% 06NOR2 Medium 8.4% High 1.4% 66054 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations TABLE 11—CROSS-TABULATION OF FUNCTIONAL LEVEL BETWEEN A PARTIAL EPISODE PAYMENT (PEP) EPISODE AND EPISODES THAT FOLLOW BY INTERVENING HOSPITALIZATION PRESENCE, CY 2012—Continued No intervening hospitalization [Total episodes = 81,719] Low Medium ............................................................................ High .................................................................................. 6.9% 1.1% Medium Intervening hospitalization [Total episodes = 30,416] High 38.6% 8.5% Low 10.3% 18.8% 8.3% 1.0% Medium 40.6% 8.1% High 10.4% 15.3% Source: Abt Associates analysis of 100% Medicare Home Health claims, CY 2012. Note(s): Low = Functional level 1; Medium = Functional level 2; High = Functional level 3 as described in section III.C of this rule. Final Decision: In order to determine when documentation of a patient’s faceto-face encounter is required under sections 1814(a)(2)(C) and 1835 (a)(2)(A) of the Act, we are clarifying that the face-to-face encounter requirement is applicable for certifications (not recertifications), rather than initial episodes. A certification (versus recertification) is considered to be any time that a new Start of Care OASIS is completed to initiate care. tkelley on DSK3SPTVN1PROD with RULES2 C. Recalibration of the HH PPS CaseMix Weights As stated in the CY 2015 proposed rule, for CY 2012, we removed two hypertension codes from our case-mix system and recalibrated the case-mix weights in a budget neutral manner. When recalibrating the case-mix weights for the CY 2012 HH PPS final rule, we used CY 2005 data in the four-equation model used to determine the clinical and functional points for a home health episode and CY 2007 data in the payment regression model used to determine the case-mix weights. We estimated the coefficients for the variables in the four-equation model using CY 2005 data to maintain the same variables we used for CY 2008 when we implemented the fourequation model, thus minimizing substantial changes. Due to a noticeable shift in the number of therapy visits provided as a result of the 2008 refinements, at the time, we decided to use CY 2007 data in the payment regression. As part of the CY 2012 recalibration, we lowered the high therapy weights and raised the low or no therapy weights to address MedPAC’s concerns that the HH PPS overvalues therapy episodes and undervalues non-therapy episodes (March 2011 MedPAC Report to the Congress: Medicare Payment Policy, p. 176). These adjustments better aligned the case-mix weights with episode costs estimated from cost report data. The CY 2012 recalibration, itself, was implemented in a budget neutral manner. However, we noted that in the CY 2012 HH PPS final rule, we also VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 finalized a 3.79 percent reduction to payments in CY 2012 and a 1.32 percent reduction for CY 2013 to account for the nominal case-mix growth identified through CY 2009. For CY 2014, as part of the rebasing effort mandated by the Affordable Care Act, we reset the case-mix weights, lowering the average case-mix weight to 1.0000. To lower the case-mix weights to 1.0000, each case-mix weight was decreased by the same factor (1.3464), thereby maintaining the same relative values between the weights. This ‘‘resetting’’ of the case-mix weights was done in a budget neutral manner, inflating the national, standardized 60day episode rate as the starting point for rebasing by the same factor (1.3464) that was used to decrease the weights. In the CY 2014 HH PPS final rule, we also finalized reductions ($80.95) to the national, standardized 60-day episode payment amount each year from CY 2014 through CY 2017 to better align payments with costs (78 FR 72293), as required by the Affordable Care Act. For CY 2015, we proposed to recalibrate the case-mix weights, adjusting the weights relative to one another, using more current data and aligning payments with current utilization data in a budget neutral manner. We also proposed to recalibrate the case-mix weights annually in subsequent payment updates based on the methodology finalized in the 2008 refinements (72 FR 25359–25392) and the CY 2012 HH PPS final rule (76 FR 68526), with minor changes as described below. To generate the CY 2015 case-mix weights, we used CY 2013 home health claims data (as of June 30, 2014) and used the same methodology finalized in the CY 2012 HH PPS final rule, except where noted below. Similar to the CY 2012 recalibration, some exclusion criteria were applied to the CY 2013 home health claims data used to generate the CY 2015 case-mix weights. Specifically, we excluded Request for Anticipated Payment (RAP) claims, claims without a matched OASIS, claims where total minutes equal 0, claims where the PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 payment amount equals 0, claims where paid days equal 0, claims where covered visits equal 0, and claims without a HIPPS code. In addition, the episodes used in the recalibration were normal episodes. PEP, LUPA, outlier, and capped outlier (that is, episodes that are paid as normal episodes, but would have been outliers had the HHA not reached the outlier cap) episodes were dropped from the data file.16 We note that for the CY 2015 recalibration, a 100 percent sample of CY 2013 claims data as of June 30, 2014 with linked OASIS data was used.17 Similar to the CY 2012 recalibration, the first step in the CY 2015 recalibration was to re-estimate the fourequation model used to determine the clinical and functional points for an episode. The dependent variable for the CY 2015 recalibration is the same as the CY 2012 recalibration, wage-weighted minutes of care. The wage-weighted minutes of care are determined using the CY 2012 Bureau of Labor Statistics national hourly wage plus fringe rates for the six home health disciplines and the minutes per visit from the claim.18 The CY 2012 four-equation model contained the same variables and restrictions as the four-equation model used in the CY 2008 refinements (https://www.cms.gov/ResearchStatistics-Data-and-Systems/StatisticsTrends-and-Reports/Reports/ Downloads/Coleman_Final_April_ 2008.pdf). The CY 2012 model was estimated using CY 2005 data, same data used in the CY 2008 refinements, thereby minimizing changes in the points for the CY 2012 four-equation model. For the CY 2015 four-equation model, we re-examined all of the fourequation or ‘‘leg’’ variables for each of the 51 grouper variables in the CY 2008 model. Therefore, a grouper variable that may have dropped out of the model 16 At a later point, when normalizing the weights, PEP episodes are included in the analysis. 17 Note, for the last recalibration (CY 2012 recalibration), only a 20 percent sample of data was used. 18 Note, wage information for sub-disciplines is also used (e.g., RNs versus RNs and LPNs combined). E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations in one of the four equations in CY 2008 may be in the CY 2015 four-equation model and vice versa. Furthermore, the specific therapy indicator variables that were in the CY 2012 four-equation model were dropped in the CY 2015 four-equation model so that the number of therapy visits provided had less of an impact on the process used to create the case-mix weights. The steps used to estimate the fourequation model are similar to the steps used in the CY 2008 refinements. They are as follows: 19 (1) We estimated a regression model where the dependent variable is wageweighted minutes of care. Independent variables were indicators for which equation or ‘‘leg’’ the episode is in. The four legs of the model are leg 1: early episodes 0–13 therapy visits, leg 2: early episodes 14+ therapy visits, leg 3: Later episodes 0–13 therapy visits, and leg 4: later episodes 14+ therapy visits.20Also, tkelley on DSK3SPTVN1PROD with RULES2 19 All the regressions mentioned in steps 1–4 are estimated with robust standard errors clustered at the beneficiary ID level. This is to account for beneficiaries appearing in the data multiple times. When that occurs, the standard errors can be correlated causing the p-value to be biased downward. Clustered standard errors account for that bias. 20 Early episodes are defined as the 1st or 2nd episode in a sequence of adjacent covered episodes. Later episodes are defined as the 3rd episode and beyond in a sequence of adjacent covered episodes. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 independent variables for each of the 51 grouper variables for each leg of the model are included. (2) Once the four-equation model is estimated, we drop all grouper variables with a coefficient less than 5. We reestimate the model and continue to drop variables and re-estimate until there are no grouper variables with a coefficient of 5 or less. (3) Taking the final iteration of the model in the previous step, we drop all grouper variables with a p-value greater than 0.10. We then re-estimate the model. (4) Taking the model in the previous step, we begin to apply restrictions to certain coefficients. Within a grouper variable we first look across the coefficients for leg1 and leg3. We performed an equality test on those coefficients. If the coefficients are not significantly different from one another (using a p-value of 0.05), we set a restriction for that grouper variable such that the coefficients are equal across leg1 and leg3. We run these tests for all grouper variables for leg1 and leg3. We also run these tests for all grouper Episodes are considered to be adjacent if they are separated by no more than a 60-day period between claims. PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 66055 variables for leg2 and leg4.21 After all restrictions are set, we re-run the regression again taking those restrictions into account. (5) Taking the model from step 4, we drop variables that have a coefficient less than 5 and re-estimate the model a final time. Using complete 2013 claims data as of June 30, 2014, there were no grouper variables with a negative coefficient at this step. The results from the final fourequation model are used to determine the clinical and functional points for an episode and place episodes in the different clinical and functional levels. We take the coefficients from the four equation model, divide them by 10, and round to the nearest integer to determine the points associated with each variable. The points for each of the grouper variables for each leg of the model, updated with complete CY 2013 data as of June 30, 2014, are shown in Table 12. The points for the clinical variables are added together to determine an episode’s clinical score. The points for the functional variables are added together to determine an episode’s functional score. 21 In the CY 2008 rule, there was a further step taken to determine if the coefficients of a grouper variable are equal across all 4 legs. This step was not taken at this time. E:\FR\FM\06NOR2.SGM 06NOR2 66056 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations TABLE 12: Case-Mix Adjustment Variables and Scores 1 Episode number within sequence of adjacent episodes Therapy visits EQUATION: CLINICAL DIMENSION Primary or Other Diagnosis= Blindness/Low Vision Primary or Other Diagnosis = Blood disorders Primary or Other Diagnosis = Cancer, selected benign neoplasms Primary Diagnosis = Diabetes Other Diagnosis = Diabetes 1 2 3 4 5 1 or 2 013 I or 2 14+ 2 4 3 8 8 7 1 Primary or Other Diagnosis = Dysphagia AND Primary or Other Diagnosis = Neuro 3 - Stroke 2 16 Primary or Other Diagnosis = Dysphagia AND M1030 (Therapy at home)= 3 (Enteral) 2 7 8 Primary or Other Diagnosis = Gastrointestinal disorders 9 Primary or Other Diagnosis = Gastrointestinal disorders AND M1630(ostomy)= 1 or2 10 Primary or Other Diagnosis = Gastrointestinal disorders AND Primary or Other Diagnosis = Neuro 1 - Brain disorders and paralysis, OR Neuro 2 - Peripheral neurological disorders, OR Neuro 3 - Stroke, OR Neuro 4 -Multiple Sclerosis Primary or Other Diagnosis = Heart Disease OR Hypertension Primary Diagnosis = Neuro 1 - Brain disorders and paralysis 11 12 1 9 7 6 1 3 11 6 11 Primary or Other Diagnosis = Neuro 1 - Brain disorders and paralysis AND M1840 (Toilet transfer)= 2 or more Jkt 235001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.001</GPH> 13 tkelley on DSK3SPTVN1PROD with RULES2 14+ 8 7 20:03 Nov 05, 2014 013 3 3+ 6 6 VerDate Sep<11>2014 3+ 66057 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Episode number within sequence of adjacent episodes Therapy visits 14 15 EQUATION: Primary or Other Diagnosis = Neuro 1 - Brain disorders and paralysis OR Neuro 2- Peripheral neurological disorders AND M1810 or M1820 (Dressing upper or lower body)= 1, 2, or 3 Primary or Other Diagnosis = Neuro 3 - Stroke 16 1 or 2 3+ 2 013 3 2 7 1 3 10 3+ 2 Primary or Other Diagnosis = Neuro 3 - Stroke AND M1810 or M1820 (Dressing upper or lower body)= 1, 2, or 3 17 1 or 2 013 1 14+ 14+ 4 7 Primary or Other Diagnosis = Neuro 3 - Stroke AND M1860 (Ambulation) = 4 or more 4 8 Primary or Other Diagnosis = Neuro 4 - Multiple Sclerosis AND AT LEAST ONE OF THE FOLLOWING: M1830 (Bathing)= 2 or more OR 18 M1840 (Toilet transfer)= 2 or more 3 8 7 13 19 Primary or Other Diagnosis = Ortho 1 - Leg Disorders or Gait Disorders AND M1324 (most problematic pressure ulcer stage)= 1, 2, 3 or 4 8 1 8 4 20 Primary or Other Diagnosis = Ortho 1 - Leg OR Ortho 2 Other orthopedic disorders AND M1030 (Therapy at home)= 1 (N/Infusion) or 2 (Parenteral) 4 3 2 21 Primary or Other Diagnosis = Psych 1 - Affective and other psychoses, depression 22 Primary or Other Diagnosis = Psych 2 - Degenerative and other organic psychiatric disorders 23 Primary or Other Diagnosis = Pulmonary disorders OR M1850 (Transferring)= 2 or more OR VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00027 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.002</GPH> tkelley on DSK3SPTVN1PROD with RULES2 M1860 (Ambulation) = 4 or more 66058 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Episode number within sequence of adjacent episodes Therapy visits EQUATION: 1 or 2 013 I 1 or 2 3+ 2 013 3 14+ 3+ 14+ 4 24 Primary or Other Diagnosis = Pulmonary disorders AND M1860 (Ambulation) = 1 or more 25 Primary Diagnosis = Skin 1 -Traumatic wounds, bums, and post-operative complications 4 21 8 19 26 Other Diagnosis = Skin 1 - Traumatic wounds, bums, postoperative complications 6 15 7 15 27 Primary or Other Diagnosis = Skin 1 -Traumatic wounds, bums, and post-operative complications OR Skin 2 Ulcers other skin conditions and AND M1030 (Therapy at home) = 1 (IV/Infusion) or 2 (Parenteral) 4 tkelley on DSK3SPTVN1PROD with RULES2 VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4725 E:\FR\FM\06NOR2.SGM 2 17 8 17 4 19 19 4 11 14 18 6 18 15 2 4 3 8 4 7 1 4 5 19 33 13 18 7 6 2 4 11 2 6 06NOR2 7 1 4 7 12 8 10 6 5 3 13 16 26 22 18 14 11 3 3 11 2 3 5 ER06NO14.003</GPH> Primary or Other Diagnosis = Skin 2 - Ulcers and other skin conditions 29 Primary or Other Diagnosis = Tracheostomy 30 Primary or Other Diagnosis = Urostomy/Cystostomy M1030 (Therapy at home)= 1 (IV/Infusion) or 2 31 (Parenteral) M1030 (Therapy at home)= 3 (Enteral) 32 M1200 (Vision) = 1 or more 33 M1242 (Pain)= 3 or 4 34 35 M1308 =Two or more pressure ulcers at stage 3 or 4 36 M1324 (Most problematic pressure ulcer stage)= 1 or 2 37 M1324 (Most problematic pressure ulcer stage)= 3 or 4 38 M1334 (Stasis ulcer status)= 2 39 M1334 (Stasis ulcer status)= 3 40 M1342 (Surgical wound status)= 2 41 M1342 (Surgical wound status)= 3 M1400 (Dyspnea)= 2, 3, or 4 42 43 M1620 (Bowel Incontinence)= 2 to 5 44 M1630 (Ostomy)= 1 or 2 45 M2030 (Injectable Drug Use)= 0, 1, 2, or 3 FUNCTIONAL DIMENSION M1810 or M1820 (Dressing upper or lower body)= 1, 2, or 46 3 M1830 (Bathing)= 2 or more 47 28 1 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 66059 four-equation model, we are redefining the clinical and functional thresholds so that they would be reflective of the new points associated with the CY 2015 fourequation model. Specifically, after estimating the points for each of the variables and summing the clinical and functional points for each episode, we looked at the distribution of the clinical score and functional score, breaking the episodes into different steps. The categorizations for the steps are as follows: • Step 1: First and second episodes, 0–13 therapy visits. • Step 2.1: First and second episodes, 14–19 therapy visits. • Step 2.2: Third episodes and beyond, 14–19 therapy visits. • Step 3: Third episodes and beyond, 0–13 therapy visits. • Step 4: Episodes with 20+ therapy visits Similar to the methodology used in the CY 2008 refinements, we then divide the distribution of the clinical score for episodes within a step such that a third of episodes are classified as low clinical score, a third of episodes are classified as medium clinical score, and a third of episodes are classified as high clinical score. The same approach is then done looking at the functional score. It was not always possible to evenly divide the episodes within each step into thirds due to many episodes being clustered around one particular score.22 Also, we looked at the average resource use associated with each clinical and functional score and used that to guide where we placed our thresholds. We tried to group scores with similar average resource use within the same level (even if it meant that more or less than a third of episodes were placed within a level). The new thresholds, based off of the CY 2015 four-equation model, points are shown in Table 13. 22 For Step 1, 55% of episodes were in the medium functional level (All with score 15). For Step 2.1, 60.7% of episodes were in the low functional level (Most with score 3, some with score 0). For Step 2.2, 58.3% of episodes were in the low functional level (All with score 0). For Step 3, 52.1% of episodes were in the medium functional level (all with score 10). For Step 4, 41.7% of episodes were in the medium functional level (almost all with score 3). VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.004</GPH> tkelley on DSK3SPTVN1PROD with RULES2 In updating the four-equation model with 2013 data (the last update to the four-equation model used 2005 data), there were a number of changes to the point values for the variables in the four-equation model. These changes reflect the change in the relationship between the grouper variables and resource use since 2005. The CY 2015 four-equation model resulted in 124 point-giving variables being used in the model (as compared to the 164 variables for the 2012 recalibration). There were 21 variables that were added to the model and 63 variables that were dropped from the model due to the absence of additional resources associated with the variable. The points for 57 variables increased in the CY 2015 four-equation model and the points for 25 variables in decreased in the CY 2015 four-equation model. There were 17 variables with the same point values. Since there were a number of changes to the point values associated with the 66060 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Once the thresholds were determined and each episode was assigned a clinical and functional level, the payment regression was estimated with an episode’s wage-weighted minutes of care as the dependent variable. Independent variables in the model were indicators for the step of the episode as well as the clinical and functional levels within each step of the episode. Like the four-equation model, the payment regression model is also estimated with robust standard errors that are clustered at the beneficiary level. Table 14 shows the regression coefficients for the variables in the payment regression model updated with complete CY 2013 data. The R-squared value for the payment regression model is 0.4680 (an increase from 0.3769 for the CY 2012 recalibration). TABLE 14—PAYMENT REGRESSION MODEL New payment regression coefficients Variable description $24.36 61.06 81.65 121.95 56.47 177.00 26.09 91.13 91.83 206.75 6.22 88.98 11.00 89.06 50.88 86.69 74.96 241.95 35.12 91.41 447.08 456.36 ¥65.98 872.95 378.43 Source: CY 2013 Medicare claims data for episodes ending on or before December 31, 2013 (as of June 30, 2014) for which we had a linked OASIS assessment. The method used to derive the CY 2015 case-mix weights from the payment regression model coefficients is the same as the method used to derive VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 the CY 2012 case-mix weights. This method is described below. (1) We used the coefficients from the payment regression model to predict PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 each episode’s wage-weighted minutes of care (resource use). We then divided these predicted values by the mean of the dependent variable (that is, the E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.005</GPH> tkelley on DSK3SPTVN1PROD with RULES2 Step 1, Clinical Score Medium ............................................................................................................................................................ Step 1, Clinical Score High ................................................................................................................................................................. Step 1, Functional Score Medium ....................................................................................................................................................... Step 1, Functional Score High ............................................................................................................................................................ Step 2.1, Clinical Score Medium ......................................................................................................................................................... Step 2.1, Clinical Score High .............................................................................................................................................................. Step 2.1, Functional Score Medium .................................................................................................................................................... Step 2.1, Functional Score High ......................................................................................................................................................... Step 2.2, Clinical Score Medium ......................................................................................................................................................... Step 2.2, Clinical Score High .............................................................................................................................................................. Step 2.2, Functional Score Medium .................................................................................................................................................... Step 2.2, Functional Score High ......................................................................................................................................................... Step 3, Clinical Score Medium ............................................................................................................................................................ Step 3, Clinical Score High ................................................................................................................................................................. Step 3, Functional Score Medium ....................................................................................................................................................... Step 3, Functional Score High ............................................................................................................................................................ Step 4, Clinical Score Medium ............................................................................................................................................................ Step 4, Clinical Score High ................................................................................................................................................................. Step 4, Functional Score Medium ....................................................................................................................................................... Step 4, Functional Score High ............................................................................................................................................................ Step 2.1, 1st and 2nd Episodes, 14 to 19 Therapy Visits .................................................................................................................. Step 2.2, 3rd+ Episodes, 14 to 19 Therapy Visits .............................................................................................................................. Step 3, 3rd+ Episodes, 0–13 Therapy Visits ...................................................................................................................................... Step 4, All Episodes, 20+ Therapy Visits ............................................................................................................................................ Intercept ............................................................................................................................................................................................... Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 average wage-weighted minutes of care across all episodes used in the payment regression). This division constructs the weight for each episode, which is simply the ratio of the episode’s predicted wage-weighted minutes of care divided by the average wageweighted minutes of care in the sample. Each episode was then aggregated into one of the 153 home health resource groups (HHRGs) and the ‘‘raw’’ weight for each HHRG was calculated as the average of the episode weights within the HHRG. (2) The weights associated with 0 to 5 therapy visits were then increased by 3.75 percent, the weights associated with 14–15 therapy visits were decreased by 2.5 percent, and the weights associated with 20+ therapy visits were decreased by 5 percent. These adjustments to the case-mix weights are the same as the ones used VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 in the CY 2012 recalibration (76 FR 68557) and were done to address MedPAC’s concerns that the HH PPS overvalues therapy episodes and undervalues non-therapy episodes (March 2011 MedPAC Report to the Congress: Medicare Payment Policy, p. 176). These adjustments better aligned the case-mix weights with episode costs estimated from cost report data. (3) After the adjustments in step (2) were applied to the raw weights, the weights were further adjusted to create an increase in the payment weights for the therapy visit steps between the therapy thresholds. Weights with the same clinical severity level, functional severity level, and early/later episode status were grouped together. Then within those groups, the weights for each therapy step between thresholds were gradually increased. We did this by interpolating between the main PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 66061 thresholds on the model (from 0–5 to 14–15 therapy visits, and from 14–15 to 20+ therapy visits). We used a linear model to implement the interpolation so the payment weight increase for each step between the thresholds (such as the increase between 0–5 therapy visits and 6 therapy visits and the increase between 6 therapy visits and 7–9 therapy visits) was constant. This interpolation is the identical to the process finalized in the CY 2012 final rule (76 FR 68555). (4) The interpolated weights were then adjusted so that the average casemix for the weights was equal to 1.23 This last step creates the final CY 2015 case-mix weights shown in Table 15. 23 When computing the average, we compute a weighted average, assigning a value of one to each normal episode and a value equal to the episode length divided by 60 for PEPs. E:\FR\FM\06NOR2.SGM 06NOR2 66062 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations TABLE 15 : CY 2015 C ase-M" P aymen tW. hts IX e121 10111 10112 10113 10114 10115 10121 10122 10123 10124 10125 10131 10132 10133 10134 10135 10211 10212 10213 10214 10215 10221 10222 10223 10224 10225 10231 10232 10233 10234 10235 10311 10312 10313 10314 10315 10321 10322 VerDate Sep<11>2014 20:03 Nov 05, 2014 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, 1st and 2nd Episodes, Jkt 235001 PO 00000 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits Frm 00032 Fmt 4701 Sfmt 4725 CY 2015 Final Casemix Weights C1F1S1 C1F1S2 C1F1S3 C1F1S4 C1F1S5 C1F2S1 C1F2S2 C1F2S3 C1F2S4 C1F2S5 C1F3S1 C1F3S2 C1F3S3 C1F3S4 C1F3S5 C2F1S1 C2F1S2 C2FlS3 C2FlS4 C2F1S5 C2F2S1 C2F2S2 C2F2S3 C2F2S4 C2F2S5 C2F3S1 C2F3S2 C2F3S3 C2F3S4 C2F3S5 C3F1S1 C3F1S2 C3F1S3 C3F1S4 C3F1S5 C3F2S1 C3F2S2 0.5985 0.7242 0.8499 0.9756 1.1013 0.7277 0.8353 0.9429 1.0505 1.1581 0.7914 0.9056 1.0198 1.1340 1.2482 0.6370 0.7718 0.9066 1.0413 1.1761 0.7662 0.8829 0.9996 1.1163 1.2330 0.8299 0.9532 1.0765 1.1998 1.3230 0.6951 0.8541 1.0131 1.1720 1.3310 0.8242 0.9651 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.006</GPH> tkelley on DSK3SPTVN1PROD with RULES2 Payment Step (Episode and/or Therapy Visit Ranges) Group Clinical and Functional Levels (1 =Low; 2=Medium; 3= High) Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 10323 10324 10325 10331 10332 10333 10334 10335 21111 21112 21113 21121 21122 21123 21131 21132 21133 21211 21212 21213 21221 21222 21223 21231 21232 21233 21311 21312 21313 21321 21322 21323 21331 21332 21333 22111 22112 22113 VerDate Sep<11>2014 20:03 Nov 05, 2014 1st and 2nd Episodes, 7 to 9 Therapy Visits 1st and 2nd Episodes, 10 Therapy Visits 1st and 2nd Episodes, 11 to 13 Therapy Visits 1st and 2nd Episodes, 0 to 5 Therapy Visits 1st and 2nd Episodes, 6 Therapy Visits 1st and 2nd Episodes, 7 to 9 Therapy Visits 1st and 2nd Episodes, 10 Therapy Visits 1st and 2nd Episodes, 11 to 13 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 1st and 2nd Episodes, 14 to 15 Therapy Visits 1st and 2nd Episodes, 16 to 17 Therapy Visits 1st and 2nd Episodes, 18 to 19 Therapy Visits 3rd+ Episodes, 14 to 15 Therapy Visits 3rd+ Episodes, 16 to 17 Therapy Visits 3rd+ Episodes, 18 to 19 Therapy Visits Jkt 235001 PO 00000 Frm 00033 Fmt 4701 Sfmt 4725 CY 2015 Final Casemix Weights C3F2S3 C3F2S4 C3F2S5 C3F3S1 C3F3S2 C3F3S3 C3F3S4 C3F3S5 C1F1S1 C1F1S2 C1F1S3 C1F2S1 C1F2S2 C1F2S3 C1F3S1 C1F3S2 C1F3S3 C2F1S1 C2F1S2 C2F1S3 C2F2S1 C2F2S2 C2F2S3 C2F3S1 C2F3S2 C2F3S3 C3F1S1 C3F1S2 C3F1S3 C3F2S1 C3F2S2 C3F2S3 C3F3S1 C3F3S2 C3F3S3 C1F1S1 C1F1S2 C1F1S3 1.1061 1.2470 1.3879 0.8880 1.0355 1.1830 1.3305 1.4780 1.2270 1.4220 1.6171 1.2657 1.4649 1.6640 1.3624 1.5565 1.7506 1.3109 1.5142 1.7175 1.3497 1.5570 1.7643 1.4463 1.6486 1.8509 1.4900 1.7142 1.9384 1.5288 1.7570 1.9853 1.6255 1.8487 2.0718 1.2407 1.4312 1.6217 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.007</GPH> tkelley on DSK3SPTVN1PROD with RULES2 Payment Step (Episode and/or Therapy Visit Ranges) Group Clinical and Functional Levels (1 =Low; 2=Medium; 3= High) 66063 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 22121 22122 22123 22131 22132 22133 22211 22212 22213 22221 22222 22223 22231 22232 22233 22311 22312 22313 22321 22322 22323 22331 22332 22333 30111 30112 30113 30114 30115 30121 30122 30123 30124 30125 30131 30132 30133 30134 VerDate Sep<11>2014 20:03 Nov 05, 2014 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, 3rd+ Episodes, Jkt 235001 PO 00000 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 14 to 15 Therapy Visits 16 to 17 Therapy Visits 18 to 19 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits 11 to 13 Therapy Visits 0 to 5 Therapy Visits 6 Therapy Visits 7 to 9 Therapy Visits 10 Therapy Visits Frm 00034 Fmt 4701 Sfmt 4725 CY 2015 Final Casemix Weights C1F2S1 C1F2S2 C1F2S3 C1F3S1 C1F3S2 C1F3S3 C2F1S1 C2F1S2 C2F1S3 C2F2S1 C2F2S2 C2F2S3 C2F3S1 C2F3S2 C2F3S3 C3F1S1 C3F1S2 C3F1S3 C3F2S1 C3F2S2 C3F2S3 C3F3S1 C3F3S2 C3F3S3 C1F1S1 C1F1S2 C1F1S3 C1F1S4 C1F1S5 C1F2S1 C1F2S2 C1F2S3 C1F2S4 C1F2S5 C1F3S1 C1F3S2 C1F3S3 C1F3S4 Payment Step (Episode and/or Therapy Visit Ranges) Group Clinical and Functional Levels (1 =Low; 2=Medium; 3= High) 1.2500 1.4544 1.6587 1.3730 1.5635 1.7541 1.3772 1.5584 1.7396 1.3865 1.5815 1.7766 1.5095 1.6907 1.8720 1.5480 1.7529 1.9578 1.5573 1.7760 1.9948 1.6803 1.8852 2.0901 0.4942 0.6435 0.7928 0.9421 1.0914 0.5746 0.7097 0.8448 0.9798 1.1149 0.6313 0.7796 0.9280 1.0763 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.008</GPH> 66064 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations VerDate Sep<11>2014 20:03 Nov 05, 2014 3rd+ Episodes, 11 to 13 Therapy Visits 3rd+ Episodes, 0 to 5 Therapy Visits 3rd+ Episodes, 6 Therapy Visits 3rd+ Episodes, 7 to 9 Therapy Visits 3rd+ Episodes, 10 Therapy Visits 3rd+ Episodes, 11 to 13 Therapy Visits 3rd+ Episodes, 0 to 5 Therapy Visits 3rd+ Episodes, 6 Therapy Visits 3rd+ Episodes, 7 to 9 Therapy Visits 3rd+ Episodes, 10 Therapy Visits 3rd+ Episodes, 11 to 13 Therapy Visits 3rd+ Episodes, 0 to 5 Therapy Visits 3rd+ Episodes, 6 Therapy Visits 3rd+ Episodes, 7 to 9 Therapy Visits 3rd+ Episodes, 10 Therapy Visits 3rd+ Episodes, 11 to 13 Therapy Visits 3rd+ Episodes, 0 to 5 Therapy Visits 3rd+ Episodes, 6 Therapy Visits 3rd+ Episodes, 7 to 9 Therapy Visits 3rd+ Episodes, 10 Therapy Visits 3rd+ Episodes, 11 to 13 Therapy Visits 3rd+ Episodes, 0 to 5 Therapy Visits 3rd+ Episodes, 6 Therapy Visits 3rd+ Episodes, 7 to 9 Therapy Visits 3rd+ Episodes, 10 Therapy Visits 3rd+ Episodes, 11 to 13 Therapy Visits 3rd+ Episodes, 0 to 5 Therapy Visits 3rd+ Episodes, 6 Therapy Visits 3rd+ Episodes, 7 to 9 Therapy Visits 3rd+ Episodes, 10 Therapy Visits 3rd+ Episodes, 11 to 13 Therapy Visits All Episodes, 20+ Therapy Visits All Episodes, 20+ Therapy Visits All Episodes, 20+ Therapy Visits All Episodes, 20+ Therapy Visits All Episodes, 20+ Therapy Visits All Episodes, 20+ Therapy Visits All Episodes, 20+ Therapy Visits Jkt 235001 PO 00000 Frm 00035 Fmt 4701 Sfmt 4725 1.2246 0.5116 0.6847 0.8578 1.0310 1.2041 0.5920 0.7509 0.9098 1.0687 1.2276 0.6487 0.8208 0.9930 1.1652 1.3373 0.6350 0.8176 1.0002 1.1828 1.3654 0.7155 0.8839 1.0522 1.2206 1.3889 0.7721 0.9538 1.1354 1.3170 1.4987 1.8122 1.8631 1.9446 1.9208 1.9717 2.0532 2.1626 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.009</GPH> tkelley on DSK3SPTVN1PROD with RULES2 30135 30211 30212 30213 30214 30215 30221 30222 30223 30224 30225 30231 30232 30233 30234 30235 30311 30312 30313 30314 30315 30321 30322 30323 30324 30325 30331 30332 30333 30334 30335 40111 40121 40131 40211 40221 40231 40311 CY 2015 Final Casemix Weights C1F3S5 C2F1S1 C2F1S2 C2F1S3 C2F1S4 C2F1S5 C2F2S1 C2F2S2 C2F2S3 C2F2S4 C2F2S5 C2F3S1 C2F3S2 C2F3S3 C2F3S4 C2F3S5 C3F1S1 C3F1S2 C3F1S3 C3F1S4 C3F1S5 C3F2S1 C3F2S2 C3F2S3 C3F2S4 C3F2S5 C3F3S1 C3F3S2 C3F3S3 C3F3S4 C3F3S5 C1F1S1 C1F2S1 C1F3S1 C2F1S1 C2F2S1 C2F3S1 C3F1S1 Payment Step (Episode and/or Therapy Visit Ranges) Group Clinical and Functional Levels (1 =Low; 2=Medium; 3= High) 66065 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations To ensure the changes to the case-mix weights are implemented in a budget neutral manner, we proposed to apply a case-mix budget neutrality factor to the CY 2015 national, standardized 60-day episode payment rate (see section III.D.4. of this final rule). The case-mix budget neutrality factor is calculated as the ratio of total payments when CY 2015 case-mix weights are applied to CY 2013 utilization (claims) data to total payments when CY 2014 case-mix weights are applied to CY 2013 utilization data. This produces a final case-mix budget neutrality factor for CY 2015 of 1.0366, based on CY 2013 claims data as of June 30, 2014. The case-mix budget neutrality factor (1.0366) also takes into account the regrouping of episodes according to the point values from the four-equation model and new clinical and functional thresholds described in section III.C, which contributes 0.0090 to the casemix budget neutrality factor. Section 1895(b)(3)(B)(iv) of the Act gives us the authority to implement payment reductions for nominal casemix growth (that is, changes in case-mix that are not related to actual changes in patient characteristics over time). Previously, we accounted for nominal case-mix growth from 2000 to 2009 through case-mix reductions implemented from 2008 through 2013 (76 FR 68528–68543). In the CY 2013 HH PPS proposed rule, we stated that we found that 15.97 percent of the total case-mix change was real from 2000 to 2010 (77 FR 41553). In the CY 2014 HH PPS final rule, we used 2012 claims data to rebase payments (78 FR 72277). Since we were resetting the payment amounts with 2012 data, we did not take into account any additional nominal casemix growth. For the proposed rule, we examined case-mix growth from CY 2012 to CY 2013 using CY 2012 and preliminary CY 2013 claims data. For this final rule, in updating our analysis with CY 2013 claims data as of June 30, 2014, we estimate that case-mix increased by 2.76 percent between CY 2012 and CY 2013. In applying the VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 15.97 percent estimate of real case-mix growth to the total estimated case-mix growth from CY 2012 to CY 2013 (2.76 percent), we estimate that 2.32 percent (2.76–(2.76 * 0.1597)) of the case-mix growth is nominal (that is, case-mix growth that is unrelated to changes in patient acuity). We estimate that the case-mix budget neutrality factor of 1.0366 would have to be reduced to 1.0134 to account for nominal case-mix growth ((1.0366¥0.0276) + (0.0276*0.1597) = 1.0134). While we considered adjusting the case-mix budget neutrality factor to take into account the growth in nominal case-mix (2.32 percent), which would result in a case-mix budget neutrality adjustment of 1.0134 rather than 1.0366, we will apply the full 1.0366 case-mix budget neutrality factor to the national, standardized 60-day episode payment rate. We will continue to monitor casemix growth and may consider whether to propose nominal case-mix reductions in future rulemaking. The following is a summary of the comments and our responses to comments on the CY 2015 proposed case-mix weights and methodology: Comment: Commenters stated that CMS has not provided complete technical information on the nature and basis for the revisions to the case-mix weights and variables in the model and therefore, the recalibration of the weights cannot be sufficiently evaluated. Commenters stated that unlike previous recalibrations, CMS has not provided the technical report on the proposed recalibration of the weights and that CMS did not publish the data or the analysis used to support its conclusions. Commenters stated that a full technical report on the methodology and regression analysis would be valuable in understanding the reliability and validity of the recalibration and would allow stakeholders to conduct their own evaluations as well. A commenter recommended that CMS make all technical reports and analyses regarding the recalibration of the casemix weights publicly available PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 immediately in order to permit stakeholders to review the significant changes described in the proposed rule. Response: As stated in the CY 2015 proposed rule, the methodology used to recalibrate the weights is identical to the methodology used in the CY 2012 recalibration except for the minor exceptions noted in the proposed rule. We encourage commenters to refer to the CY 2012 proposed and final rule and the CY 2012 technical report on our home page at https://www.cms.gov/ Center/Provider-Type/Home-HealthAgency-HHA-Center.html for additional information about the recalibration methodology. Comment: Commenters stated that the recalibration of the high volume therapy episodes will lead to financial incentives to increase therapy visits even though CMS has indicated that therapy visit volume should have less impact on the weights. They stated that the changes to the proposed case-mix weights contradict what was said previously regarding undervalue of clinical elements and over-value of the therapy component. Commenters presented their analyses comparing the CY 2014 weights to the CY 2015 weights and payments associated with each of the HHRGs. Commenters stated that under the CY 2015 proposed case-mix weights, a majority of the HHRGs with low therapy visits will have losses and a large number of the high therapy groups and all of the 20+ therapy episodes will receive substantial increases to their weights. Commenters stated that these results seem to contradict the adjustment discussion in the CY 2015 proposed rule. Response: We note that the CY 2015 recalibration is based on 2013 claims data, which is six to eight years more current than the claims data used in the CY 2012 recalibration. The 2013 data also reflects the 2008 refinements to the HH PPS, which included the change from one therapy threshold to multiple therapy thresholds and the change from 80 HHRGs to 153 HHRGs. Given the time difference in the data used for the E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.010</GPH> tkelley on DSK3SPTVN1PROD with RULES2 66066 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations two recalibrations, one would expect differences in the resulting case-mix weights. However, comparing the CY 2015 proposed case-mix weights to the CY 2014 final weights; we observed that over 60% of normal episodes would have a case-mix weight change of 5 percent or less. Furthermore, few episodes have an increase in their casemix weight that exceeds 5 percent (14.2 percent) and very few episodes have an increase in their case-mix weight that exceeds 10 percent (0.4 percent). The changes in case-mix weights can be mostly attributed to shifts in utilization patterns between 2005/2007 and 2013. Over that six to eight year time period, we find a notable shift across all therapy groups away from the use of home health aides and a shift to either more nursing or more therapy care (see Tables 16 and 17 below). 66067 While some of the low therapy groups did add more skilled nursing visits, most of the therapy groups added more occupational therapy (OT) and speechlanguage pathology (SLP), which have substantially higher Bureau of Labor Statistics (BLS) average hourly wage values compared to skilled nursing ($39/hr for skilled nursing versus $55 for OT and $60 for SLP). TABLE 16—SUMMARY STATISTICS—EPISODES FROM 2013 [Only normal episodes] Therapy group Number of episodes Nursing Aides PT OT SLP MSS All therapy All visits 0–5 ........................................... 6 ............................................... 7–9 ........................................... 10 ............................................. 11–13 ....................................... 14–15 ....................................... 16–17 ....................................... 18–19 ....................................... 20+ ........................................... 2,951,379 224,325 664,911 184,871 532,875 249,627 267,500 173,769 328,295 8.9 6.0 6.5 6.8 7.1 7.3 6.5 7.0 8.1 2.1 1.3 1.5 1.7 2.0 2.4 2.5 2.6 3.5 0.6 5.2 6.9 8.5 10.0 11.6 13.5 13.8 14.9 0.1 0.6 0.9 1.3 1.7 2.4 2.5 4.0 7.9 0.0 0.1 0.2 0.2 0.3 0.4 0.4 0.6 1.9 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.7 6.0 7.9 10.0 12.0 14.5 16.4 18.4 24.8 11.8 13.3 16.0 18.6 21.2 24.3 25.6 28.2 36.6 Total .................................. 5,577,552 7.9 2.1 5.1 1.2 0.2 0.1 6.5 16.7 Source: Data on episodes with a through date in 2013 using complete CY 2013 claims data as of June 30, 2014. TABLE 17—SUMMARY STATISTICS—EPISODES FROM 2007 (FILE USED IN CY 2012 RECALIBRATION) [Only normal episodes] Therapy group Average number of visits for Normal episodes with a through date in 2007 0–5 ........................................... 6 ............................................... 7–9 ........................................... 10 ............................................. 11–13 ....................................... 14–15 ....................................... 16–17 ....................................... 18–19 ....................................... 20+ ........................................... Total .................................. Number of episodes Nursing 520,639 28,349 59,156 47,798 107,970 38,188 29,322 17,679 39,395 888,496 Aides 9.3 5.5 5.9 7.2 7.2 7.3 7.2 7.4 7.4 8.3 3.6 1.7 2.1 2.8 3.5 4.0 4.4 4.4 5.2 3.5 PT 0.6 5.3 6.9 8.9 10.5 12.1 13.6 14.4 16.3 4.7 OT SLP 0.1 0.6 0.9 1.0 1.2 2.1 2.5 3.5 7.1 0.9 MSS 0.0 0.1 0.1 0.1 0.1 0.3 0.4 0.5 1.5 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.1 All therapy All visits 0.7 6.0 7.9 10.0 11.9 14.5 16.5 18.4 24.9 5.7 13.7 13.4 16.1 20.1 22.7 25.9 28.4 30.5 37.9 17.7 tkelley on DSK3SPTVN1PROD with RULES2 Source: Data on episodes ending in 2007 using a 20% sample of 2007 data from the home health Datalink file. In addition, while the average number of total visits per episode has decreased overall, it decreased disproportionately more for the no/low therapy group (which constitute over 50 percent of all episodes) compared to the remaining groups (see Table 18 below). These utilization changes result in changes to the weights observed by the commenters, specifically, the decreases in the case-mix weights for the low or no therapy groups and increases in the case-mix weights for the high therapy groups. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 TABLE 18—PERCENT CHANGE IN THE AVERAGE NUMBER OF VISITS BY THERAPY GROUP, 2007 AND 2013 Percent change in visits from 2007 to 2013 Therapy group 0–5 ............................................ 6 ................................................ 7–9 ............................................ 10 .............................................. 11–13 ........................................ 14–15 ........................................ 16–17 ........................................ PO 00000 Frm 00037 Fmt 4701 TABLE 18—PERCENT CHANGE IN THE AVERAGE NUMBER OF VISITS BY THERAPY GROUP, 2007 AND 2013— Continued Sfmt 4700 ¥13.92 0.18 0.32 ¥7.38 ¥6.63 ¥6.14 ¥9.89 Therapy group 18–19 ........................................ 20+ ............................................ Percent change in visits from 2007 to 2013 ¥7.73 ¥3.46 We would like to clarify that the adjustments applied to the case-mix weights are not in addition to the E:\FR\FM\06NOR2.SGM 06NOR2 66068 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations adjustments applied in 2012, but rather are the same adjustments as the ones applied to the 2012 data. In other words, the 3.75 percent increases to the weights associated with 0 to 5 therapy visits, the 2.5 percent decreases to the weights associated with 14–19 therapy visits, and 5 percent decreases to the weights associated with 20+ therapy visits are applied to the raw weights resulting from 2013 claims data. We did not take the CY 2012 case-mix weights and further adjust them. Therefore, one should not expect to see higher weights for low or no therapy episodes and lower weights for high therapy episodes when comparing the CY 2015 proposed case-mix weights to the CY 2014 weights, which have the same relative values as the 2012 case-mix weights. We note that by removing the therapy indicator variables from the four equation model and moving away from the use of therapy visits in the model that the case-mix weights for high therapy groups were lower than what they would have been if the therapy indicator variables were included in the model. We also note that the final casemix weights for the highest therapy HHRGs (those groups of episodes with 20 or more therapy visits) slightly decreased when comparing the CY 2015 final case-mix weights, based on complete CY 2013 data as of June 30, 2014, to the CY 2015 proposed case-mix weights, based on preliminary CY 2013 data as of December 31, 2013. Comment: One commenter was supportive of the recalibration proposal and agreed that the proposed recalibration strikes an appropriate balance between discouraging inappropriate use of therapy while addressing concerns that non-therapy services are undervalued. Response: We thank the commenter for their support. Comment: A commenter stated that the increase in therapy visits was due to therapists providing clinically necessary skilled care, not due to manipulating the therapy reimbursement process. Another commenter questioned whether CMS utilized multiple years of OASIS data to consider the change in functional status of those patients who receive low numbers of therapy visits versus those receiving 20 or more therapy visits and if the change noted at both ends of the spectrum of therapy utilization are appropriately reflected in the recalibration effort. Another commenter stated that CMS’ proposed changes do not appear to be based on any reasoned consideration of why the visit time data is the way it is. Response: The case-mix weights are driven by the 2013 claims data with the same adjustments finalized in CY 2012 to better align payment for high and no/ low therapy episodes with cost. The proposed recalibration of the case-mix weights used the methodology proposed and finalized in CY 2012, with a few noted differences outlined above and in the CY 2015 HH PPS proposed rule. We did not set the weights based on what levels of services we thought were appropriate. Any changes in the casemix weights for CY 2015 are driven by utilization patterns observed in CY 2013 claims data. Comment: A commenter stated that the case-mix weights appear to decrease payments for third or later episodes of care. The commenter stated that many home health providers serve patients with multiple chronic conditions and that the patients often have significant medical issues. The commenter stated that reducing payments for such episodes of care will likely have an impact on how home health providers will treat patients with chronic conditions. The commenter asked for more clarifications regarding what practice or utilization changes we are trying to achieve and if we could explain if there are particular types of patients we believe should not be receiving third episodes of home health care and/or if there are certain patients who should receive a different approach to care that would be less costly than the care delivered at present. Response: We reiterate that CY 2015 the case-mix weights are reflective of the utilization patterns observed in the CY 2013 claims data. We have not manipulated the case-mix weights to encourage certain patterns of care for the third or later episodes. The case-mix weights are driven by the mix of services provided, the costs of services provided as determined by the BLS hourly rates, the length of the visits, and the number of visits provided. Any decreases in the case-mix weights for third or later episodes of care reflect less average resources associated with those episodes using 2013 claims data than the average resources associated with third and later episodes using 2007 data, which was the data used in the 2012 recalibration. We note that when comparing the visit distribution in 2013 versus 2007 for third and later episodes, we observe large decreases in the total visit count in 2013 versus 2007 for these episodes (see Table 19 and Table 20). As shown in Table 21, the number of total visits for the third and later episodes, on average, decreased significantly, ranging from ¥8.30 percent to ¥19.01 percent, for the various therapy groups. The decreases in the case-mix weights for third or later episode episodes for CY 2015 versus CY 2014 may be due to the decrease in total visits for these episodes between 2007 and 2013. TABLE 19—AVERAGE NUMBER OF VISITS FOR THIRD AND LATER EPISODES OF CARE (NOT INCLUDING 20+ THERAPY VISIT EPISODES WHICH MAY BE EARLY OR LATE), CY 2013 tkelley on DSK3SPTVN1PROD with RULES2 Therapy group Number of episodes Nursing Aides PT OT SLP MSS All therapy All visits 0–5 ........................................... 6 ............................................... 7–9 ........................................... 10 ............................................. 11–13 ....................................... 14–15 ....................................... 16–17 ....................................... 18–19 ....................................... 1,424,148 38,406 125,743 37,482 120,115 68,540 77,730 41,557 9.2 7.8 8.2 8.4 8.4 8.3 7.2 7.6 3.2 2.6 2.9 2.9 3.2 3.5 3.6 3.6 0.2 4.9 6.7 8.5 10.2 12.1 13.9 14.2 0.0 0.8 1.0 1.2 1.5 1.9 2.0 3.5 0.0 0.2 0.3 0.3 0.3 0.5 0.4 0.6 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.3 6.0 7.9 10.0 12.0 14.5 16.4 18.3 12.7 16.5 19.1 21.4 23.7 26.3 27.3 29.7 Total .................................. 1,933,721 8.9 3.2 2.8 0.5 0.1 0.1 3.3 15.5 Source: Data on normal episodes of care with a through date in 2013 using complete CY 2013 claims data as of June 30, 2014. VerDate Sep<11>2014 20:42 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 66069 TABLE 20—AVERAGE NUMBER OF VISITS FOR THIRD AND LATER EPISODES OF CARE (NOT INCLUDING 20+ THERAPY VISIT EPISODES WHICH MAY BE EARLY OR LATE), CY 2007 Therapy group Number of episodes Nursing Aides PT OT SLP MSS All therapy All visits 0–5 ........................................... 6 ............................................... 7–9 ........................................... 10 ............................................. 11–13 ....................................... 14–15 ....................................... 16–17 ....................................... 18–19 ....................................... 227,934 3,068 7,458 9,510 21,620 7,736 6,481 2,982 9.6 7.7 8.1 9.0 9.0 8.6 8.2 8.8 5.9 4.1 4.6 5.2 5.8 6.4 7.0 6.7 0.2 5.0 6.7 8.7 10.4 12.4 14.1 14.9 0.0 0.8 1.1 1.1 1.3 1.8 1.9 3.0 0.0 0.2 0.2 0.2 0.2 0.3 0.4 0.5 0.1 0.1 0.2 0.1 0.1 0.1 0.1 0.2 0.2 6.0 8.0 10.0 11.9 14.5 16.5 18.4 15.7 18.0 20.8 24.3 26.8 29.6 31.8 34.0 Total .................................. 292,873 9.4 5.9 2.6 0.4 0.1 0.1 3.1 18.4 Source: Data on normal episodes of care ending in 2007 using a 20% sample of 2007 data from the home health Datalink file. TABLE 21—PERCENT CHANGE IN THE AVERAGE NUMBER OF VISITS BY THERAPY GROUP FOR THIRD AND LATER EPISODES OF CARE, 2007 AND 2013 Therapy group tkelley on DSK3SPTVN1PROD with RULES2 0–5 ............................................ 6 ................................................ 7–9 ............................................ 10 .............................................. 11–13 ........................................ 14–15 ........................................ 16–17 ........................................ 18–19 ........................................ Percent change in visits from 2007 to 2013 ¥19.01 ¥8.38 ¥8.30 ¥11.75 ¥11.44 ¥11.28 ¥14.18 ¥12.72 Comment: A commenter stated that the points for the case-mix variables seem to be decreasing for the low therapy episodes and increasing for the high therapy episodes, motivating agencies to provide more therapy visits to boost reimbursement. The commenter stated that the data used to determine the case-mix points was swayed by the payment system which rewards high therapy utilization. Other commenters stated that many diagnosis codes are losing case-mix points and that there doesn’t seem to be a reason behind the loss of points. Another commenter implied that there doesn’t seem to be a balance in the shift in points and was concerned with the impact of the scoring variables being eliminated and others decreasing or increasing points. Another commenter stated that there is not sufficient detail to explain the Agency’s rationale for the large scale changes to the case-mix point values in the proposed rule and questioned what message CMS is sending to agencies based on the changes to the case-mix variable table. The commenter stated that there is no longer an emphasis on diabetes, heart failure, COPD, or depression, but that there seems to be an emphasis on orthopedic and VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 neurological diagnoses, particularly when 14 or more therapy visits are ordered. A commenter stated that the change in the case-mix points sends a message that there is little or no benefit to home health agencies in caring for chronically ill patients with common medical diagnoses unless those patients are receiving 14 or more therapy visits and urged CMS to reconsider adoption and implementation of the proposed case-mix point tables and new thresholds until CMS has sought more input from clinicians and agencies and has re-evaluated the messages the new case-mix table will send to the home health community. Response: We reiterate that the points for the case-mix variables are driven by the utilization patterns observed in the CY 2013 claims data. The changes to the weights are not surprising given the different data used for the CY 2012 recalibration versus the data used for the CY 2015 recalibration. We used 2005 data to estimate the four equation model for the CY 2012 recalibration and we used 2013 data to estimate the four equation model for the CY 2015 recalibration. (The 2012 payment regression was based on a 2007 sample that was assigned to severity levels based on the point values from a 4equation model using 2005 data that eliminated certain hypertension codes). The different point estimates across the two models indicate that the case-mix variables have a different relationship to resource use in 2013 compared to 2005. A decrease in the number of points (for 2013 compared to 2005) for a variable means that the variable is associated with less resource use on average in 2013 compared to 2005. An increase in the number of points for a variable means that the variable is associated with more resource use on average in 2013 compared to 2005. Certain variables did drop out of the 4-equation model in in the CY 2015 recalibration versus the CY 2012 recalibration. For PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 many of those variables, the CY 2012 recalibration estimated only a small number of points associated with the variables and therefore those variables were already on the verge of being dropped from the model in CY 2012. While some variables did drop out of the model, the potential change in points associated with those variables was not very large, so that individually those variables had minimal impact on episodes’ resource use. Some of the variables that dropped out of the model experienced increases in the number of episodes with the variable reported on OASIS between 2005 and 2013. The increase in episodes reporting a particular variable may have decreased the difference in resources for episodes that coded the variable versus those that did not and, therefore, may have caused the variable to become insignificant or to have minimal impact on resource costs, leading to its elimination from the model. When evaluating the points associated with each leg of the model, it is important to examine the thresholds for each leg. For example, the clinical thresholds described in the proposed rule have fewer points associated with them for the 0 to 13 therapy visit episodes. Therefore, while there may be fewer points associated with some of the variables within the 0 to 13 therapy visit legs, there is also a lower threshold for the clinical levels. In order to determine the thresholds, we put episodes into five groups (early episodes, 0 to 13 therapy visits, early episodes, 14–19 therapy visits, late episodes, 0 to 13 therapy visits, late episodes, 14–19 therapy visits, and 20+ therapy visit episodes) for both the clinical and the functional dimensions. We then attempt to divide the episodes within each group into thirds in order to set the thresholds. Therefore, regardless of the points, on average, the most resource-intensive episodes will be placed in the highest clinical or functional level. It is also E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66070 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations worth noting that, with the CY 2015 recalibration, additional variables received points in the estimation of the 4-equation model that did not receive points in the CY 2012 recalibration. Again, the outcomes of the models are guided by the data and reflect recent (2013) utilization patterns. This approach increases payments for the HHRGs where resources are being provided where they were not previously and decreases payment for the HHRGs where resources are not being provided where they were previously. The intent is to create payments that more accurately reflect the costs that agencies incur. Comment: A commenter also stated that this is the third year in a row that the HH PPS has had different case-mix weights and that this may be an indicator of uncertainty by CMS. Another commenter stated that the recalibration of the weights is being recommended after having just recently been changed the prior year and that there is no consistency in the change. Response: We would like to clarify that fundamentally we have not changed the weights since CY 2012. We previously recalibrated the case-mix weights in 2012 and did not change the weights in CY 2013. For CY 2014, while we lowered the case-mix weights to an average case-mix weight of 1.0000, we did not adjust the weights relative to one another. We instead decreased each case-mix weight by the same factor (1.3464). In the CY 2015 proposed rule, we proposed to recalibrate the case-mix weights with more current data, adjusting the weights relative to one another. To the greatest extent possible, we are attempting to use recent data to calibrate the payment models to ensure payments accurately reflect current resource use in home health episodes. Comment: A commenter found the data CMS is basing its proposals on to be puzzling and mentioned that the payment system does not allow for reporting of time devoted to patient care that is not visit time. The commenter stated that dementia and brain disorders involve significant time outside of the visit. Response: Section 1861(m) of the Act defines home health services as ‘‘items and services furnished to an individual [. . .] provided on a visiting basis in a place of residence used as such individual’s home . . .’’ (emphasis added). Under certain circumstances, services may be provided via a telecommunications system, but these services do not substitute for in-person home health services and are not considered a home health visit for purposes of home health eligibility or VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 payment (see section 1895(e)(1) of the Act). In addition, the commenter provided no supporting data explaining why home health services for patients suffering from dementia and brain disorders would require reimbursement exceeding the typical case management/ care coordination functions that are inherent in managing patients in the home. We also note that while the casemix recalibration does not include time outside of the visit, the base rate should capture other expenses related to patient care, such as travel costs, etc. An assumption since the original development of the HH PPS, supported by internal studies of cost report data, has been that visit time is approximately proportional to the total cost of caring for a patient during an episode. Comment: Commenters expressed concerns with the effects the recalibrated weights will have when coupled with the rebasing reductions. A commenter stated that the combination of the recalibrated case-mix weights and the change in base rate brings about the equivalent of about a three point reduction in payments. A commenter stated that it makes sense to update case-mix points when statistical analyses warrant it but that it seems that most adjustments in recent years were done to reduce payments to home health agencies. A commenter stated that the changes in the case-mix points and thresholds for scoring the episode constitute a further reduction in payment beyond the required reduction and recalibration of the case-mix weights for CY 2015. Response: The CY 2015 case-mix recalibration is done in a budget neutral manner. While we recalibrated the CY 2015 case-mix weights to an average case-mix weight of 1.00, we also proposed an increase to the base rate of 2.37 percent in order to ensure that there are no changes in aggregate payments due to the recalibration. The weights are only changing relative to one another and do not result in an overall reduction in HH PPS payments due to the recalibration of the case-mix weights. Comment: A commenter stated that case-mix weights are continuing to be recalibrated to 1.000 but that many payments to home health do not result in the episodic payment including Partial Episode Payments, payments for low utilization payment adjustment episodes, outliers, and others. Response: We believe the commenter is implying that the case-mix recalibration is not budget neutral given that LUPA, outlier episodes, etc. are not included in the case-mix weight recalibration. We note the LUPA PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 episodes are paid on a per-visit basis and are not paid using the case-mix weights. Therefore, they were not included when performing the recalibration. We note that all episodes, including partial episode payment episodes and outlier episodes, are included when calculating the budget neutrality factor in order to ensure that total payments would be the same when comparing the CY 2015 weights to the CY 2014 weights. However, outliers are not included in the data when doing the case-mix recalibration because outlier episodes contain utilization patterns that are atypical. The outliers’ utilization presumably reflects unusually high patient need for services that is not easily predictable in statistical data. In addition, due to the concentration of outlier episodes in suspect billing areas, we question some of the utilization data for outlier episodes. We would also like to note that outlier episodes receive additional payment when the imputed cost exceeds a certain threshold and therefore, receive additional payment outside of the case-mix system. Comment: A commenter stated that the R-squared value of the payment regression model has increased from the 2012 payment regression model even though variables were dropped from the four-equation model. The commenter stated that less variables in the fourequation model should weaken the Rsquared value. Response: We do note that while the R-squared value for the payment regression increased for the CY 2015 payment regression model when compared to the CY 2012 payment regression model, the R-squared value for the CY 2015 four-equation model did decrease when compared to the Rsquared value for the CY 2012 fourequation model, from 0.462 to 0.427. However, we point out that for the CY 2015 four-equation model and payment regression model, we used 2013 data. For the CY 2012 four-equation model, we used 2005 data and for the CY 2012 payment regression model, we used data from 2007. R-squared values will change depending on what data are used and cannot be directly compared. Comment: Commenters supported the idea of recalibrating the weights with newer data but expressed concerns with the resulting proposed weights. Commenters stated their concerns with the continued use of therapy thresholds in the case-mix system. Commenters recommended that the therapy thresholds be eliminated from the payment system and that home health services be paid solely based on patient characteristics. A commenter stated that E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations though CMS has made efforts to reduce payments for therapy episodes, the incentives of the therapy thresholds, with more visits receiving higher payments, still remain in effect. The commenter stated that the adjustments to the case-mix weights would not be necessary if the therapy thresholds were eliminated. Response: We recognize the issues around the use of the therapy thresholds and the use of therapy utilization in the payment system. We are currently looking into findings of the home health study authorized by section 3131(d) of the Affordable Care Act and payment reform options, including alternate ways to explain the amount of therapy resources without using therapy utilization variables. Further research is needed to find alternatives that will compensate for some of the loss of the explanatory power associated with the removal of the therapy utilization variables. Comment: Several commenters were concerned about the implications for agencies of adjusting to several successive recalibrations. Commenters said recalibrations cause instability for HHAs, with one saying recalibrations were inconsistent with one another. A commenter was concerned that multiple recalibrations make calculations with the case mix weights useless as a comparative tool over time. This commenter also cited problems with calculations from including therapy utilization and by the constant annual revision to the various OASIS items or diagnoses included/excluded. Response: We note that other postacute payment systems, such as the inpatient rehabilitation facility PPS and acute inpatient PPS, recalibrate their case-mix weights annually. The differences in the recalibration results for the CY 2012 recalibration and the CY 2015 recalibration largely result from the six to eight year difference in the data used. We expect future annual recalibrations to have less significant changes in the case-mix points and values. With regard to the use of therapy utilization in our methodology, as stated in our response above, we are looking into alternate ways to explain the amount of therapy resources. Since the 2008 refinements, there have been no changes to the payment items on the OASIS. In addition, besides last year’s changes to the ICD–9–CM codes included into the case-mix system (effective January 1, 2014 and therefore not reflected in the CY 2013 data used to recalibration the CY 2015 case-mix weights) and the removal of the hypertension codes in 2012, we did not make significant changes to the VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 diagnoses included or excluded in the case-mix system. We also note in 2013, changes in the rules for using the payment diagnosis field were simulated and the simulations showed impacts in payment of less than one percent. Comment: A commenter stated that to the extent that CMS is pursuing the adjustments to the weights for 2015, the agency should analyze the payment-tocost ratios for the proposed payment weights before and after the manual adjustment, similar to the analysis conducted during the CY 2012 recalibration. The commenter stated that this additional analysis would allow CMS to assess whether these adjustments equalize the financial incentives for therapy and non-therapy episodes. Another commenter urged CMS to adjust the CY 2015 case-mix weights to ensure appropriate use of therapy visits and move reimbursement for therapy-based episodes towards actual costs incurred. Commenters recommended that CMS conduct a thorough validation review of the proposed case-mix weight recalibration and evaluate the potential impact on utilization, spending, access to care, and other relevant matters. Other commenters urged CMS to re-examine the case-mix recalibration and refine it to control for variables that might skew outcomes and ensure that the end result does not create rewards for high therapy resource use that may be inappropriate. A commenter suggested that CMS revisit the case-mix weight recalibration to accomplish its stated intention or alternatively provide a detailed explanation how the recalibrated casemix weights are consistent with its intent. The commenter also stated that there has been no testing to determine whether the adjustments will achieve the desired outcomes. The commenter recommended that CMS retain the current case-mix weights until an approach to recalibration that actually achieves the desired outcomes can be developed and tested. The commenter stated that the changes to the payment system don’t seem to have achieved the desired impact. Response: We performed an analysis of the payment-to-cost ratio for episodes with varying levels of therapy visits. This analysis used cost report data to estimate episode cost and showed that the payment to cost ratios across the varying levels of therapy visits for the recalibrated weights were similar to the payment to cost ratios for the current weights. The analysis also justified the need for the continued adjustments (finalized in CY 2012) to be applied to the raw weights to lower the case-mix weights for high therapy episodes. The PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 66071 payment-to-cost ratios across the individual therapy visits were all relatively similar to each other, with some exceptions in the tails of the distribution, and indicated that there may not be a strong incentive to provide unnecessary amounts of therapy visits. The goal of the recalibration is to better align payment with current costs and we believe the recalibration achieves this. Comment: Commenters expressed their support for CMS’ decision to apply a full case-mix budget neutrality factor rather than a reduced case-mix budget neutrality factor which would take into account nominal case-mix growth. However, they expressed concern about the uncertainty for providers in planning for projected rates in CY 2015 and beyond given the possibility of case-mix reductions in the future. Commenters urged CMS to closely collaborate with the industry and stakeholders to ensure that the appropriate analysis is conducted in evaluating case-mix growth before proposing case-mix reductions in the future. Another commenter suggested that CMS perform a comprehensive study of individual patient clinical records before asserting that case-mix growth has occurred by anything other than necessary clinical care being provided. Another commenter urged CMS to use their enforcement authority to conduct targeted claims reviews and deny payment for claims where the case-mix weight is not supported by the plan of care rather than cut the national standardized episode rate for all agencies. Yet another commenter stated that case-mix change should not be measured using 1999 data as a baseline and that HHAs are providing better care for a more needy clinical population. Other commenters questioned the methodology used to determine real and nominal case-mix. Response: While we appreciate the commenters’ suggestion about the clinical record review, we note that our resources are not sufficient to conduct a review of patient records and/or claims on a scale that would be required to counteract the broad-based uptrend in case-mix weights; therefore, we cannot perform the review as suggested. However, we note that the MACs, in conjunction with supplemental review contractors, perform medical review of claims. When they perform medical review, they review the plan of care and OASIS and make adjustments to HHRGs if they deem that the documentation is not sufficient to support what was billed by the agency. Furthermore, we note that our statistical methods using available administrative data are E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66072 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations feasible and sufficiently reliable to utilize for the purpose of case-mix reductions. With regard to the comments about patient severity, as stated in the CY 2012 proposed rule, a detailed analysis of Medicare Expenditure Panel Survey (MEPS) data (which is independent of our real case-mix model) was performed to examine the severity of the Medicare home health population. The trends in health status from 2000 to 2008 were analyzed. The analysis showed a slight increase in the overall health status of the Medicare home health population, and in particular, the percent of home health Medicare beneficiaries experiencing ‘‘extreme’’ or ‘‘quite a bit’’ of work-limiting pain decreased substantially, from 56.6 percent in 2000 to 45.4 percent in 2008 (p = 0.039). While we recognize that there are some limitations to this analysis, we conclude that the results of this analysis provide no evidence of an increase in patient severity from 2000 to 2008. In addition, we would like to note that during the CY 2012 rulemaking, we incorporated HCC data, which is used by CMS to risk-adjust payments to managed care organization in the Medicare program, in our model to assess real case-mix growth. Our findings of real and nominal case-mix growth, even when incorporating HCC data, were consistent with past results. Most of the case-mix change was identified as nominal case-mix change. We will continue to solicit suggestions for other data that can be incorporated into our analysis of real and nominal growth and solicit suggestions on possible ways to improve our models. We plan to continue to monitor real and nominal case-mix growth and may propose additional case-mix reductions as necessary. Comment: One commenter stated that CMS has adjusted payments in 2008 to 2013 based on an analysis of changes in coding not related to changes in patient severity, but that CMS has not proposed a coding adjustment for 2015. The commenter stated that given the history of coding increases not attributable to severity, CMS should analyze the nominal case-mix change in the reported average case-mix for more recent years and implement additional payment reductions as warranted. Response: We agree and we will continue to monitor nominal case-mix growth and propose case-mix adjustments, as necessary. We also note that annually recalibrating (and normalizing the weights to 1.00) may minimize nominal case-mix growth in future years. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 Comment: Another commenter stated that CMS should address and eliminate fraudulent activities in a targeted manner that does not burden the whole industry for the actions of a small number of bad actors. The commenter stated that CMS should target bad actors rather than continue to implement across the board reductions that could reduce the number and quality of home health providers. Response: For a variety of reasons, as we have noted in previous regulations, we have not proposed targeted reductions for nominal case-mix change. Many agencies have small patient populations, which would make it practically impossible to reliably measure nominal case-mix change at the agency level. Further, we believe changes and improvements in coding practices have been widespread, making it difficult to clearly categorize agencies into high and low coding-change groups. As discussed in the CY 2012 final rule, when performing an independent review of our case-mix measurement methodology, Dr. David Grabowski and his team at Harvard University agreed with our reasons for not proposing targeted reductions, stating their concerns about the small sample size of many agencies and their findings of significant nominal case-mix increases across different classes of agencies. We note that although we have stated in past regulations that a targeted system would be administratively burdensome, the reasons we have just presented go beyond administrative complexity. We do not agree that agency-specific case-mix levels can precisely differentiate agencies with inappropriate coding practices from other agencies that are coding appropriately. System wide, case-mix levels have risen over time while data on patient characteristics indicate little change in patient severity over time. That is, the main problem is not the level of case-mix reached over a period of time, but the amount of change in the billed case-mix not attributable to underlying changes in actual patient severity. We will continue to monitor nominal case-mix growth and determine whether case-mix reductions are needed. Comment: Commenters questioned why CMS has not expanded the recalibration analysis to include additional variables that impact the cost of home health services to Medicare beneficiaries, such as those examined in the home health study and associated with low-income beneficiaries, beneficiaries in medically underserved areas, and those with varying levels of PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 severity of illness. Commenters urged CMS to incorporate findings from the access study into the case-mix system for CY 2015. A commenter expressed disappointment that CMS continued to rely on the current case-mix system rather than testing and implementing new models. The commenter stated that the current case-mix system and proposed adjustments have reached a level of complexity that make it challenging to determine the accuracy of the proposed technical refinements. The commenter stated that the inaccuracies in the current system, resulting from the limitations of the current OASIS variables and the use of average costs that do not represent the full costs of treating more complex patients, continue to result in underpayment for patients whose resource use and cost of care are not fully captured in the casemix weights. Another commenter suggested that CMS work with the industry to develop the case-mix methodology. Response: We are currently doing follow-on work to the home health study to explore findings and recommendations from the home health study on access to care for vulnerable populations. Under this contract, we are also exploring payment reform options to better capture costs associated with the various types of home health patients. However, the project is in its preliminary stages and will take some time to complete. We plan to provide updates on the follow on study and payment reform work in future rulemaking and plan to consult with stakeholders once further progress has been made. Comment: While outside the scope of the rule, some commenters provided suggestions for our payment reform work. Response: We thank the commenter for their input. We will take their comments into consideration for our payment reform work. Final Decision: We are finalizing the points for the case-mix variables, the revised thresholds for the clinical and functional levels, and the case-mix weights for CY 2015 shown in the tables above. We are also finalizing our proposal to recalibrate the case-mix weights every year with more current data. We will continue to monitor casemix growth and may consider whether to propose nominal case-mix reductions in future rulemaking. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 D. CY 2015 Home Health Rate Update 1. CY 2015 Home Health Market Basket Update Section 1895(b)(3)(B) of the Act requires that the standard prospective payment amounts for CY 2015 be increased by a factor equal to the applicable HH market basket update for those HHAs that submit quality data as required by the Secretary. The home health market basket percentage increase for CY 2015 is based on IHS Global Insight Inc.’s (IGI) third quarter 2014 forecast with historical data through the second quarter of 2014. The home health market basket percentage increase for CY 2015 is 2.6 percent. The HH market basket was rebased and revised in CY 2013. A detailed description of how we derive the HH market basket is available in the CY 2013 HH PPS final rule (77 FR 67080, 67090). For CY 2015, section 3401(e) of the Affordable Care Act, requires that, in CY 2015 (and in subsequent calendar years), the market basket percentage under the HH prospective payment system as described in section 1895(b)(3)(B) of the Act be annually adjusted by changes in economy-wide productivity. The statute defines the productivity adjustment, described in section 1886(d)(3)(B)(xi)(II) of the Act, to be equal to the 10-year moving average of change in annual economywide private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10year period ending with the applicable fiscal year, calendar year, cost reporting period, or other annual period)(the ‘‘MFP adjustment’’). The Bureau of Labor Statistics (BLS) is the agency that publishes the official measure of private nonfarm business MFP. Please see https://www.bls.gov/mfp to obtain the BLS historical published MFP data. We note that the proposed methodology for calculating and applying the MFP adjustment to the HHA payment update is similar to the methodology used in other Medicare provider payment systems as required by section 3401 of the Affordable Care Act. Please refer to the CY 2015 HH PPS proposed rule (79 FR 38384 through 38386) for more detailed information regarding the computation of the MFP adjustment. We did not receive any comments on our proposal related to the computation of the statutorily-required productivity adjustment. Therefore, we are finalizing our proposal to adjust the HH market basket percentage increase by the MFP adjustment as discussed in the proposed rule. The CY 2015 HH market basket percentage of 2.6 percent will be VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 reduced by the MFP adjustment (the 10year moving average of MFP for the period ending December 31, 2015) of 0.5 percent, which is based on IGI’s third quarter 2014 forecast. The resulting MFP-adjusted HH market basket update is equal to 2.1 percent, or 2.6 percent less 0.5 percentage point. Section 1895(b)(3)(B) of the Act requires that the home health market basket percentage increase be decreased by 2 percentage points for those HHAs that do not submit quality data as required by the Secretary. For HHAs that do not submit the required quality data for CY 2015, the home health market basket update will be 0.1 percent (2.1 percent minus 2.0 percentage points). 2. Home Health Care Quality Reporting Program (HH QRP) a. General Considerations Used for Selection of Quality Measures for the HH QRP The successful development of the Home Health Quality Reporting Program (HH QRP) that promotes the delivery of high quality healthcare services is one of our paramount concerns in administering the home health program. We seek to adopt measures for the HH QRP that promote more efficient and safer care. Our measure selection activities for the HH QRP take into consideration input we receive from the Measure Applications Partnership (MAP), convened by the National Quality Forum (NQF) as part of a prerulemaking process that we have established and are required to follow under section 1890A of the Act. The MAP is a public-private partnership comprised of multi-stakeholder groups convened for the primary purpose of providing input to CMS on the selection of certain categories of quality and efficiency measures, as required by section 1890A(a)(3) of the Act. By February 1st of each year, the NQF must provide that input to CMS. More details about the pre-rulemaking process can be found at https:// www.qualityforum.org/map. MAP reports to view and download are available at https:// www.qualityforum.org/Setting_ Priorities/Partnership/MAP_Final_ Reports.aspx. Our measure development and selection activities for the HH QRP take into account national priorities, such as those established by the National Priorities Partnership (https:// www.qualityforum.org/Setting_ Priorities/NPP/National_Priorities_ Partnership.aspx), the Department of Health & Human Services (HHS) PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 66073 Strategic Plan (https://www.hhs.gov/ secretary/about/priorities/ priorities.html, the National Quality Strategy (NQS) (https://www.ahrq.gov/ workingforquality/reports.htm), and the CMS Quality Strategy (https:// www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/QualityInitiativesGenInfo/ CMS-Quality-Strategy.html). To the extent practicable, we have sought to adopt measures that have been endorsed by the national consensus organization under contract to endorse standardized healthcare quality measures under section 1890 of the Act, recommended by multi-stakeholder organizations, and developed with the input of patients, providers, purchasers/payers, and other stakeholders. At this time, the NQF is the national consensus organization that is under contract with HHS to provide review and endorsement of quality measures. b. Background and Quality Reporting Requirements Section 1895(b)(3)(B)(v)(II) of the Act states that ‘‘each home health agency shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this clause.’’ In addition, section 1895(b)(3)(B)(v)(I) of the Act states that ‘‘for 2007 and each subsequent year, in the case of a home health agency that does not submit data to the Secretary in accordance with subclause (II) with respect to such a year, the home health market basket percentage increase applicable under such clause for such year shall be reduced by 2 percentage points.’’ This requirement has been codified in regulations at § 484.225(i). HHAs that meet the quality data reporting requirements are eligible for the full home health (HH) market basket percentage increase. HHAs that do not meet the reporting requirements are subject to a 2 percentage point reduction to the HH market basket increase. Section 1895(b)(3)(B)(v)(III) of the Act further states that ‘‘[t]he Secretary shall establish procedures for making data submitted under subclause (II) available to the public. Such procedures shall ensure that a home health agency has the opportunity to review the data that is to be made public with respect to the agency prior to such data being made public.’’ Medicare home health regulations, as codified at § 484.250(a), require HHAs to submit OASIS assessments and Home Health Care Consumer Assessment of E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66074 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Healthcare Providers and Systems Survey® (HHCAHPS) data to meet the quality reporting requirements of section 1895(b)(3)(B)(v) of the Act. We provide quality measure data to HHAs via the Certification and Survey Provider Enhanced Reports (CASPER reports) which are available on the CMS Health Care Quality Improvement System (QIES). A subset of the HH quality measures has been publicly reported on the Home Health Compare (HH Compare) Web site since 2003. The CY 2012 HH PPS final rule (76 FR 68576), identifies the current HH QRP measures. The selected measures that are made available to the public can be viewed on the HH Compare Web site located at https://www.medicare.gov/ HHCompare/Home.asp. As stated in the CY 2012 and CY 2013 HH PPS final rules (76 FR 68575 and 77 FR 67093, respectively), we finalized that we will also use measures derived from Medicare claims data to measure HH quality. In the CY 2014 HH PPS final rule, we finalized a proposal to add two claimsbased measures to the HH QRP, and also stated that we would begin reporting the data from these measures to HHAs beginning in CY 2014. These claims based measures are: (1) Rehospitalization during the first 30 days of HH; and (2) Emergency Department Use without Hospital Readmission during the first 30 days of HH. Also in this rule, we finalized our proposal to reduce the number of process measures reported on the CASPER reports by eliminating the stratification by episode length for 9 process measures. While no timeframe was given for the removal of these measures, we have scheduled their removal from the CASPER folders in October 2014. In addition, five short stay measures which had previously been reported on HH Compare were recently removed from public reporting and replaced with non-stratified ‘‘all episodes of care’’ versions of these measures. Comment: One commenter urged CMS to only adopt quality measures that have been endorsed by the Measure Applications Partnership (MAP) and National Quality Forum (NQF). Response: To the extent practicable, we seek to adopt measures that have been endorsed by a consensus based entity, such as NQF. We also intend to continue seeking input from the MAP as part of the pre-rulemaking process. Comment: One commenter asked CMS to comment on the timeframe for the public release of the two ‘‘post-acute 30 day measures.’’ VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 Response: We believe the commenter is requesting information about the status of public reporting for the two HH claims based measures titled ‘‘Rehospitalization during the First 30 Days of HH’’ and ‘‘Emergency Department Use without Readmission during the First 30 Days of HH’’ that were finalized in the CY 2014 HH PPS final rule (78 FR 72256). In the CY 2014 HH PPS final rule, we stated that ‘‘these measures will be added to HH Compare for public reporting in CY 2015’’ (78 FR 72298.). c. OASIS Data Submission and OASIS Data for Annual Payment Update (1) Regulatory Authority The HH conditions of participation (CoPs) at § 484.55(d) require that the comprehensive assessment must be updated and revised (including the administration of the OASIS) no less frequently than: (1) The last 5 days of every 60 days beginning with the start of care date, unless there is a beneficiary-elected transfer, significant change in condition, or discharge and return to the same HHA during the 60day episode; (2) within 48 hours of the patient’s return to the home from a hospital admission of 24-hours or more for any reason other than diagnostic tests; and (3) at discharge. It is important to note that to calculate quality measures from OASIS data, there must be a complete quality episode, which requires both a Start of Care (initial assessment) or Resumption of Care OASIS assessment and a Transfer or Discharge OASIS assessment. Failure to submit sufficient OASIS assessments to allow calculation of quality measures, including transfer and discharge assessments, is a failure to comply with the CoPs. HHAs do not need to submit OASIS data for those patients who are excluded from the OASIS submission requirements. As described in the December 23, 2005 Medicare and Medicaid Programs: Reporting Outcome and Assessment Information Set Data as Part of the Conditions of Participation for Home Health Agencies final rule (70 FR 76202), we define the exclusion as those patients: • Receiving only non-skilled services; • For whom neither Medicare nor Medicaid is paying for HH care (patients receiving care under a Medicare or Medicaid Managed Care Plan are not excluded from the OASIS reporting requirement); • Receiving pre- or post-partum services; or • Under the age of 18 years. As set forth in the CY 2008 HH PPS final rule (72 FR 49863), HHAs that PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 become Medicare-certified on or after May 31 of the preceding year are not subject to the OASIS quality reporting requirement nor any payment penalty for quality reporting purposes for the following year. For example, HHAs certified on or after May 31, 2013 are not subject to the 2 percentage point reduction to their market basket update for CY 2014. These exclusions only affect quality reporting requirements and do not affect the HHAs’ reporting responsibilities as announced in the December 23, 2005 final rule, ‘‘Medicare and Medicaid Programs; Reporting Outcome and Assessment Information Set Data as Part of the Conditions of Participation for Home Health Agencies’’ (70 FR 76202). (2) HH QRP Requirements for CY 2015 Payment and Subsequent Years In the CY 2014 HH PPS Final rule (78 FR 72297), we finalized a proposal to consider OASIS assessments submitted by HHAs to CMS in compliance with HH CoPs and Conditions for Payment for episodes beginning on or after July 1, 2012, and before July 1, 2013 as fulfilling one portion of the quality reporting requirement for CY 2014. In addition, we finalized a proposal to continue this pattern for each subsequent year beyond CY 2014. OASIS assessments submitted for episodes beginning on July 1st of the calendar year 2 years prior to the calendar year of the Annual Payment Update (APU) effective date and ending June 30th of the calendar year 1 year prior to the calendar year of the APU effective date fulfill the OASIS portion of the HH QRP requirement. (3) Establishing a ‘‘Pay-for-Reporting’’ Performance Requirement for Submission of OASIS Quality Data Section 1895(b)(3)(B)(v)(I) of the Act states that ‘‘for 2007 and each subsequent year, in the case of a home health agency that does not submit data to the Secretary in accordance with subclause (II) with respect to such a year, the home health market basket percentage increase applicable under such clause for such year shall be reduced by 2 percentage points.’’ This ‘‘pay-for-reporting’’ requirement was implemented on January 1, 2007. However, to date, the quantity of OASIS assessments each HHA must submit to meet this requirement has never been proposed and finalized through rulemaking or through the subregulatory process. We believe that this matter should be addressed for several reasons. We believe that defining a more explicit performance requirement for E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 66075 principle that each HHA is expected to submit a minimum set of two ‘‘matching’’ assessments for each patient admitted to their agency. These matching assessments together create what is considered a ‘‘quality episode of care’’, consisting ideally of a Start of Care (SOC) or Resumption of Care (ROC) assessment and a matching End of Care (EOC) assessment. However, it was determined that there are several scenarios that could meet this ‘‘matching assessment requirement’’ of the new pay-for-reporting performance requirement. These scenarios or ‘‘quality assessments,’’ are defined as assessments that create a quality episode of care during the reporting period or could create a quality episode if the reporting period were expanded to an earlier reporting period or into the next reporting period. Seven types of assessments submitted by an HHA fit this definition of a quality assessment. These are: • A Start of Care (SOC) or Resumption of Care (ROC) assessment that has a matching End of Care (EOC) assessment. EOC assessments are assessments that are conducted at transfer to an inpatient facility (with or without discharge), death, or discharge from HH care. These two assessments (the SOC or ROC assessment and the EOC assessment) create a regular quality episode of care and both count as quality assessments. • A SOC/ROC assessment that could begin an episode of care, but occurs in the last 60 days of the performance period. This is labeled as a ‘‘Late SOC/ ROC’’ quality assessment. • An EOC assessment that could end an episode of care that began in the previous reporting period, (that is, an EOC that occurs in the first 60 days of the performance period.) This is labeled as an ‘‘Early EOC’’ quality assessment. • A SOC/ROC assessment that is followed by one or more follow-up assessments, the last of which occurs in the last 60 days of the performance period. This is labeled as an ‘‘SOC/ROC Pseudo Episode’’ quality assessment. • An EOC assessment is preceded by one or more follow-up assessments, the last of which occurs in the first 60 days of the performance period. This is labeled an ‘‘EOC Pseudo Episode’’ quality assessment. • A SOC/ROC assessment that is part of a known one-visit episode. This is labeled as a ‘‘One-Visit episode’’ quality assessment. • SOC, ROC, and EOC assessments that do not meet any of these definitions are labeled as ‘‘Non-Quality’’ assessments. • Follow-up assessments (that is, where the M0100 Reason for Assessment = ‘04’ or ‘05’) are considered ‘‘Neutral’’ assessments and do not count toward or against the pay for reporting performance requirement. Compliance with this performance requirement can be measured through the use of an uncomplicated mathematical formula. This pay for reporting performance requirement metric has been titled as the ‘‘Quality Assessments Only’’ (QAO) formula because only those OASIS assessments that contribute, or could contribute, to creating a quality episode of care are included in the computation. The formula based on this definition is as follows: Our ultimate goal is to require all HHAs to achieve a pay-for-reporting performance requirement compliance rate of 90 percent or more, as calculated using the QAO metric illustrated above. However, we proposed to implement this performance requirement in an incremental fashion over a 3 year period. We proposed to require each HHA to reach a compliance rate of 70 percent or better during the first reporting period 25 that the new pay-forreporting performance requirement is implemented. We further proposed to increase the pay-for-reporting performance requirement by 10 percent in the second reporting period, and then by an additional 10 percent in the third reporting period until a pay-forreporting performance level of 90 percent is reached. To summarize, we proposed to implement the pay-for-reporting performance requirement beginning with all episodes of care that occur on or after July 1, 2015, in accordance with the following schedule: • For episodes beginning on or after July 1st, 2015 and before June 30th, 2016, HHAs must score at least 70 percent on the QAO metric of pay-forreporting performance or be subject to a 2 percentage point reduction to their market basket update for CY 2017. • For episodes beginning on or after July 1st, 2016 and before June 30th, 2017, HHAs must score at least 80 percent on the QAO metric of pay-forreporting performance or be subject to a 2 percentage point reduction to their market basket update for CY 2018. 24 https://oig.hhs.gov/oei/reports/oei-01-1000460.asp 25 The term ‘‘reporting period’’ is defined as the submission of OASIS assessments for episodes between July 1 (of the calendar year two years prior to the calendar year of the APU effective date) through the following June 30th (of the calendar year one year prior to the calendar year of the APU effective date) each year. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 ER06NO14.011</GPH> tkelley on DSK3SPTVN1PROD with RULES2 the submission of OASIS data by HHAs would better meet section 5201(c)(2) of the Deficit Reduction Act of 2005 (DRA), which requires that ‘‘each home health agency shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this clause.’’ In February 2012, the Department of Health & Human Services Office of the Inspector General (OIG) performed a study to: (1) Determine the extent to which HHAs met federal reporting requirements for the OASIS data; (2) to determine the extent to which states met federal reporting requirements for OASIS data; and (3) to determine the extent to which the CMS was overseeing the accuracy and completeness of OASIS data submitted by HHAs. In a report entitled, ‘‘Limited Oversight of Home Health Agency OASIS Data,’’24 the OIG stated their finding that ‘‘CMS did not ensure the accuracy or completeness of OASIS data.’’ The OIG recommended that we ‘‘identify all HHAs that failed to submit OASIS data and apply the 2 percent payment reduction to them’’. We believe that establishing a performance requirement for submission of OASIS quality data would be responsive to the recommendations of the OIG. In response to these requirements and the OIG report, we designed a pay-forreporting performance system model that could accurately measure the level of an HHA’s submission of OASIS data. The performance system is based on the tkelley on DSK3SPTVN1PROD with RULES2 66076 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations • For episodes beginning on or after July 1st, 2017, and thereafter, and before June 30th, 2018 and thereafter, HHAs must score at least 90 percent on the QAO metric of pay-for-reporting performance or be subject to a 2 percentage point reduction to their market basket update for CY 2019, and each subsequent year thereafter. We solicited public comment on our proposal to implement the pay-forreporting performance requirement, as described previously, for the HH QRP. We received the following comments in response to our proposal: Comment: MedPAC submitted a comment in which they expressed full support for the proposal to establish a minimum requirement for submission of OASIS assessments. MedPAC stated that ‘‘the requirement for submission of OASIS data to receive a full payment update has been in effect for many years, and agencies should have many years of experience with the transmission of this data’’ and suggested that CMS consider phasing in the requirement at a faster rate, given the familiarity of HHAs with these processes. MedPAC recommended raising the threshold to 90 percent in the second year. Another commenter, who stated support for this proposal, suggested increasing the compliance thresholds to 75 percent, 85 percent and 95 percent (instead of the 70 percent, 80 percent and 90 percent threshold that were proposed). Another commenter suggested that CMS should carefully monitor compliance rates over the next two years to determine if a 90 percent compliance rate is a realistic goal. Several commenters supported our proposal to establish a minimum requirement for submission of OASIS assessments for a variety of reasons. One commenter stated a belief that this proposal demonstrates CMS’ efforts to obtain more complete patient data sets. Another commenter expressed an opinion that the proposed OASIS minimum reporting requirement is a program integrity reform and cost cutting measure that is preferable to the across the board payment cuts established by CMS in previous HH PPS rules. Response: We thank MedPAC and other commenters who support our proposal to establish a pay-for-reporting performance requirement for the HH QRP. We agree that the requirements for OASIS reporting have been in effect for many years. The HH CoPs which are codified at 42 CFR 484.55 and mandate use of the OASIS data set when evaluating adult non-maternity patients receiving skilled services were established in 1999 (64 FR 3764 through VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 3784). OASIS reporting was first implemented on July 19, 1999 and in 2007, OASIS reporting became mandatory for quality reporting purposes under section 1895(b)(3)(B)(v)(I) of the Act. HHAs have been required to submit OASIS data as a condition of payment of their Medicare claims since 2010. As HHAs have been required to report OASIS data for the past 15 years as a CoP in the Medicare program and as a condition of payment of their Medicare claims for the past 4 years, our establishment of a minimum threshold for OASIS reporting should not place any new or additional burden on HHAs. Our ultimate goal is to require all HHAs to achieve a pay-for-reporting performance requirement compliance rate of 90 percent or more, as calculated using the QAO metric described and in this section. In the proposed rule, we proposed to require each HHA to reach a compliance rate of 70 percent or better during the first reporting period that the new pay-for-reporting performance requirement is implemented. We believe that use of the 70 percent standard is one that is attainable by any HHA, whether it is a large corporate entity or very small family run business. We had further proposed to increase the performance requirement by 10 percent in the second reporting period, and then by an additional 10 percent in the third reporting period until a pay-forreporting performance requirement of 90 percent is reached, because we believed that this schedule would promote successful performance by all HHAs. However, after carefully considering the comments submitted, we have reconsidered our proposal for implementation of a ‘‘pay-forperformance’’ performance requirement over a 3 year period. MedPAC suggested that CMS consider phasing in the OASIS reporting requirement at a faster rate, given the familiarity that HHAs have with the OASIS process. MedPAC recommended raising the threshold to 90 percent in the second year. We agree with MedPAC’s contention that HHAs have been statutorily required to report OASIS for a number of years and therefore should have many years of experience with the collection of OASIS data and transmission of this data to CMS. Given the length of time that HHAs have been mandated to report OASIS data, we believe that HHAs will adapt quickly to the implementation of the ‘‘pay-forreporting’’ performance requirement, if phased in over a 2 year period. On the other hand, the ‘‘pay-for-reporting’’ performance requirement is a new PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 reporting requirement that can have a significant financial impact any HHA that is not able to meet the requirements. We believe that it is best to proceed with the establishment of the 70 percent reporting requirement during the first reporting period (that is, July 1, 2015 through June 30, 2016) and will finalize this part of our proposal. However, we will not finalize our proposal to increase the reporting requirement in 10 percent increments over a 2 year period until the maximum rate of 90 percent is reached. In consideration of the recommendations made, we plan to monitor provider performance under the ‘‘pay-for-reporting’’ performance requirement during the time period of July 1, 2014 through June 30, 2015. We will then use such information, as available, to make a determination about what the ‘‘pay-for-reporting’’ performance requirement will be set at in the 2nd and subsequent years. For example, we will review OASIS data from a recent reporting period simulating the ‘‘pay-for reporting’’ performance 70 percent submission requirement to determine the ‘‘hypothetical performance’’ of each HHA ‘‘as if’’ the ‘‘pay for reporting’’ performance requirement were in effect during the reporting period preceding its implementation. We will provide a report to each HHA of their ‘‘hypothetical performance’’ under the ‘‘pay for reporting’’ performance requirement during the 2014–2015 ‘‘preimplementation reporting period.’’ We will also consider provider performance during the first part of the first year of the ‘‘pay for reporting’’ performance requirement as data are available in determining the OASIS reporting requirement for the 2nd and subsequent years. Comment: A commenter expressed agreement with our proposal to implement the OASIS minimum reporting requirements over a 3 year period, but strongly recommended that such requirements be limited to the OASIS data sets collected for Medicare PPS episodes only. This commenter stated a belief that it would be too burdensome if HHAs were required to complete OASIS assessments for patients on other payment programs. Response: Patients receiving care under a Medicare or Medicaid managed care plan are not excluded from the OASIS reporting requirements, and HHAs are required to submit OASIS assessments for these patients. OASIS reporting is mandated for all Medicare beneficiaries (under 42 CFR 484.250(a), 484.225(i), and 484.55). The HH CoPs require that the Home Health Registered E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Nurse (HH RN) or qualified therapist perform an initial assessment within 48 hours of referral, within 48 hours of the patient’s return home, or on the physician-ordered start of care date. The HH RN or qualified therapist must also complete a comprehensive assessment within 5 days from the start of care. During these assessments, the HH RN or qualified therapist must determine the patient’s eligibility for the Medicare HH benefit, including homebound status (42 CFR 484.55(a)(1) and 42 CFR 484.55 (b)). In addition, the requirement for OASIS reporting on Medicare and Medicaid Managed Care patients was established in a final rule titled ‘‘Medicare and Medicaid Programs: Reporting Outcome and Assessment Information Set Data as Part of the Conditions of Participation for Home Health Agencies Final Rule’’ dated December 23, 2005 (70 FR 76202), which stated the following: tkelley on DSK3SPTVN1PROD with RULES2 In the January 25, 1999, interim final rule with comment period (64 FR 3749), we generally mandated that all HHAs participating in Medicare and Medicaid (including managed care organizations providing home health services to Medicare and Medicaid beneficiaries) report their OASIS data to the database we established within each State via electronic transmission. (76 FR 76200). We do not believe that there is more burden associated with the collection of OASIS assessment data for a Medicare Managed Care patient than there is for a HH patient that receives traditional Medicare PPS benefits. The requirements for the HH RN or qualified therapist to perform an initial and comprehensive assessment and complete all required OASIS assessments is the same for all Medicare patients regardless of the type of Medicare benefits they receive. The completion of these activities is a condition of payment of both Medicare PPS and managed care claims. Comment: A commenter, while in general agreement with the establishment of a minimum reporting requirement for OASIS reporting, expressed disagreement with implementation of this requirement on July 1, 2015. This commenter voiced the opinion that HHAs should first be informed of their current OASIS submission compliance rate, so they have an opportunity to improve, if below the 70 percent threshold. Another commenter suggested that CMS provide each HHA with their current OASIS reporting compliance rates to allow them to assess and understand their compliance levels and create a benchmark against which they can seek to improve over time. Another VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 commenter requested that CMS publish the current rate of HHA compliance with OASIS reporting and recommended that the new compliance standard be based on incremental increases from those rates. Response: HHAs have been required to report OASIS data on 100 percent of their Medicare beneficiary patients for the past 15 years as a CoP and as a condition of payment of their Medicare claims. Also, since 2007, HHAs have been required to report OASIS quality data on 100 percent of their Medicare beneficiary patients in order to receive their full yearly market basket update. We do not agree that revealing sub-par provider compliance rates will be helpful to providers as several commenters have requested. Our establishment of the pay-for reporting performance requirement is a means by which we can measure HHA compliance with the established and long standing OASIS reporting requirements, while allowing HHAs a 2 year period to bring their performance up to the 90 percent compliance level. As the OASIS reporting requirements have been in existence for 15 years, HHAs should already possess knowledge of these requirements and know what they need to do to bring their agency into compliance. Furthermore, as OASIS reporting on each Medicare beneficiary is a requirement for payment of Medicare billing claims and also a HH CoP, our establishment of a minimum threshold for OASIS reporting should not place any new or additional burden on HHAs. Comment: Several commenters, while in general agreement with this proposal, requested that CMS provide clarification of the term ‘‘submission’’ and inquired whether this requires both submission and acceptance of OASIS data by the state agency. Another commenter sought assurance that HHAs will not be penalized for delayed acceptance of OASIS data by state agency due to CMS server/IT issues. Response: The pay-for reporting performance requirements will go into effect on July 1, 2015. However, on January 1, 2015, the data submission process for OASIS will convert from the current state-based OASIS submission system to a new national OASIS submission system known as the Assessment Submission and Processing (ASAP) System.26 Therefore, the 26 The state-based OASIS submission system is scheduled to shut down permanently at 6:00 p.m. on December 26, 2014. Beginning at 12:00 a.m. midnight on January 1, 2015, HHAs must begin to submit their OASIS assessment via the national ASAP system. With the implementation of the PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 66077 commenter’s question about whether successful submission requires both submission and acceptance of OASIS data by the state agency is moot because the state-based OASIS submission system will not be in existence. On July 1, 2015, when the pay-for reporting performance requirement of 70 percent goes into effect, providers will be required to submit their OASIS assessment data into the ASAP system. Successful submission of an OASIS assessment will consist of the submission of the data into the ASAP system with a receipt of no fatal error messages. Error messages received during submission can be an indication of a problem that occurred during the submission process and could also be an indication that the OASIS assessment was rejected. Successful submission can be verified by ascertaining that the submitted assessment data resides in the national database after the assessment has met all of the quality standards for completeness and accuracy during the submission process. Should one or more OASIS assessments submitted by a HHA be rejected due to an IT/servers issue cause by CMS, we may, at our discretion, excuse the non-submission of OASIS data. We anticipate that such a scenario would rarely, if ever, occur. In the event that a HHA believes they were unable to submit OASIS assessments due to an IT/ server issue on the part of CMS, the HHA should be prepared to provide any documentation or proof available which demonstrates that no fault on their part contributed to the failure of the OASIS records to transmit to CMS. Comment: Several commenters suggested that CMS provide comprehensive education on the new OASIS minimum reporting requirements for at least 6 months before it is effective. One commenter stated a belief that provider education is especially necessary since the failure to meet the submission threshold would result in a 2 percent reduction in payment for an entire calendar year. Response: We agree that educating HH providers about the new OASIS data submission requirements is very important and necessary. The initial performance period for the pay-forreporting performance requirement will consist of July 1, 2015 through June 30, 2016. Prior to and during this performance period, we will schedule multiple Open Door Forums and webinars to educate HHA personnel about the pay-for-reporting performance requirement program and the pay-forASAP system, HHAs will no longer submit OASIS assessment data to CMS via their state databases. E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66078 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations reporting performance QAO metric. Additionally, OASIS Education Coordinators (OECs) will be trained to provide state-level instruction on this program and metric. We have already posted a report which provides a detailed explanation of the methodology for this pay-for-reporting QAO methodology. To view this report, go to: https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/HomeHealthQualityInits/ Home-Health-Quality-ReportingRequirements.html. Training announcements and additional educational information related to the pay-for-reporting Performance Requirement will be provided in the near future on the HH Quality Initiatives Web page (https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/ HomeHealthQualityInits/). Comment: Another commenter expressed an opinion that the terms of our proposed ‘‘pay-for reporting performance requirement’’ reporting are not clear. This commenter states the opinion that the definitions of both the numerator and the denominator in the proposed ratio are not clear. Response: We have posted a technical report which provides a detailed explanation of the methodology used for the pay-for-reporting QAO methodology. This report provides a detailed definition of both the numerator and denominator of the QAO metric, and also addresses the definition of quality vs. non quality assessments. In addition, this report provides an extensive analysis of the pay-for reporting methodology using 2012–2013 OASIS assessment data. To view this report, go to: https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/ HomeHealthQualityInits/Downloads/ Pay-for-Reporting-Quality-AssessmentsOnly-Methodology.pdf. Comment: A commenter believes that it is not necessary for CMS to establish a minimum threshold for the submission of OASIS quality data because state surveyors have access to the OASIS data and, therefore, have ways to ensure HHAs are in compliance with OASIS data submission requirements. Response: We respectfully disagree with this commenter. State surveyors would not be able to ensure compliance with the OASIS data submission requirements for several reasons. First, state surveyors have limited access to the OASIS data. Second, state surveyors do not have access to the claims/billing information that is necessary to determine if complete quality episodes VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 have been submitted for each patient. Third, compliance with OASIS quality reporting requirements must be assessed on an annual basis in order to determine whether an HHA will receive their full market basket update or the 2 percentage point reduction for noncompliance. Therefore, use of state surveyors to perform this task is not possible. Comment: A commenter recommended that CMS provide HHAs with a 30-day period in which to review CMS’s assessment of their compliance and submit corrections if necessary. Response: Such a process has been in place for the HH QRP for some time. This process is referred to as the ‘‘reconsideration process.’’ The OASIS data collection period runs from July 1st each year to June 30th of the following year. At the conclusion of each reporting period, we will assess the type and amount of OASIS data submitted by each HHA during the reporting period to determine whether each provider met the quality reporting requirements. HHAs that do not meet the requirements for that reporting period will be sent a ‘‘notice of noncompliance’’ letter by their Medicare Administrative Contractor (MAC). A HHA will have 30 days from the date of the ‘‘notice of non-compliance’’ letter to file a request for reconsideration to us. The HHA must tell us why they think the finding of non-compliance was incorrect and provide any documentation that proves they did meet the reporting requirements for that reporting period. The reconsideration process can also serve to provide notice to HHAs who fall below the pay-for-reporting performance requirement for a given reporting period of their OASIS compliance score for the reporting period. The HHA will then have 30 days to submit a request for reconsideration if they disagree with the compliance score provided by us. The HHA will also have the opportunity to submit evidence on their behalf of a higher compliance score. Comment: A commenter suggested that CMS should include an exemption from the OASIS minimum reporting requirements for small agencies similar to that given with the HH–CAHPS requirements. Response: Small HHAs are exempt from reporting HHCAHPS for several reasons. First, the data is not collected using OASIS, but is instead collected by the HHCAHPS, which is a non-payment related data collection instrument. Second, HHCAHPS data are collected for the purpose for quality monitoring. If data were collected from very small PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 HHAs, there is a high probability that protected patient information or confidential information could be identified simply because of the small number of responses. Therefore, the granting of an exemption to small HHAs is done to protect the integrity of the data. However, the reporting of OASIS assessment data on each patient by HHAs is mandated by section 1895(b)(3)(B)(v)(II) of the Act. This statute required that ‘‘each home health agency shall submit to the Secretary such data that the Secretary determines are appropriate for the measurement of health care quality. Such data shall be submitted in a form and manner, and at a time, specified by the Secretary for purposes of this clause.’’ Section 1895(b)(3)(B)(v)(I) of the Act states that ‘‘for 2007 and each subsequent year, in the case of a home health agency that does not submit data to the Secretary in accordance with sub clause (II) with respect to such a year, the home health market basket percentage increase applicable under such clause for such year shall be reduced by 2 percentage points.’’ None of the statutes or Medicare regulations related to OASIS reporting exempt small HHAs from the OASIS reporting requirements. In fact, we would not be able to provide such an exemption, as submission of OASIS assessments is a condition of payment and condition of participation in the Medicare program. Any HHA (regardless of size) that wants to bill for HH care of a Medicare patient must submit the proper OASIS assessments in order to file valid claims. Also, any HHA (regardless of size) that wants to participate in the Medicare program, must submit the required type and amount of OASIS assessments for their Medicare patients. Comment: One commenter, though in agreement with the timeframes and the minimum scores proposed by CMS, expressed a belief that CMS should establish a disaster/exceptional circumstances policy to address situations beyond the control of the HHA that could result in the inability to submit OASIS data in a timely manner. This commenter noted that such a policy has been established in other post-acute care settings. Response: We thank this commenter for their support of our proposal to establish a pay-for-reporting performance requirement. However, the commenter’s suggestion that CMS establish an exceptional circumstances/ disaster waiver policy for the HH QRP is outside the scope of the proposals that made in the proposed rule and E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations therefore, we are unable to comment on this suggestion. We will however take this suggestion under advisement. Comment: One commenter expressed concern that the proposal to establish a ‘‘pay-for-reporting’’ performance requirement for OASIS reporting is actually based on a ‘‘pay for performance’’ model. Response: The ‘‘pay-for-reporting performance requirement’’ discussed above is not a pay-for-performance model. This performance requirement simply sets a standard for the type and minimum number of OASIS assessments that each HHA must submit during a 12 month reporting period. If a HHA submits the required number of OASIS assessments during the 12 month reporting period, they will receive their full market basket update for the following calendar year. Final Decision: After consideration of the public comments received, we are adopting as final, our proposal to establish a pay-for-reporting performance requirement, with the modifications stated below: • For episodes beginning on or after July 1st, 2015 and before June 30th, 2016, HHAs must score at least 70 percent on the QAO metric of pay-forreporting performance requirement or be subject to a 2 percentage point reduction to their market basket update for CY 2017. • We defer for now from setting a minimum OASIS reporting requirement for the 2nd and subsequent years of the OASIS ‘‘pay-for-reporting’’ performance requirement program. However, we will consider increasing the requirement in subsequent years. We anticipate rates of at least 80 percent or higher, not exceed 90 percent, in years 2 and 3. tkelley on DSK3SPTVN1PROD with RULES2 d. Updates to HH QRP Measures Which Are Made as a Result of Review by the NQF Process In the proposed rule, we noted that section 1895(b)(3)(B)(v)(II) of the Act generally requires the Secretary to adopt measures that have been endorsed by the entity with a contract under section 1890(a) of the Act. This contract is currently held by the NQF. The NQF is a voluntary consensus standard-setting organization with a diverse representation of consumer, purchaser, provider, academic, clinical, and other health care stakeholder organizations. The NQF was established to standardize health care quality measurement and reporting through its consensus development process.27 27 For more information about the NQF Consensus Development Process, please visit the NQF Web site using the following link: https:// VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 The NQF undertakes to: (1) Review new quality measures and national consensus standards for measuring and publicly reporting on performance; (2) provide for annual measure maintenance updates to be submitted by the measure steward for endorsed quality measures; (3) provide for measure maintenance endorsement on a 3-year cycle; (4) conduct a required follow-up review of measures with time limited endorsement for consideration of full endorsement; and (5) conduct ad hoc reviews of endorsed quality measures, practices, consensus standards, or events when there is adequate justification for a review. In the normal course of measure maintenance, the NQF solicits information from measure stewards for annual reviews to review measures for continued endorsement in a specific 3year cycle. In this measure maintenance process, the measure steward is responsible for updating and maintaining the currency and relevance of the measure and for confirming existing specifications to the NQF on an annual basis. As part of the ad hoc review process, the ad hoc review requester and the measure steward are responsible for submitting evidence for review by a NQF Technical Expert panel which, in turn, provides input to the Consensus Standards Approval Committee which then makes a decision on endorsement status and/or specification changes for the measure, practice, or event. Through the NQF’s measure maintenance process, the NQF endorsed measures are sometimes updated to incorporate changes that we believe do not substantially change the nature of the measure. With respect to what constitutes a substantive versus a nonsubstantive change, we expect to make this determination on a measure-bymeasure basis. Examples of such nonsubstantive changes might include updated diagnosis or procedure codes, medication updates for categories of medications, broadening of age ranges, and changes to exclusions for a measure. We believe that nonsubstantive changes may include updates to measures based upon changes to guidelines upon which the measures are based. These types of maintenance changes are distinct from more substantive changes to measures that result in what can be considered new or different measures, and that they do not trigger the same agency obligations under the Administrative Procedure Act. www.qualityforum.org/Measuring_Performance/ Consensus_Development_Process.aspx. PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 66079 We proposed that, in the event that the NQF makes updates to an endorsed measure that we have adopted for the HH QRP in a manner that we consider to not substantially change the nature of the measure, we will use a subregulatory process to incorporate those updates to the measure specifications that apply to the program. Specifically, we stated that we would revise the information that is posted on the CMS Home Health Quality Initiatives Web site at https://www.cms.gov/Medicare/ Quality-Initiatives-Patient-AssessmentInstruments/HomeHealthQualityInits/ HHQIQualityMeasures.html so that it clearly identifies the updates and provides links to where additional information on the updates can be found. We also stated that we would refer HHAs to the NQF Web site for the most up-to date information about the quality measures (https:// www.qualityforum.org/). In addition, we stated that we would provide sufficient lead time for HHAs to implement the changes where changes to the data collection systems would be necessary. We further proposed to use the traditional ‘‘notice and comment’’ rulemaking process to adopt changes to measures that we consider to substantially change the nature of the measure. Examples of changes that we might consider to be substantive would be those in which the changes are so significant that the measure is no longer the same measure, or when a standard of performance assessed by a measure becomes more stringent, such as changes in acceptable timing of medication, procedure/process, test administration, or expansion of the measure to a new setting. We believed that our proposal adequately balances our need to incorporate NQF updates to NQF endorsed measures used in the HH QRP in the most expeditious manner possible, while preserving the public’s ability to comment on updates to measures that so fundamentally change an endorsed measure that it is no longer the same measure that we originally adopted. We noted that a similar policy was adopted for the Hospital IQR Program, the PPS-Exempt Cancer Hospital (PCH) Quality Reporting Program, the LongTerm Care Hospital Quality Reporting (LTCHQR) Program, the Inpatient Rehabilitation Facility Quality Reporting Program (IRF QRP) and the Inpatient Psychiatric Facility (IPF) Quality Reporting Program. We invited public comment on our proposal to adopt a policy in which NQF changes to a measure that are nonsubstantive in nature will be adopted using a sub-regulatory process and NQF E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66080 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations changes that are substantive in nature will be adopted through the rulemaking process. We received the following public comments in response to this proposal: Comment: One commenter was opposed to our proposal to use subregulatory guidance to incorporate NQF updates to previously endorsed measures unless NQF itself, in communication accompanying such updates, affirms that such updates do not substantially change the nature of the measure. Response: We believe it unlikely that NQF will undertake to make a determination as to whether a change to a measure is substantive or nonsubstantive. This is a policy determination that NQF is likely to leave to the discretion of the measure steward. In the event that a measure that has been previously adopted for use in the HH QRP is updated in a manner that we determine to be non-substantive in nature, we will ensure that stakeholders are fully informed about these changes and that they have been afforded adequate lead time to make any necessary changes. The NQF process requires an ad-hoc review of any measures that undergo substantive changes, and any party may request such an ad hoc review. If stakeholders believe a change to measures is substantive, they are encouraged to participate in the NQF process. Comment: Several commenters expressed a concern that the definition of what changes are considered to substantive and what changes are nonsubstantive is not clear. Response: As noted above, with respect to what constitutes a substantive versus a non-substantive change, we expect to make this determination on a measure-by-measure basis. Examples of such non-substantive changes might include updated diagnosis or procedure codes, medication updates for categories of medications, broadening of age ranges, and changes to exclusions for a measure. We believe that nonsubstantive changes may include updates to measures based upon changes to guidelines upon which the measures are based. These types of maintenance changes are distinct from more substantive changes to measures that result in what can be considered new or different measures, and that they do not trigger the same agency obligations under the Administrative Procedure Act. Comment: One commenter expressed the opinion that CMS should develop a more comprehensive list of substantive and non-substantive change in a measure, and further suggested that VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 stakeholders should be given the opportunity to submit comments on the list for CMS to consider. Response: We appreciate the commenters request for a more comprehensive list of substantive and non- substantive change in a measure, and the opportunity to submit comments on such lists. However, as noted above, we believe that our proposal adequately balances our need to incorporate NQF updates to NQF endorsed measures used in the HH QRP in the most expeditious manner possible, while preserving the public’s ability to comment on updates to measures that so fundamentally change an endorsed measure that it is no longer the same measure that we originally adopted. We noted that a similar policy was adopted for the Hospital Inpatient Quality Reporting (IQR) Program, the PPS-Exempt Cancer Hospital (PCH) Quality Reporting Program, the LongTerm Care Hospital Quality Reporting (LTCHQR) Program, the Inpatient Rehabilitation Facility Quality Reporting Program (IRF QRP) and the Inpatient Psychiatric Facility (IPF) Quality Reporting Program. Comment: A commenter expressed concern that most HH providers are not aware of the NQF Consensus Development process, and therefore may not have the opportunity to comment on changes to measures. Response: The NQF regularly maintains its endorsed measures through annual and triennial reviews, which may result in updates to the NQF-endorsed measures. HHAs can go to the NQF Web page for information about the measure endorsement process. The NQF process is open to the public and transparent and incorporates an opportunity for public comment and engagement in the measure maintenance process. In the event that any measure that has been previously adopted for use in the HH QRP is updated through the NQF process, we will ensure that stakeholders are fully informed about these changes and that they have been afforded adequate lead time to make any necessary changes. Some of the methods that we will use to keep our stakeholders informed include: (1) Posting of information on the HH Quality Initiatives Web page; (2) holding special open door forums; (3) posting information in the CMS weekly E-News publication; and (4) responding to provider questions. While we expect to provide notice to stakeholders when we intend to seek NQF’s review of measures, the NQF process also incorporates an opportunity for public PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 comment and engagement in the measure maintenance process. Comment: Another commenter recommended that CMS notify HH providers when NQF, in their Consensus Development Process, is asking for input on NQF-endorsed measures used by HHAs, in order to give them an opportunity to comment on a change in the measure. Response: We anticipate that in most cases such changes will occur, not during the measure development process, but after a measure has already been endorsed by NQF and has been adopted for use in the HH QRP. Changes to adopted measures could take place during yearly measure maintenance or during the 3 year measure review process. We acknowledge that the NQF postendorsement reviews may provide limited opportunity for provider engagement in the process. Therefore, we will make every effort to keep stakeholders informed about reviews to HH quality measures. Some of the methods that we will use to keep our stakeholders informed include: (1) Posting of information on the HH Quality Initiatives Web page; (2) holding special open door forums; (3) posting information in the CMS weekly E-News publication; and (4) responding to provider questions. Comment: One commenter expressed the concern about whether changes labeled as non-substantive changes are truly ‘‘non-substantive’’. This commenter proposed that CMS convene a panel of HH experts, drawn from individuals representing various regions of the country and types of agencies (urban, rural, profit, non-profit, governmental, etc.) with experience in the industry, to offer their opinion on whether changes to a measure are truly ‘‘non-substantive’’ in nature. The commenter further suggested that the panel be allowed to consider the changes for ‘‘two cycles of consideration’’ and if the panel supports the changes, then the sub-regulatory could be used. Response: In the proposed rule, we proposed to establish a policy that ‘‘in the event that the NQF makes updates to an endorsed measure that we have adopted for the HH QRP in a manner that we consider to not substantially change the nature of the measure, we will use a sub-regulatory process to incorporate those updates to the measure specifications that apply to the program.’’ It is our intent that this policy apply to existing NQF-endorsed quality measures that have already been adopted for use in the HH QRP. These measures have undergone the measure E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations development and endorsement process which typically includes multiple opportunities for input from stakeholders. Examples of stakeholder involvement include, but are not limited to: (1) Expert opinions obtained from a technical expert panel consisting of experts drawn from the HH community, (2) public comments solicited during the measure development process, and (3) multiple opportunities to provide input during the NQF endorsement process. HHAs will have multiple opportunities to become familiar with and provide their input related to the existing HH quality measures by the time they come up for the NQF one year measure maintenance review or the 3 year re-endorsement review. Because the NQF process is open and transparent and readily available to HHAs, they can learn of possible changes existing HH quality measure as a result of the NQF process and provide their input should they choose to do so. Furthermore, the NQF process provides for a comprehensive and in-depth review of all quality measures under review (including changes to these measures) by a highly qualified panel of experts in the field of home health care. For these reasons, we do not believe it is necessary to convene another panel of home health experts, as suggested by this commenter, to seek an opinion on whether changes to a measure are truly ‘‘non-substantive’’ in nature. This commenter further suggested that the expert panel be allowed to consider the changes for ‘‘two cycles of consideration’’ and if the panel supports the changes, then the sub-regulatory process should be used. It is not clear how this commenter defines ‘‘two cycles of consideration’’, however, it is not feasible for CMS to allow a decision regarding changes to an existing quality measure to go unresolved for a prolonged period of time. It is necessary for CMS to immediately assess any changes made to existing quality measures to determine if changes to the data collection process, data collection instrument, or technical specifications must be made. In addition CMS must determine if provider training or educational materials are required. Final Decision: After consideration of the public comments we received, we are adopting final a policy to: (1) Utilize a sub-regulatory process to incorporate updates to the HH QRP quality measures that are not substantive in nature; and (2) continue use of the rulemaking process to adopt changes to measures that we consider to be substantive in nature. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 e. Home Health Care CAHPS® Survey (HHCAHPS) In the CY 2014 HH PPS final rule (78 FR 72294), we stated that the HH quality measures reporting requirements for Medicare-certified agencies includes the Home Health Care CAHPS® (HHCAHPS) Survey for the CY 2014 APU. We are continuing to maintain the stated HHCAHPS data requirements for CY 2015 that have been set out in CY 2014 and in previous rules. We note that home health agencies and HHCAHPS survey vendors sometimes refer to the Home Health Care CAHPS® Survey as ‘‘HH–CAHPS’’ rather than ‘‘HHCAHPS’’. (1) Background and Description of HHCAHPS As part of the HHS Transparency Initiative, we implemented a process to measure and publicly report patient experiences with home health care, using a survey developed by the Agency for Healthcare Research and Quality’s (AHRQ’s) Consumer Assessment of Healthcare Providers and Systems (CAHPS®) program and endorsed by the NQF in March 2009 (NQF Number 0517). The HHCAHPS survey is part of a family of CAHPS® surveys that asks patients to report on and rate their experiences with health care. The Home Health Care CAHPS® (HHCAHPS) survey presents home health patients with a set of standardized questions about their home health care providers and about the quality of their home health care. Prior to this survey, there was no national standard for collecting information about patient experiences that will enable valid comparisons across all HHAs. The history and development process for HHCAHPS has been described in previous rules and is also available on the official HHCAHPS Web site at https://homehealthcahps.org and in the annually-updated HHCAHPS Protocols and Guidelines Manual, which is downloadable from https:// homehealthcahps.org. For public reporting purposes, we report five measures from the HHCAHPS Survey—three composite measures and two global ratings of care that are derived from the questions on the HHCAHPS survey. The publicly reported data are adjusted for differences in patient mix across HHAs. We update the HHCAHPS data on Home Health Compare on www.medicare.gov quarterly. Each HHCAHPS composite measure consists of four or more individual survey items regarding one of the following related topics: • Patient care (Q9, Q16, Q19, and Q24); PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 66081 • Communications between providers and patients (Q2, Q15, Q17, Q18, Q22, and Q23); and • Specific care issues on medications, home safety, and pain (Q3, Q4, Q5, Q10, Q12, Q13, and Q14). The two global ratings are the overall rating of care given by the HHA’s care providers (Q20), and the patient’s willingness to recommend the HHA to family and friends (Q25). The HHCAHPS survey is currently available in English, Spanish, Chinese, Russian, and Vietnamese. The OMB number on these surveys is the same (0938–1066). All of these surveys are on the Home Health Care CAHPS® Web site, https://homehealthcahps.org. We continue to consider additional language translations of the HHCAHPS in response to the needs of the home health patient population. All of the requirements about home health patient eligibility for the HHCAHPS survey and conversely, which home health patients are ineligible for the HHCAHPS survey are delineated and detailed in the HHCAHPS Protocols and Guidelines Manual, which is downloadable at https://homehealthcahps.org. Home health patients are eligible for HHCAHPS if they received at least two skilled home health visits in the past 2 months, which are paid for by Medicare or Medicaid. Home health patients are ineligible for inclusion in HHCAHPS surveys if one of these conditions pertains to them: • Are under the age of 18; • Are deceased prior to the date the sample is pulled; • Receive hospice care; • Receive routine maternity care only; • Are not considered survey eligible because the state in which the patient lives restricts release of patient information for a specific condition or illness that the patient has; or • No Publicity patients, defined as patients who on their own initiative at their first encounter with the HHAs make it very clear that no one outside of the agencies can be advised of their patient status, and no one outside of the HHAs can contact them for any reason. We stated in previous rules that Medicare-certified HHAs are required to contract with an approved HHCAHPS survey vendor. This requirement continues, and Medicare-certified agencies also must provide on a monthly basis a list of their patients served to their respective HHCAHPS survey vendors. Agencies are not allowed to influence at all how their patients respond to the HHCAHPS survey. E:\FR\FM\06NOR2.SGM 06NOR2 66082 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations As previously required, HHCAHPS survey vendors are required to attend introductory and all update trainings conducted by CMS and the HHCAHPS Survey Coordination Team, as well as to pass a post-training certification test. We have approximately 30 approved HHCAHPS survey vendors. The list of approved HHCAHPS survey vendors is available at https:// homehealthcahps.org. tkelley on DSK3SPTVN1PROD with RULES2 (2) HHCAHPS Oversight Activities We stated in prior final rules that all approved HHCAHPS survey vendors are required to participate in HHCAHPS oversight activities to ensure compliance with HHCAHPS protocols, guidelines, and survey requirements. The purpose of the oversight activities is to ensure that approved HHCAHPS survey vendors follow the HHCAHPS Protocols and Guidelines Manual. As stated in previous HH PPS final rules, all HHCAHPS approved survey vendors must develop a Quality Assurance Plan (QAP) for survey administration in accordance with the HHCAHPS Protocols and Guidelines Manual. An HHCAHPS survey vendor’s first QAP must be submitted within 6 weeks of the data submission deadline date after the vendor’s first quarterly data submission. The QAP must be updated and submitted annually thereafter and at any time that changes occur in staff or vendor capabilities or systems. A model QAP is included in the HHCAHPS Protocols and Guidelines Manual. The QAP must include the following: • Organizational Background and Staff Experience; • Work Plan; • Sampling Plan; • Survey Implementation Plan; • Data Security, Confidentiality and Privacy Plan; and • Questionnaire Attachments As part of the oversight activities, the HHCAHPS Survey Coordination Team conducts on-site visits to all approved HHCAHPS survey vendors. The purpose of the site visits is to allow the HHCAHPS Survey Coordination Team to observe the entire HHCAHPS Survey implementation process, from the sampling stage through file preparation and submission, as well as to assess data security and storage. The HHCAHPS Survey Coordination Team reviews the HHCAHPS survey vendor’s survey systems, and assesses administration protocols based on the HHCAHPS Protocols and Guidelines Manual posted at https://homehealthcahps.org. The systems and program site visit review includes, but is not limited to the following: VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 • Survey management and data systems; • Printing and mailing materials and facilities; • Telephone call center facilities; • Data receipt, entry and storage facilities; and • Written documentation of survey processes. After the site visits, HHCAHPS survey vendors are given a defined time period in which to correct any identified issues and provide follow-up documentation of corrections for review. HHCAHPS survey vendors are subject to follow-up site visits on an as-needed basis. In the CY 2013 HH PPS final rule (77 FR 67094, 67164), we codified the current guideline that all approved HHCAHPS survey vendors fully comply with all HHCAHPS oversight activities. We included this survey requirement at § 484.250(c)(3). (3) HHCAHPS Requirements for the CY 2015 APU In the CY 2014 HH PPS final rule (78 FR 72294), we stated that for the CY 2015 APU, we require continued monthly HHCAHPS data collection and reporting for 4 quarters. The data collection period for CY 2015 APU includes the second quarter 2013 through the first quarter 2014 (the months of April 2013 through March 2014). Although these dates are past, we included them in the proposed rule so that HHAs were reminded of what months constituted the requirements for the CY 2015 APU. HHAs were required to submit their HHCAHPS data files to the HHCAHPS Data Center for the HHCAHPS data from the first quarter of 2014 data by 11:59 p.m., e.d.t. on July 16, 2014. (4) HHCAHPS Requirements for the CY 2016 APU For the CY 2016 APU, we require continued monthly HHCAHPS data collection and reporting for 4 quarters. The data collection period for the CY 2016 APU includes the second quarter 2014 through the first quarter 2015 (the months of April 2014 through March 2015). We are in this data collection period now. HHAs are required to submit their HHCAHPS data files to the HHCAHPS Data Center for the second quarter 2014 by 11:59 p.m., e.d.t. on October 16, 2014; for the third quarter 2014 by 11:59 p.m., e.s.t. on January 15, 2015; for the fourth quarter 2014 by 11:59 p.m., e.d.t. on April 16, 2015; and for the first quarter 2015 by 11:59 p.m., e.d.t. on July 16, 2015. These deadlines are firm; no exceptions are permitted. We exempt HHAs receiving Medicare certification after the period in which PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 HHAs do their patient count (April 1, 2013 through March 31, 2014) on or after April 1, 2014, from the full HHCAHPS reporting requirement for the CY 2016 APU, because these HHAs are not Medicare-certified throughout the period of April 1, 2013, through March 31, 2014. These HHAs do not need to complete a HHCAHPS Participation Exemption Request form for the CY 2016 APU. We require that all HHAs that had fewer than 60 HHCAHPS-eligible unduplicated or unique patients in the period of April 1, 2013 through March 31, 2014 request an exemption from the HHCAHPS data collection and submission requirements for the CY 2016 APU by completing the CY 2016 HHCAHPS Participation Exemption Request form. Agencies with fewer than 60 HHCAHPS-eligible, unduplicated or unique patients in the period of April 1, 2013, through March 31, 2014, are required to submit their patient counts on the HHCAHPS Participation Exemption Request form for the CY 2016 APU posted on https:// homehealthcahps.org from April 1, 2014, to 11:59 p.m., e.s.t. on March 31, 2015. This deadline for the exemption form is firm, as are all of the quarterly data submission deadlines. (5) HHCAHPS Requirements for the CY 2017 APU For the CY 2017 APU, we require continued monthly HHCAHPS data collection and reporting for 4 quarters. The data collection period for the CY 2017 APU includes the second quarter 2015 through the first quarter 2016 (the months of April 2015 through March 2016). HHAs are required to submit their HHCAHPS data files to the HHCAHPS Data Center for the second quarter 2015 by 11:59 p.m., e.d.t. on October 15, 2015; for the third quarter 2015 by 11:59 p.m., e.s.t. on January 21, 2016; for the fourth quarter 2015 by 11:59 p.m., e.d.t. on April 21, 2016; and for the first quarter 2016 by 11:59 p.m., e.d.t. on July 21, 2016. These deadlines are firm; no exceptions are permitted. We exempt HHAs receiving Medicare certification after the period in which HHAs do their patient count (April 1, 2014 through March 31, 2015) on or after April 1, 2015, from the full HHCAHPS reporting requirement for the CY 2016 APU, because these HHAs are not Medicare-certified throughout the period of April 1, 2014, through March 31, 2015. These HHAs do not need to complete a CY 2017 HHCAHPS Participation Exemption Request form. We require that all HHAs that had fewer than 60 HHCAHPS-eligible unduplicated or unique patients in the E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 period of April 1, 2014, through March 31, 2015 request an exemption from the HHCAHPS data collection and submission requirements for the CY 2017 APU by completing the CY 2017 HHCAHPS Participation Exemption Request form. Agencies with fewer than 60 HHCAHPS-eligible, unduplicated or unique patients in the period of April 1, 2014, through March 31, 2015, are required to submit their patient counts on the CY 2017 HHCAHPS Participation Exemption Request form posted on https://homehealthcahps.org from April 1, 2015, to 11:59 p.m., e.s.t. on March 31, 2016. This deadline for the exemption form is firm, as are all of the quarterly data submission deadlines. (6) HHCAHPS Reconsiderations and Appeals Process HHAs should always monitor their respective HHCAHPS survey vendors to ensure that vendors submit their HHCAHPS data on time, by accessing their HHCAHPS Data Submission Reports on https:// homehealthcahps.org. This helps HHAs ensure that their data are submitted in the proper format for data processing to the HHCAHPS Data Center. We continue HHCAHPS oversight activities as finalized in the previous rules. In the CY 2013 HH PPS final rule (77 FR 6704, 67164), we codified the current guideline that all approved HHCAHPS survey vendors must fully comply with all HHCAHPS oversight activities. We included this survey requirement at § 484.250(c)(3). We continue the HHCAHPS reconsiderations and appeals process that we have finalized and that we have used for all prior periods cited in the previous rules, and utilized in the CY 2012 through CY2014 annual payment update recommendations and determinations. We have described the HHCAHPS reconsiderations and appeals process requirements in the Technical Direction Letter that we send to the affected HHAs annually in September. HHAs have 30 days from their receipt of the Technical Direction Letter informing them that they did not meet the HHCAHPS requirements to reply to CMS with documentation that supports their requests for reconsideration of the annual payment update to CMS. It is important that the affected HHAs send in comprehensive information in their reconsideration letter/package because we will not contact the affected HHAs to request additional information or to clarify incomplete or inconclusive information. If clear evidence to support a finding of compliance is not present, then the 2 percent reduction in the APU will be upheld. If clear evidence of VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 compliance is present, then the 2 percent reduction for the APU will be reversed. We will notify affected HHAs by December 31st of the decisions that affect payments in the annual year beginning on January 1st. If we determine to uphold the 2 percent reduction for the annual payment update, the affected HHA may further appeal the 2 percent reduction via the Provider Reimbursement Review Board (PRRB) appeals process, which is described in the December letter. The following is a summary of the comments we received regarding HHCAHPS: Comment: A commenter stated that HHCAHPS is an unfunded administrative mandate that entails financial and resource burdens to HHAs. Response: This comment is outside the scope of the proposed rule. We finalized the collection of HHCAHPS in the CY2014 HH PPS Final Rule published in the Federal Register on December 2, 2013 (78 FR 72256). Please see the comments received and our responses on pages 72295 and 72296. Comment: A commenter stated that a more timely way of collecting and publicly reporting the HHCAHPS survey data needs to be developed. Response: We understand this concern to collect the data in a timely manner. This is why the patients are sampled in the month following the two months of their care. We have a very strict timetable for how the 42-day survey data collection period is to be implemented, as described in the HHCAHPS Protocols and Guidelines Manual that is posted on https:// homehealthcahps.org. We also allow time for the data received in from thousands of home health agencies to be processed and analyzed to ensure comparisons that are reliable and valid. We apply patient mix adjustment to the HHCAHPS data to allow for national comparisons. The best way to understand the reasons for our detailed survey implementation procedures is to examine the relevant sections in the HHCAHPS Protocols and Guidelines Manual which is posted on https:// homehealthcahps.org. HHAs may always request their respective HHCAHPS survey vendors to provide continual feedback on particular questions of the survey so that they are kept apprised of any issues that their patients are reporting on the HHCAHPS surveys. When HHAs contract with their vendors about the terms of their HHCAHPS data collection and processing processes, they may arrange for ways to receive survey feedback information in real-time. PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 66083 Final Decision: We are not recommending any changes as a result of comments we received. (7) For Further Information on the HHCAHPS Survey We strongly encourage HHAs to learn about the HHCAHPS Survey and to view the official Web site for HHCAHPS at https://homehealthcahps.org. For further information, HHAs may also send email correspondence to the HHCAHPS Survey Coordination Team at HHCAHPS@rti.org; or telephone tollfree (1–866–354–0985) for more information about HHCAHPS. 3. CY 2015 Home Health Wage Index a. Background Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the Secretary to provide appropriate adjustments to the proportion of the payment amount under the HH PPS that account for area wage differences, using adjustment factors that reflect the relative level of wages and wage-related costs applicable to the furnishing of HH services. Since the inception of the HH PPS, we have used inpatient hospital wage data in developing a wage index to be applied to HH payments. We proposed to continue this practice for CY 2015, as we continue to believe that, in the absence of HH-specific wage data, using inpatient hospital wage data is appropriate and reasonable for the HH PPS. Specifically, we proposed to continue to use the pre-floor, prereclassified hospital wage index as the wage adjustment to the labor portion of the HH PPS rates. For CY 2015, the updated wage data are for hospital cost reporting periods beginning on or after October 1, 2010 and before October 1, 2011 (FY 2011 cost report data). We will apply the appropriate wage index value to the labor portion of the HH PPS rates based on the site of service for the beneficiary (defined by section 1861(m) of the Act as the beneficiary’s place of residence). Previously, we determined each HHA’s labor market area based on definitions of metropolitan statistical areas (MSAs) issued by the Office of Management and Budget (OMB). In the CY 2006 HH PPS final rule (70 FR 68132), we adopted revised labor market area definitions as discussed in the OMB Bulletin No. 03– 04 (June 6, 2003). This bulletin announced revised definitions for MSAs and the creation of micropolitan statistical areas and core-based statistical areas (CBSAs). The bulletin is available online at www.whitehouse.gov/omb/bulletins/ b03–04.html. In adopting the CBSA E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66084 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations geographic designations, we provided a one-year transition in CY 2006 with a blended wage index for all sites of service. For CY 2006, the wage index for each geographic area consisted of a blend of 50 percent of the CY 2006 MSA-based wage index and 50 percent of the CY 2006 CBSA-based wage index. We referred to the blended wage index as the CY 2006 HH PPS transition wage index. As discussed in the CY 2006 HH PPS final rule (70 FR 68132), since the expiration of this one-year transition on December 31, 2006, we have used the full CBSA-based wage index values. In the CY 2015 HH PPS proposed rule, we proposed to continue to use the same methodology discussed in the CY 2007 HH PPS final rule (71 FR 65884) to address those geographic areas in which there are no inpatient hospitals, and thus, no hospital wage data on which to base the calculation of the CY 2015 HH PPS wage index. For rural areas that do not have inpatient hospitals, we would use the average wage index from all contiguous CBSAs as a reasonable proxy. For FY 2015, there are no rural geographic areas without hospitals for which we would apply this policy. For rural Puerto Rico, we would not apply this methodology due to the distinct economic circumstances that exist there (for example, due to the close proximity to one another of almost all of Puerto Rico’s various urban and non-urban areas, this methodology would produce a wage index for rural Puerto Rico that is higher than that in half of its urban areas). Instead, we would continue to use the most recent wage index previously available for that area. For urban areas without inpatient hospitals, we would use the average wage index of all urban areas within the state as a reasonable proxy for the wage index for that CBSA. For CY 2015, the only urban area without inpatient hospital wage data is Hinesville, Georgia (CBSA 25980). A summary of the comments we received regarding the wage index and our responses to those comments appears below. Comments on the specific proposal to use revised OMB delineations as part of the wage index are discussed further below. Comment: A commenter is concerned about the policy for imputing a rural wage index in instances where there is no hospital. The commenter is concerned about the impact for Texas and sizable rural areas, where some rural geographic areas that almost certainly do not have an inpatient hospital, but are significant metropolitan areas such as Dallas and Houston. The commenter asserts that VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 wage rates vary considerably in Texas between these urban and rural areas and urges CMS to be extremely cautious in this pursuit and analyze the effects of such assumptions in the methodology. Response: As stated previously, there are currently no rural areas without hospitals. Therefore, the wage index proxy is not applicable for any rural area in CY 2015. We appreciate the comment and assure the commenter that if the need for a rural wage index proxy should arise, we would re-evaluate the policy in order to avoid possible unintended consequences. As such, we would propose any potential revision to this policy through rulemaking. Comment: Commenters stated that hospitals have a competitive advantage in being able to apply for geographic reclassification to other CBSAs and being able to apply for the rural floor and that this creates a competitive advantage for hospitals in recruiting and retaining nurses and therapists. Commenters stated that the wage index can be very volatile with large decreases and increases in an area index value from one year to the next. Commenters stated that all provider sectors should use the same index with the same rights of reclassification, exceptions, and appeals. Commenters urged us to work with home health providers to develop regulatory and legislative remedies to the continuing problem of wage index disparity. One commenter stated that the same MSAs continue to be rewarded with higher wage indexes, while MSAs like Asheville, NC and rural NC continue to be penalized with lower wage indexes. This commenter states that the current system rewards MSAs that have inefficient and inappropriate hospital costs, and is very volatile with large decreases and increases in an MSA from one year to the next. One commenter noted that CMS is reviewing the entire wage index system and considering a move to a CommutingBased Wage Index that would set hospital-specific wage indices. The commenter urges CMS to expedite that review and implement a system that not only recognizes variations between localities, but also treats all provider types within a local market equitably. In the meantime, commenters urge CMS to implement an immediate policy to limit the wage index variations among provider types within CBSA’s and adjacent markets. Another stated that unexpected increases and decreases in wage index values should be spread over two or more years to reduce the rapid escalation or decline in wage index values and thus create more payment stability in a budget neutral fashion. The commenter specifically PO 00000 Frm 00054 Fmt 4701 Sfmt 4700 requests CMS respond to this broader recommendation. One commenter urged CMS to adjust the 2015 home health agency wage index to reflect a policy to limit the wage index disparity between provider types within a given CBSA to no more than 10%. Response: Consistent with our previous responses to these recurring comments (most recently published in the CY 2014 HH PPS final rule (78 FR 72302)), the regulations that govern the HH PPS do not provide a mechanism for allowing HHAs to seek geographic reclassification or to utilize the rural floor provisions that exist for IPPS hospitals. The rural floor provision in section 4410 of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105–33) is specific to hospitals. The reclassification provision found in section 1886(d)(10) of the Act is also specific to hospitals. CMS is exploring opportunities to reform the wage index. We refer readers to the CMS Web site at: www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ AcuteInpatientPPS/Wage-IndexReform.html). We do not believe it would be appropriate to limit wage index differences or changes which are above or below a given level or to spread changes in wage index values over multiple years. The wage index values are updated annually and applying these types of changes would make the area wage index less reflective of the geographic area’s wages. Comment: A commenter believes that linking home health wage index adjustments to the pre-floor, prereclassified hospital wage index may have been acceptable when this index only impacted the home health payment caps under cost reimbursement that most providers never reached. However, the commenter believes that this measure is imprecise to adjust every home health payment under HHPPS and creates clear and meaningful inaccuracies. Previously, CMS responded to this comment by citing a historical precedent of 20 years ago when a home health specific wage index was proposed by CMS as part of the payment capping mechanism and was opposed by many home health agencies. The commenter requests that CMS agree to collaborate with the home health community to develop a home health specific wage index based on current data on the wage categories used in home health care today and the related costs of this labor. An additional commenter also suggested that CMS pursue a home health specific wage index. Another commenter suggested that a new wage system could be E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations considered for non-hospital provider sectors. Response: Developing a wage index that utilizes data specific to HHAs would require us to engage resources in an audit process. In order to establish a home health specific wage index, we would need to collect data that is specific to home health services. This is not currently feasible due to the volatility of existing home health wage data and the significant amount of resources that would be required to improve the quality of that data. Furthermore, we believe the collection of home health specific wage data would place a significant amount of additional burden on HHAs. As discussed above, we continue to believe that in the absence of home health specific wage data, using the pre-floor, pre-reclassified hospital wage data is appropriate and reasonable for the HH PPS. Comment: A commenter expressed concern that when a hospital appeals or requests exceptions to what they believe are errors in the wage data, that corrections are not granted. The commenter asked us to reconsider this matter and believes that all providers should have the right to appeal or request exceptions when they suspect that there are errors in the data on which their rates will be based. Response: When a hospital submits an appeal of its wage data, CMS ensures that the appeal goes through the proper protocol and is given consideration. Not every appeal will warrant being granted. When appeals are valid, CMS take immediate action to correct the wage data and publish corrections to the wage indices for all provider types. Comment: A commenter is concerned that the home health wage index is based on inpatient hospital wage data, which in some cases contains errors that can result in significant fluctuations in the HHA wage index. Based on the Hospital Wage Index Development Timetable, there are specific deadlines for hospitals to report errors in the wage data to their MAC, CMS emphasizes that data that is incorrect in the preliminary hospital wage index data PUFs, but for which no correction request was received by the deadline, will not be changed for inclusion in the wage index. Another commenter stated that the inaction of a hospital or a mishandling of data by CMS or the MAC should not result in the lowering of an area’s wage index value and, therefore, lowering Medicare payments for all HHAs in the area. Other commenters stated that inaccurate cost report data results in unpredictable year to year swings in the wage index values. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 Commenters are concerned that HHAs are subject to a wage index database that they have no control over. As such, HHAs are at the mercy of hospital data submission and have no means to correct erroneous data or avoid the impact of any unusual compensation changes in a hospital. Response: We believe that the mechanisms we employ ensure the accuracy of the hospital cost report data and resulting wage index. Our contractors perform desk reviews of all hospital cost report Worksheet S–3 wage data. In addition, we perform edits on the wage data to further ensure the accuracy and validity of the wage data. Any provider may submit comments on the hospital wage index during the annual IPPS rulemaking. We believe that our review processes result in an accurate collection of wage data. Comment: A commenter requested that CMS remove six specific counties in New Jersey from the New York City wage index. Response: We believe that the OMB standards for delineating Metropolitan and Micropolitan Statistical Areas are appropriate for determining wage area differences. We do not believe it would be appropriate to make exceptions and carve out specific areas from the OMB delineations. The 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas were published in a Federal Register Notice on June 28, 2010 (75 FR 37246). Final Decision: After considering the comments received, for the reasons discussed above and in the CY 2015 HH PPS proposed rule (79 FR 38366), we are finalizing our proposal to continue to use the pre-floor, pre-reclassified hospital inpatient wage index data to develop the HH PPS wage index. For CY 2015, the updated wage data are for hospital cost reporting periods beginning on or after October 1, 2010 and before October 1, 2011 (FY 2011 cost report data). b. Update On February 28, 2013, OMB issued Bulletin No. 13–01, announcing revisions to the delineations of MSAs, Micropolitan Statistical Areas, and CBSAs, and guidance on uses of the delineation of these areas. This bulletin is available online at https:// www.whitehouse.gov/sites/default/files/ omb/bulletins/2013/b-13-01.pdf. This bulletin states that it ‘‘provides the delineations of all Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan Statistical Areas, Combined Statistical Areas, and New England City and Town Areas in the United States and Puerto Rico based PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 66085 on the standards published on June 28, 2010, in the Federal Register (75 FR 37246–37252) and Census Bureau data.’’ While the revisions OMB published on February 28, 2013 are not as sweeping as the changes made when we adopted the CBSA geographic designations for CY 2006, the February 28, 2013 bulletin does contain a number of significant changes. For example, there are new CBSAs, urban counties that have become rural, rural counties that have become urban, and existing CBSAs that have been split apart. As discussed in the CY 2014 HH PPS final rule (78 FR 72302), the changes made by the bulletin and their ramifications required extensive review by CMS before using them for the HH PPS wage index. We completed our assessment and in the FY 2015 IPPS final rule (79 FR 49854), and stated that we will use the most recent labor market area delineations issued by OMB for payments for inpatient stays at general acute care and long-term care hospitals (LTCHs). In addition, in the FY 2015 Skilled Nursing Facility (SNF) PPS final rule (79 FR 45628), we made a final decision to use the new labor market delineations issued by OMB for payments for SNFs. c. Implementation of New Labor Market Delineations We believe it is important for the HH PPS to use the latest OMB delineations available to maintain a more accurate and up-to-date payment system that reflects the reality of population shifts and labor market conditions. While CMS and other stakeholders have explored potential alternatives to the current CBSA-based labor market system (we refer readers to the CMS Web site at www.cms.gov/Medicare/ Medicare-Fee-for-Service-Payment/ AcuteInpatientPPS/Wage-IndexReform.html), no consensus has been achieved regarding how best to implement a replacement system. As discussed in the FY 2005 IPPS final rule (69 FR 49027), ‘‘While we recognize that MSAs are not designed specifically to define labor market areas, we believe they do represent a useful proxy for this purpose.’’ We further believe that using the most current OMB delineations will increase the integrity of the HH PPS wage index by creating a more accurate representation of geographic variation in wage levels. We have reviewed our findings and impacts relating to the new OMB delineations, and have concluded that there is no compelling reason to further delay implementation. We proposed to incorporate the new CBSA delineations into the CY 2015 HH PPS wage index in the same manner in E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66086 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations which the CBSAs were first incorporated into the HH PPS wage index in CY 2006 (70 FR 68138). We proposed to use a one-year blended wage index for CY 2015. We referred to this blended wage index as the CY 2015 HH PPS transition wage index. The proposed transition wage index would consist of a 50/50 blend of the wage index values using OMB’s old area delineations and the wage index values using OMB’s new area delineations. That is, for each county, a blended wage index would be calculated equal to fifty percent of the CY 2015 wage index using the old labor market area delineation and fifty percent of the CY 2015 wage index using the new labor market area delineation (both using FY 2011 hospital wage data). This ultimately results in an average of the two values. The comments we received on the proposal to include the newest OMB area delineations into the HH PPS wage index and the proposed wage index transition methodology and our responses to these comments, appear below: Comment: Some commenters have reservations about CMS’s proposal to adopt revisions to the CBSAs developed by the Census Bureau and OMB. Commenters strongly support a phasedin approach to provide a more uniform and equitable transition for providers impacted by the CBSA revisions. Commenters believe that a phased-in approach will mitigate short-term financial instability and better align OMB’s labor market areas with the actual labor costs of provider organizations. Response: While CMS and other stakeholders have explored potential alternatives to the current CBSA-based labor market system (we refer readers to the CMS Web site at: www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS/WageIndex-Reform.html), no consensus has been achieved regarding how best to implement a replacement system. As stated in the FY 2005 IPPS final rule (69 FR 49027), while we recognize that MSAs are not designed specifically to define labor market areas, we believe they do represent a useful proxy for this purpose. We believe that using the most current OMB delineations would increase the integrity of the HH PPS wage index by creating a more accurate representation of geographic variation in wage levels. We believe that the most current OMB delineations accurately reflect the local economies and wage levels of the areas in which hospitals are currently located. In the CY 2015 HH PPS proposed rule, we proposed a VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 transition period of one year, during which a 50/50 blended wage index would be used for all providers in CY 2015, in order to mitigate the resulting short-term instability and negative impacts on certain providers and to provide time for providers to adjust to their new labor market delineations. Under this proposal, providers would receive 50 percent of their FY 2015 wage index based on the new OMB delineations and 50 percent of their FY 2015 wage index based on the labor market delineations for CY 2014 (both using FY 2011 hospital wage data). Comment: Most commenters support using a 50/50 blend of the current CBSA areas with the new CBSA areas as a way of easing the transition to the new geographic area designations. A commenter supports the budget neutrality adjustment to account for changes in the wage indices. Response: We thank the commenters for their support of these two policies. Comment: While a commenter commends CMS on the proposed wage index phase-in, which should afford home health providers time to adjust their budgets, expenses and operations, the commenter also recommends that home health providers that have been negatively impacted in such reclassified areas be permitted to seek a hardship exception or additional phase-in period. Such measures could be used in the event providers find that the characteristics of their operating areas remain representative of rural communities. This will help ensure that beneficiary access to home health services in such areas is not stifled or significantly negatively impacted. Response: We do not believe that the adoption of the OMB’s new area delineations will impact HHAs that provide care to beneficiaries who are located in areas whose delineations have changed to such an extent that the HHAs will no longer be able to provide care in their current locale. As always, we continue to monitor home health utilization to determine if there are any problems related to beneficiary access to care. Comment: A commenter states that CMS’ one-year transition policy of using a 50/50 blend of the previous and updated CBSA values is inconsistent with CMS’ policy published in the Inpatient Prospective Payment System (IPPS) and Long- Term Acute Care Hospital-Prospective Payment System (LTCH–PPS) final rule. That rule applies a one-year 50/50 blending of the previous and updated CBSA values, respectively, only to facilities whose payments will decrease based on the use of the updated CBSAs. This PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 inconsistency unfairly penalizes home health agencies that would benefit from applying the new CBSA delineations exclusively. Consequently, the commenter recommends that CMS apply the one-year 50/50 blend to any agencies experiencing a decrease in their payments, but utilize the new CBSA delineations for those agencies that will experience an increase in their Medicare payments. In contrast, another commenter stated that while the current requirement to maintain budget neutrality means that some agencies will not immediately see the full increases in their wage index values to reduce the impact of those with decreases, the commenter believes this is a worthwhile trade-off to assure that those agencies who would otherwise suffer sudden and significant payment declines. Response: The implementation of the revised OMB delineations, which we are finalizing in this rule, sets home health payments at a level that more accurately reflects the costs of labor in a geographic area. Accordingly, under this policy, HHAs will experience a decrease from their current wage index only to the extent that their current wage index value actually exceeds what the latest area wage data warrants using the revised OMB delineations, and they will experience an increase from their current wage index value to the extent that their current wage index value is less than what the latest area wage data warrants using the revised OMB delineations. As discussed in the CY 2015 HH PPS proposed rule (79 FR 38416), we considered whether or not the blended wage index should be used for all HHAs or for only a subset of HHAs, such as those HHAs that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations. If we were to apply the transition policy only to those HHAs that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations, the wage index budget neutrality factor, discussed in section III.D.4, would result in reduced base rates for all HHAs as compared to the budget neutrality factor that results from applying the blended wage index to all HHAs. We believe that our proposal to apply a one-year blended wage index in CY 2015 for all geographic areas appropriately balances the interests of all HHAs and would best achieve our objective of providing relief to negatively impacted HHAs. Final Decision: For the reasons previously discussed, we are finalizing our proposal to include changes to the E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations HH PPS wage index based on the newest OMB area delineations and to apply a one-year blended wage index in CY 2015 for all geographic areas to assist providers in adapting to these changes. This transition policy will be in effect for a one-year period, beginning January 1, 2015, and continuing through December 31, 2015. Thus, beginning January 1, 2016, the wage index for all HH PPS payments will be fully based on the new OMB delineations. The wage index Addendum provides a crosswalk between the CY 2015 wage index using the current OMB delineations in effect in CY 2014 and the CY 2015 wage index using the revised OMB delineations. Addendum A shows each state and county and its corresponding transition wage index along with the previous CBSA number, the new CBSA number and the new CBSA name. Due to the calculation of the blended transition wage index, some CBSAs may have more than one transition wage index value associated with that CBSA. However, each county will have only one transition wage index. Therefore, for counties located in CBSAs that correspond to more than one transition wage index, a number other than the CBSA number will need to be input on the claim for CY 2015 only. These numbers are shown in the last column of Addendum A. The final CY 2015 transition wage index as set forth in Addendum A is available on the CMS Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/HomeHealthPPS/HomeHealth-Prospective-Payment-SystemRegulations-and-Notices.html 4. CY 2015 Annual Payment Update tkelley on DSK3SPTVN1PROD with RULES2 a. Background The Medicare HH PPS has been in effect since October 1, 2000. As set forth in the July 3, 2000 final rule (65 FR 41128), the base unit of payment under the Medicare HH PPS is a national, standardized 60-day episode payment rate. As set forth in 42 CFR 484.220, we adjust the national, standardized 60-day episode payment rate by a case-mix relative weight and a wage index value based on the site of service for the beneficiary. To provide appropriate adjustments to the proportion of the payment amount under the HH PPS to account for area wage differences, we apply the appropriate wage index value to the labor portion of the HH PPS rates. The labor-related share of the case-mix adjusted 60-day episode rate will continue to be 78.535 percent and the non-labor-related share will continue to be 21.465 percent as set out in the CY VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 2013 HH PPS final rule (77 FR 67068). The CY 2015 HH PPS rates will use the same case-mix methodology as set forth in the CY 2008 HH PPS final rule with comment period (72 FR 49762) and adjusted as described in section III.C. of this rule. The following are the steps we take to compute the case-mix and wageadjusted 60-day episode rate: (1) Multiply the national 60-day episode rate by the patient’s applicable case-mix weight. (2) Divide the case-mix adjusted amount into a labor (78.535 percent) and a non-labor portion (21.465 percent). (3) Multiply the labor portion by the applicable wage index based on the site of service of the beneficiary. (4) Add the wage-adjusted portion to the non-labor portion, yielding the casemix and wage adjusted 60-day episode rate, subject to any additional applicable adjustments. In accordance with section 1895(b)(3)(B) of the Act, this document constitutes the annual update of the HH PPS rates. Section 484.225 sets forth the specific annual percentage update methodology. In accordance with § 484.225(i), for a HHA that does not submit HH quality data, as specified by the Secretary, the unadjusted national prospective 60-day episode rate is equal to the rate for the previous calendar year increased by the applicable HH market basket index amount minus two percentage points. Any reduction of the percentage change will apply only to the calendar year involved and will not be considered in computing the prospective payment amount for a subsequent calendar year. Medicare pays the national, standardized 60-day case-mix and wageadjusted episode payment on a split percentage payment approach. The split percentage payment approach includes an initial percentage payment and a final percentage payment as set forth in § 484.205(b)(1) and § 484.205(b)(2). We may base the initial percentage payment on the submission of a request for anticipated payment (RAP) and the final percentage payment on the submission of the claim for the episode, as discussed in § 409.43. The claim for the episode that the HHA submits for the final percentage payment determines the total payment amount for the episode and whether we make an applicable adjustment to the 60-day case-mix and wage-adjusted episode payment. The end date of the 60-day episode as reported on the claim determines which calendar year rates Medicare will use to pay the claim. We may also adjust the 60-day casemix and wage-adjusted episode PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 66087 payment based on the information submitted on the claim to reflect the following: • A low-utilization payment adjustment (LUPA) is provided on a pervisit basis as set forth in § 484.205(c) and § 484.230. • A partial episode payment (PEP) adjustment as set forth in § 484.205(d) and § 484.235. • An outlier payment as set forth in § 484.205(e) and § 484.240. b. CY 2015 National, Standardized 60Day Episode Payment Rate Section 1895(3)(A)(i) of the Act required that the 60-day episode base rate and other applicable amounts be standardized in a manner that eliminates the effects of variations in relative case mix and area wage adjustments among different home health agencies in a budget neutral manner. To determine the CY 2015 national, standardized 60-day episode payment rate, we will apply a wage index standardization factor, a case-mix budget neutrality factor described in section III.C, the rebasing adjustment described in section II.C, and the MFPadjusted home health market basket update discussed in section III.D.1 of this final rule. To calculate the wage index standardization factor, henceforth referred to as the wage index budget neutrality factor, we simulated total payments for non-LUPA episodes using the 2015 wage index and compared it to our simulation of total payments for non-LUPA episodes using the 2014 wage index. By dividing the total payments for non-LUPA episodes using the 2015 wage index by the total payments for non-LUPA episodes using the 2014 wage index, we obtain a wage index budget neutrality factor of 1.0024. We will apply the wage index budget neutrality factor of 1.0024 to the CY 2015 national, standardized 60-day episode rate. As discussed in section III.C of this final rule, to ensure the changes to the case-mix weights are implemented in a budget neutral manner, we will apply a case-mix weights budget neutrality factor to the CY 2015 national, standardized 60-day episode payment rate. The case-mix weights budget neutrality factor is calculated as the ratio of total payments when CY 2015 case-mix weights are applied to CY 2013 utilization (claims) data to total payments when CY 2014 case-mix weights are applied to CY 2013 utilization data. The case-mix budget neutrality factor for CY 2015 will be 1.0366 as described in section III.C of this final rule. E:\FR\FM\06NOR2.SGM 06NOR2 66088 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Then, we will apply the ¥$80.95 rebasing adjustment finalized in the CY 2014 HH PPS final rule (78 FR 72256) and discussed in section II.C. Lastly, we will update the payment rates by the CY 2015 HH payment update percentage of 2.1 percent (MFP-adjusted home health market basket update) as described in section III.D.1 of this final rule. The CY 2015 national, standardized 60-day episode payment rate will be $2,961.38 as calculated in Table 22. TABLE 22—CY 2015 60-DAY NATIONAL, STANDARDIZED 60-DAY EPISODE PAYMENT AMOUNT CY 2014 National, standardized 60-day episode payment Wage index budget neutrality factor Case-mix weights budget neutrality factor CY 2015 Rebasing adjustment CY 2015 HH Payment update percentage CY 2015 National, standardized 60-day episode payment $2,869.27 ×; 1.0024 ×; 1.0366 ¥$80.95 ×; 1.021 = $2,961.38 The CY 2015 national, standardized 60-day episode payment rate for an HHA that does not submit the required quality data is updated by the CY 2015 HH payment update (2.1 percent) minus 2 percentage points and is shown in Table 23. TABLE 23—FOR HHAS THAT DO NOT SUBMIT THE QUALITY DATA—CY 2015 NATIONAL, STANDARDIZED 60-DAY EPISODE PAYMENT AMOUNT CY 2014 National, standardized 60-day episode payment Wage index budget neutrality factor $2,869.27 ×; 1.0024 CY 2015 Rebasing adjustment ×; 1.0366 c. National Per-Visit Rates The national per-visit rates are used to pay LUPAs (episodes with four or fewer visits) and are also used to compute imputed costs in outlier calculations. The per-visit rates are paid by type of visit or HH discipline. The six HH disciplines are as follows: • Home health aide (HH aide); • Medical Social Services (MSS); • Occupational therapy (OT); • Physical therapy (PT); • Skilled nursing (SN); and • Speech-language pathology (SLP). To calculate the CY 2015 national pervisit rates, we start with the CY 2014 national per-visit rates. We then apply a wage index budget neutrality factor to ensure budget neutrality for LUPA per- CY 2015 HH Payment update percentage minus 2 percentage points CY 2015 National, standardized 60-day episode payment ¥$80.95 Case-mix weights budget neutrality factor ×; 1.001 = $2,903.37 visit payments and increase each of the six per-visit rates by the maximum rebasing adjustments described in section II.C. of this rule. We calculate the wage index budget neutrality factor by simulating total payments for LUPA episodes using the 2015 wage index and comparing it to simulated total payments for LUPA episodes using the 2014 wage index. By dividing the total payments for LUPA episodes using the 2015 wage index by the total payments for LUPA episodes using the 2014 wage index, we obtain a wage index budget neutrality factor of 1.0012. We will apply the wage index budget neutrality factor of 1.0012 to the CY 2015 national per-visit rates. The LUPA per-visit rates are not calculated using case-mix weights. Therefore, there is no case-mix weights budget neutrality factor needed to ensure budget neutrality for LUPA payments. Finally, the per-visit rates for each discipline are updated by the CY 2015 HH payment update percentage of 2.1 percent. The national per-visit rates are adjusted by the wage index based on the site of service of the beneficiary. The per-visit payments for LUPAs are separate from the LUPA add-on payment amount, which is paid for episodes that occur as the only episode or initial episode in a sequence of adjacent episodes. The CY 2015 national per-visit rates are shown in Tables 24 and 25. TABLE 24—CY 2015 NATIONAL PER-VISIT PAYMENT AMOUNTS FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY DATA CY 2014 Per-visit payment tkelley on DSK3SPTVN1PROD with RULES2 HH Discipline type Home Health Aide .......................................................................... Medical Social Services ................................................................. Occupational Therapy .................................................................... Physical Therapy ........................................................................... Skilled Nursing ............................................................................... Speech-Language Pathology ......................................................... VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00058 Fmt 4701 $54.84 194.12 133.30 132.40 121.10 143.88 Sfmt 4700 Wage index budget neutrality factor ×; ×; ×; ×; ×; ×; CY 2015 Rebasing adjustment 1.0012 1.0012 1.0012 1.0012 1.0012 1.0012 E:\FR\FM\06NOR2.SGM + $1.79 + $6.34 + $4.35 + $4.32 + $3.96 + 4.70 06NOR2 CY 2015 HH Payment update percentage ×; ×; ×; ×; ×; ×; 1.021 1.021 1.021 1.021 1.021 1.021 CY 2015 Per-visit payment $57.89 204.91 140.70 139.75 127.83 151.88 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations The CY 2015 per-visit payment rates for an HHA that does not submit the required quality data are updated by the CY 2015 HH payment update (2.1 66089 percent) minus 2 percentage points and is shown in Table 25. TABLE 25—CY 2015 NATIONAL PER-VISIT PAYMENT AMOUNTS FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA Wage index budget neutrality factor CY 2014 Per-visit rates HH Discipline type Home Health Aide .......................................................................... Medical Social Services ................................................................. Occupational Therapy .................................................................... Physical Therapy ........................................................................... Skilled Nursing ............................................................................... Speech-Language Pathology ......................................................... d. Low-Utilization Payment Adjustment (LUPA) Add-On Factors LUPA episodes that occur as the only episode or as an initial episode in a sequence of adjacent episodes are adjusted by applying an additional amount to the LUPA payment before adjusting for area wage differences. In the CY 2014 HH PPS final rule, we changed the methodology for calculating the LUPA add-on amount by finalizing the use of three LUPA add-on factors: 1.8451 for SN; 1.6700 for PT; and 1.6266 for SLP (78 FR 72306). We multiply the per-visit payment amount for the first SN, PT, or SLP visit in $54.84 194.12 133.30 132.40 121.10 143.88 ×; ×; ×; ×; ×; ×; CY 2015 Rebasing adjustment 1.0012 1.0012 1.0012 1.0012 1.0012 1.0012 LUPA episodes that occur as the only episode or an initial episode in a sequence of adjacent episodes by the appropriate factor to determine the LUPA add-on payment amount. For example, for LUPA episodes that occur as the only episode or an initial episode in a sequence of adjacent episodes, if the first skilled visit is SN, the payment for that visit will be $235.86 (1.8451 multiplied by $127.83), subject to area wage adjustment. e. Non-Routine Medical Supply (NRS) Conversion Factor Update Payments for NRS are computed by multiplying the relative weight for a + $1.79 + $6.34 + $4.35 + $4.32 + $3.96 + 4.70 CY 2015 HH Payment update percentage minus 2 percentage points ×; ×; ×; ×; ×; ×; CY 2015 Per-visit rates 1.001 1.001 1.001 1.001 1.001 1.001 $56.75 200.89 137.95 137.02 125.33 148.90 particular severity level by the NRS conversion factor. To determine the CY 2015 NRS conversion factor, we start with the 2014 NRS conversion factor ($53.65) and apply the ¥2.82 percent rebasing adjustment described in section II.C. of this rule (1 ¥ 0.0282 = 0.9718). We then update the conversion factor by the CY 2015 HH payment update percentage (2.1 percent). We do not apply a standardization factor as the NRS payment amount calculated from the conversion factor is not wage or case-mix adjusted when the final claim payment amount is computed. The NRS conversion factor for CY 2015 is shown in Table 26. TABLE 26—CY 2015 NRS CONVERSION FACTOR FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY DATA CY 2014 NRS Conversion factor CY 2015 Rebasing adjustment CY 2015 HH Payment update percentage CY 2015 NRS Conversion factor $53.65 ×; 0.9718 ×; 1.021 = $53.23 Using the CY 2015 NRS conversion factor, the payment amounts for the six severity levels are shown in Table 27. TABLE 27—CY 2015 NRS PAYMENT AMOUNTS FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY DATA tkelley on DSK3SPTVN1PROD with RULES2 Severity level 1 2 3 4 5 6 ........................................................................................ ........................................................................................ ........................................................................................ ........................................................................................ ........................................................................................ ........................................................................................ For HHAs that do not submit the required quality data, we again begin with the CY 2014 NRS conversion factor ($53.65) and apply the ¥-2.82 percent VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 Relative weight Points (scoring) 0 ....................................................................................... 1 to 14 .............................................................................. 15 to 27 ............................................................................ 28 to 48 ............................................................................ 49 to 98 ............................................................................ 99+ ................................................................................... rebasing adjustment discussed in section II.C of this final rule (1 ¥ 0.0282 = 0.9718). We then update the NRS conversion factor by the CY 2015 HH PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 0.2698 0.9742 2.6712 3.9686 6.1198 10.5254 CY 2015 NRS Payment amounts $14.36 51.86 142.19 211.25 325.76 560.27 payment update percentage (2.1 percent) minus 2 percentage points. The CY 2015 NRS conversion factor for E:\FR\FM\06NOR2.SGM 06NOR2 66090 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations HHAs that do not submit quality data is shown in Table 28. TABLE 28—CY 2015 NRS CONVERSION FACTOR FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA CY 2014 NRS conversion factor CY 2015 rebasing adjustment CY 2015 HH payment update percentage minus 2 percentage points CY 2015 NRS conversion factor $53.65 ×; 0.9718 ×; 1.001 $52.19 The payment amounts for the various severity levels based on the updated conversion factor for HHAs that do not submit quality data are calculated in Table 29. TABLE 29—CY 2015 NRS PAYMENT AMOUNTS FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA Points (scoring) Severity level 1 2 3 4 5 6 ........................................................................................ ........................................................................................ ........................................................................................ ........................................................................................ ........................................................................................ ........................................................................................ tkelley on DSK3SPTVN1PROD with RULES2 f. Rural Add-On Section 421(a) of the MMA required, for HH services furnished in a rural areas (as defined in section 1886(d)(2)(D) of the Act), for episodes or visits ending on or after April 1, 2004, and before April 1, 2005, that the Secretary increase the payment amount that otherwise will have been made under section 1895 of the Act for the services by 5 percent. Section 5201 of the DRA amended section 421(a) of the MMA. The amended section 421(a) of the MMA required, for HH services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act), on or after January 1, 2006 and before January 1, 2007, that the Secretary increase the payment amount otherwise made under section 1895 of the Act for those services by 5 percent. Section 3131(c) of the Affordable Care Act amended section 421(a) of the MMA to provide an increase of 3 percent of the payment amount otherwise made under section 1895 of the Act for HH services furnished in a rural area (as defined in section 1886(d)(2)(D) of the Act), for episodes and visits ending on or after April 1, 2010, and before January 1, 2016. Section 421 of the MMA, as amended, waives budget neutrality related to this provision, as the statute specifically states that the Secretary shall not reduce the standard prospective payment amount (or amounts) under section 1895 of the Act applicable to HH services VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 0 ....................................................................................... 1 to 14 .............................................................................. 15 to 27 ............................................................................ 28 to 48 ............................................................................ 49 to 98 ............................................................................ 99+ ................................................................................... furnished during a period to offset the increase in payments resulting in the application of this section of the statute. The comments we received regarding the rural add-on, along with our responses, appear below: Comment: One commenter questioned why the rural add-on will not apply after CY 2015. Several commenter urged CMS to not eliminate the rural add-on scheduled to sunset on December 31, 2015. A commenter stated that CMS should conduct a separate and comprehensive impact analysis on what the impact of elimination of the ruraladd would have in the availability of home health services in rural areas. Another commenter asked if CMS would encourage the continuation of the rural add-on for the indefinite future beyond 2016. Response: The rural add-on is a legislative provision, mandated by the Affordable Care Act, and CMS does not have the authority to revise the date at which the rural add-on expires. Since the inception of the HH PPS, at various points in time, rural add-ons have been applied to home health payments due to legislation. These rural add-ons have not been subject to budget neutrality. If CMS were to propose a regulatory policy change to provide a rural add-on payment, we would have to apply the add-on in a budget neutral manner and adjust (decrease) other components of the payment rates. Comment: A commenter suggests that CMS should investigate the impact of a PO 00000 Relative weight Frm 00060 Fmt 4701 Sfmt 4700 0.2698 0.9742 2.6712 3.9686 6.1198 10.5254 CY 2015 NRS payment amounts $ 14.08 50.84 139.41 207.12 319.39 549.32 applying a population density adjustment factor to the rates. This adjustment factor would increase payments in less densely populated areas (primarily rural) to offset higher costs of providing care in rural areas. These costs include increases in transportation costs and the scarcity of skilled professionals in rural areas. The commenter states that an increase to rural payments rates is necessary as rural wage indices are uniformly lower than urban wage indices. Response: We do not have evidence that a population density adjustment is appropriate. While rural HHAs cite the added cost of long distance travel to provide care for their patients, urban HHAs cite added costs associated with needed security measures and traffic congestion. In regard to the commenters assertion that rural wage indices are uniformly lower than urban wage indices, our analysis shows that almost 18 percent of urban wage index values are less than the rural wage index in the corresponding state. Comment: Commenters recommend that the rural add-on should apply for at least one year for services provided to beneficiaries in counties that are transitioning from rural to urban status for wage index purposes. Other commenters requested that CMS clarify which areas qualify for the rural add-on on as numerous areas lose rural status under the new CBSAs. Some commenters state that in 2006 when CMS blended MSA and CBSA regions as E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations part of a comparable wage index transition policy, CMS applied the rural add-on for both patients residing in a non-MSA and non-CBSA area. In other words, the rural add-on applied in the rural areas under the old MSA designations as well as the new CBSA designations during the transition year. Response: When we implemented OMB revised delineations in CY 2006, we applied the rural add-on to counties in non-CBSA areas. If a county had been previously classified as rural but changed to urban classification under the new CBSAs, the rural add-on was not applied. The commenters who stated that CMS applied the rural addon for patients residing in non-MSA areas and patients residing in non-CBSA areas are mistaken. This policy was implemented in CMS Transmittal 887 which was published on March 10, 2006. In order to remain consistent with our previous policy for applying the rural add-on, we would implement the rural add-on in the same manner for CY 2015. That is, only counties that are classified as rural under the new area delineations would receive the rural add-on. As stated previously, we believe that this method of adopting the most current OMB delineations would increase the integrity of the wage index as it is a more accurately represents geographic variation in wage levels. Comment: One commenter recommended that CMS adopt the same definition of a ‘‘rural’’ area that is used by the Federal Office of Rural Health (ORH). The commenter states that the ORH explicitly recognizes that ‘‘the New England states require special consideration as ‘‘their geographic divisions are different than typical counties.’’ There are many towns within Massachusetts that are very rural, yet they lie within large counties that are designated a CBSA based on the fact that there is a small city within that county. The commenter recommended that CMS modify the CBSA approach to recognize rural census tracts within large counties. Response: In the CY 2015 HH PPS proposed rule, we did not propose alternatives to the use of CBSAs, which were adopted in the CY 2006 HH PPS final rule, to classify areas as ‘‘rural’’ for wage adjustment purposes. In the CY 2006 HH PPS final rule (70 FR 68132), we proposed and finalized the adoption of revised labor market area definitions as discussed in the OMB Bulletin No. 03–04 (June 6, 2003). This bulletin announced revised definitions for MSAs and the creation of micropolitan 66091 statistical areas and core-based statistical areas (CBSAs). Comment: A commenter requested that CMS disclose the areas that would lose their rural status under the new CBSAs. Response: We provided several tables in the CY 2015 HH PPS proposed rule (79 FR 38392–38395) which display the counties whose status will change if we finalize our proposal to adopt the new OMB delineations. Table 13 shows the 37 counties that would change from urban to rural status. Table 14 shows the 105 counties that would change from rural to urban status. Lastly, Table 15 displays the 46 urban counties that would move from one urban CBSA to another urban CBSA. Final Decision: For CY 2015, home health payment rates for services provided to beneficiaries in areas that are defined as rural under the new OMB delineations will be increased by 3 percent as mandated by section 3131(c) of the Affordable Care Act. The 3 percent rural add-on is applied to the national, standardized 60-day episode payment rate, national per visit rates, and NRS conversion factor when HH services are provided in rural (nonCBSA) areas. Refer to Tables 30 through 33 for these payment rates. TABLE 30—CY 2015 PAYMENT AMOUNTS FOR 60-DAY EPISODES FOR SERVICES PROVIDED IN A RURAL AREA For HHAs that DO submit quality °Data For HHAs that DO NOT submit quality data CY 2015 national, standardized 60-day episode payment rate Multiply by the 3 percent rural add-on CY 2015 rural national, standardized 60-day pisode payment rate CY 2015 national, standardized 60-day episode payment rate Multiply by the 3 percent rural add-on CY 2015 rural national, standardized 60-day episode payment rate $2,961.38 ............................................................................. ×; 1.03 $3,050.22 $2,903.37 ×; 1.03 $2,990.47 TABLE 31—CY 2015 PER-VISIT AMOUNTS FOR SERVICES PROVIDED IN A RURAL AREA For HHAs that DO submit quality data HH Discipline type CY 2015 per-visit rate HH Aide .................................................... MSS ......................................................... OT ............................................................ PT ............................................................. SN ............................................................ SLP .......................................................... Multiply by the 3 percent rural add-on $57.89 204.91 140.70 139.75 127.83 151.88 ×; ×; ×; ×; ×; ×; For HHAs that DO NOT submit quality data CY 2015 per-visit rate $59.63 211.06 144.92 143.94 131.66 156.44 1.03 1.03 1.03 1.03 1.03 1.03 CY 2015 rural per-visit rates Multiply by the 3 percent rural add-on $56.75 200.89 137.95 137.02 125.33 148.90 ×; ×; ×; ×; ×; ×; 1.03 1.03 1.03 1.03 1.03 1.03 CY 2015 rural per-visit rates $58.45 206.92 142.09 141.13 129.09 153.37 tkelley on DSK3SPTVN1PROD with RULES2 TABLE 32—CY 2015 NRS CONVERSION FACTOR FOR SERVICES PROVIDED IN RURAL AREAS For HHAs that DO submit quality data For HHAs that DO NOT submit quality data CY 2015 conversion factor Multiply by the 3 percent rural add-on CY 2015 rural NRS conversion factor CY 2015 Conversion factor Multiply by the 3 percent rural add-on CY 2015 rural NRS conversion factor $53.23 .................................................................................. ×; 1.03 $54.83 $52.19 ×; 1.03 $53.76 VerDate Sep<11>2014 20:42 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00061 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 66092 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations TABLE 33—CY 2015 NRS PAYMENT AMOUNTS FOR SERVICES PROVIDED IN RURAL AREAS For HHAs that DO submit quality data (CY 2015 NRS Conversion Factor = $54.83) Points (scoring) Severity level Relative weight 1 2 3 4 5 6 ............................................................ ............................................................ ............................................................ ............................................................ ............................................................ ............................................................ 0 ........................................................... 1 to 14 .................................................. 15 to 27 ................................................ 28 to 48 ................................................ 49 to 98 ................................................ 99+ ....................................................... tkelley on DSK3SPTVN1PROD with RULES2 E. Payments for High-Cost Outliers Under the HH PPS 1. Background Section 1895(b)(5) of the Act allows for the provision of an addition or adjustment to the national, standardized 60-day case-mix and wage-adjusted episode payment amounts in the case of episodes that incur unusually high costs due to patient care needs. Prior to the enactment of the Affordable Care Act, section 1895(b)(5) of the Act stipulated that projected total outlier payments could not exceed 5 percent of total projected or estimated HH payments in a given year. In the Medicare Program; Prospective Payment System for Home Health Agencies final rule (65 FR 41188 through 41190), we described the method for determining outlier payments. Under this system, outlier payments are made for episodes whose estimated costs exceed a threshold amount for each HH Resource Group (HHRG). The episode’s estimated cost is the sum of the national wage-adjusted per-visit payment amounts for all visits delivered during the episode. The outlier threshold for each case-mix group or PEP adjustment is defined as the 60-day episode payment or PEP adjustment for that group plus a fixeddollar loss (FDL) amount. The outlier payment is defined to be a proportion of the wage-adjusted estimated cost beyond the wage-adjusted threshold. The threshold amount is the sum of the wage and case-mix adjusted PPS episode amount and wage-adjusted FDL amount. The proportion of additional costs over the outlier threshold amount paid as outlier payments is referred to as the loss-sharing ratio. In the CY 2010 HH PPS final rule (74 FR 58080 through 58087), we discussed excessive growth in outlier payments, primarily the result of unusually high outlier payments in a few areas of the country. Despite program integrity efforts associated with excessive outlier VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 0.2698 0.9742 2.6712 3.9686 6.1198 10.5254 payments in targeted areas of the country, we discovered that outlier expenditures still exceeded the 5 percent, target and, in the absence of corrective measures, would continue do to so. Consequently, we assessed the appropriateness of taking action to curb outlier abuse. To mitigate possible billing vulnerabilities associated with excessive outlier payments and adhere to our statutory limit on outlier payments, we adopted an outlier policy that included a 10 percent agency-level cap on outlier payments. This cap was implemented in concert with a reduced FDL ratio of 0.67. These policies resulted in a projected target outlier pool of approximately 2.5 percent. (The previous outlier pool was 5 percent of total HH expenditure). For CY 2010, we first returned 5 percent of these dollars back into the national, standardized 60day episode rates, the national per-visit rates, the LUPA add-on payment amount, and the NRS conversion factor. Then, we reduced the CY 2010 rates by 2.5 percent to account for the new outlier pool of 2.5 percent. This outlier policy was adopted for CY 2010 only. As we noted in the CY 2011 HH PPS final rule (75 FR 70397 through 70399), section 3131(b)(1) of the Affordable Care Act amended section 1895(b)(3)(C) of the Act. As amended, ‘‘Adjustment for outliers,’’ states that ‘‘The Secretary shall reduce the standard prospective payment amount (or amounts) under this paragraph applicable to HH services furnished during a period by such proportion as will result in an aggregate reduction in payments for the period equal to 5 percent of the total payments estimated to be made based on the prospective payment system under this subsection for the period.’’ In addition, section 3131(b)(2) of the Affordable Care Act amended section 1895(b)(5) of the Act by re-designating the existing language as section 1895(b)(5)(A) of the Act, and revising it to state that the PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 CY 2015 NRS Payment amounts for rural areas $14.79 53.42 146.46 217.60 335.55 577.11 For HHAs that DO NOT submit quality data (CY 2015 NRS Conversion Factor = $53.76) Relative weight 0.2698 0.9742 2.6712 3.9686 6.1198 10.5254 CY 2015 NRS Payment amounts for rural areas $14.50 52.37 143.60 213.35 329.00 565.85 Secretary, ‘‘subject to [a 10 percent program-specific outlier cap], may provide for an addition or adjustment to the payment amount otherwise made in the case of outliers because of unusual variations in the type or amount of medically necessary care. The total amount of the additional payments or payment adjustments made under this paragraph for a fiscal year or year may not exceed 2.5 percent of the total payments projected or estimated to be made based on the prospective payment system under this subsection in that year.’’ As such, beginning in CY 2011, our HH PPS outlier policy is that we reduce payment rates by 5 percent and target up to 2.5 percent of total estimated HH PPS payments to be paid as outliers. To do so, we first returned the 2.5 percent held for the target CY 2010 outlier pool to the national, standardized 60-day episode rates, the national per visit rates, the LUPA add-on payment amount, and the NRS conversion factor for CY 2010. We then reduced the rates by 5 percent as required by section 1895(b)(3)(C) of the Act, as amended by section 3131(b)(1) of the Affordable Care Act. For CY 2011 and subsequent calendar years we target up to 2.5 percent of estimated total payments to be paid as outlier payments, and apply a 10 percent agency-level outlier cap. 2. Fixed Dollar Loss (FDL) Ratio and Loss-Sharing Ratio For a given level of outlier payments, there is a trade-off between the values selected for the FDL ratio and the losssharing ratio. A high FDL ratio reduces the number of episodes that can receive outlier payments, but makes it possible to select a higher loss-sharing ratio, and therefore, increase outlier payments for qualifying outlier episodes. Alternatively, a lower FDL ratio means that more episodes can qualify for outlier payments, but outlier payments per episode must then be lower. E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations The FDL ratio and the loss-sharing ratio must be selected so that the estimated total outlier payments do not exceed the 2.5 percent aggregate level (as required by section 1895(b)(5)(A) of the Act). Historically, we have used a value of 0.80 for the loss-sharing ratio which, we believe, preserves incentives for agencies to attempt to provide care efficiently for outlier cases. With a losssharing ratio of 0.80, Medicare pays 80 percent of the additional estimated costs above the outlier threshold amount. In the CY 2011 HH PPS final rule (75 FR 70398), in targeting total outlier payments as 2.5 percent of total HH PPS payments, we implemented an FDL ratio of 0.67, and we maintained that ratio in CY 2012. Simulations based on CY 2010 claims data completed for the CY 2013 HH PPS final rule showed that outlier payments were estimated to comprise approximately 2.18 percent of total HH PPS payments in CY 2013, and as such, we lowered the FDL ratio from 0.67 to 0.45. We stated that lowering the FDL ratio to 0.45, while maintaining a loss-sharing ratio of 0.80, struck an effective balance of compensating for high-cost episodes while allowing more episodes to qualify as outlier payments (77 FR 67080). The national, standardized 60-day episode payment amount is multiplied by the FDL ratio. That amount is wage-adjusted to derive the wage-adjusted FDL amount, which is added to the case-mix and wageadjusted 60-day episode payment amount to determine the outlier threshold amount that costs have to exceed before Medicare will pay 80 percent of the additional estimated costs. For this final rule, simulating payments using more complete CY 2013 claims data (as of June 30, 2014 rather than preliminary data as of December 31, 2013) and the CY 2014 payment rates (78 FR 72304 through 72308), we estimate that outlier payments in CY 2014 would comprise 2.00 percent of total payments. Based on simulations using CY 2013 claims data and the CY 2015 payments rates in section III.D.4 of this final rule, we estimate that outlier payments will comprise approximately 2.25 percent of total HH PPS payments in CY 2015. Given the increases to the CY 2015 national per-visit payment rates and the national, standardized 60-day episode payment rate as a result of making the case-mix recalibration in section III.C budget neutral, our analysis estimates an additional 0.25 percentage point increase in outlier payments as a percent of total HH PPS payments each year that we phase-in the rebasing adjustments described in the VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 background (section II.C). We estimate that by CY 2016 outlier payments as a percent of total HH PPS payments will be approximately 2.5 percent. We did not propose a change to the FDL ratio or loss-sharing ratio for CY 2015 as we believed that maintaining an FDL of 0.45 and a loss-sharing ratio of 0.80 are appropriate given the percentage of outlier payments is estimated to increase as a result of the increasing the national per-visit amounts through the rebasing adjustments. We will continue to monitor the percent of total HH PPS payments paid as outlier payments to determine if future adjustments to either the FDL ratio or loss-sharing ratio are warranted. Although we did not propose any changes to the outlier policy, the following is a summary of the comments we received regarding outlier payments. Comment: Several commenters stated that estimated outlier payments as a percent of total payments for CY 2015 is below the ‘budgeted’ amount of 2.5 percent, which has ‘deprived’ an appropriate level of payment for those HHAs that field high-cost cases (including cases for beneficiaries in very rural areas). These commenters further suggest that the FDL ratio and/or losssharing ratio should be modified so that estimated outlier payments as a percent of total payments would reach 2.5 percent. Response: We did not propose a change to the FDL ratio for CY 2015 given the finalized increases to the CY 2015 national per-visit payment rates, which our analysis estimates will yield an additional 0.25 percentage point increase in estimated outlier payments as a percent of total HH PPS payments each year that we phase-in the rebasing adjustments described in section II.C. We estimate that for CY 2016, estimated outlier payments as a percent of total HH PPS payments will increase to 2.5 percent. We note that per section 1895(b)(5)(A) of the Act, outlier payments as a percent of total HH PPS payments ‘‘may not exceed 2.5 percent of the total payments projected or estimated to be made based on the prospective payment system under this subsection in that year’’. The statute does not require us to pay out 2.5 percent of total HH PPS payments as outlier payments; it requires us to pay no more than 2.5 percent of total HH PPS payments as outlier payments. Additionally, we noted that these estimates do not take in to account any changes in utilization that may have occurred in CY 2014, and will continue to occur in CY 2015. We are concerned that if we decreased the FDL ratio we could potentially pay more than 2.5 PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 66093 percent of estimated total payments as outlier payments and that episodes without unusual variations in the type or amount of medically-necessary care will qualify for outlier payments, which is contrary to the intent of the policy. Moreover, we remain committed to addressing potentially fraudulent activities, especially those in areas where we suspect suspicious outlier payments (74 FR 58085). We believe that maintaining the current thresholds supports our prudent approach in light of such studies as those conducted by the Office of Inspector General (August 2013 Management Implications Report). We continue to examine potential revisions to the outlier payment methodology through the current contract with Abt Associates and will make recommendations and revisions if necessary. Consequently, for the above stated reasons, we believe that we should not make any changes/revisions to our outlier payment methodology at this time. Comment: One commenter recommended that CMS eliminate outlier payments in their entirety and return the 2.5 percent withhold to the base payment rates. Response: We believe that section 1895(b)(5)(A) of the Act allows the Secretary the discretion as to whether or not to have an outlier policy under the HH PPS. We plan to continue investigating whether or not an outlier policy remains appropriate as well as ways to maintain an outlier policy for episodes that incur unusually high costs due to patient care needs without qualifying episodes of care that do not meet that criteria or are potentially fraudulent. We recently awarded a contract to Abt Associates to address any findings from the home health study required by section 3131(d) of the Affordable Care Act, monitor the potential impact of the rebasing adjustments and other recent payment changes, and develop payment options to ensure ongoing access to care for vulnerable populations. The work may include potential revisions to the outlier payment methodology to better reflect costs of treating Medicare beneficiaries with high levels of severity of illness. Comment: Several commenters stated that CMS’s oversight and monitoring of insulin injection-based outlier episodes will drive outlier payments down as well as cause incorrect projections for future outlier payment. Response: As we have noted in the past (74 FR 58085), we are committed to addressing potentially fraudulent activities, especially those in areas where we see suspicious outlier E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66094 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations payments. As we noted above, we plan to examine potential revisions to the outlier payment methodology through ongoing studies and analysis of home health claims and other utilization data. Monitoring of potentially fraudulent activity will be captured in this analysis, and we will make policy and other adjustments as necessary in light of the new data and outcomes. Comment: One commenter recommended that CMS calculate outlier payments based on actual costs rather than imputed costs. Response: Currently, an HHA episode’s estimated cost is the sum of the national wage-adjusted per-visit payment amounts for all visits delivered during the episode, and the outlier payment is defined to be an estimate of the proportion of the wage-adjusted cost beyond the wage-adjusted threshold. We believe that this estimate serves as a valid proxy for the additional costs incurred by providers. However, in an effort to further the agency’s mission of providing accurate payment, we continue to evaluate the effectiveness of the current outlier payment policy approach and are considering the investigation of alternative, costoriented mechanisms for determining the outlier payment amount for HHA providers for those episodes that incur unusually high costs due to patient care needs. Comment: One commenter questioned CMS’s current outlier approach, which removes 5 percent from the payment rates, and then pays out 2.5 percent in outlier payments. Additionally, the commenter wanted to understand what was done with the other 2.5 percent that is no longer being paid to providers. Response: Per section 1895(b)(3)(C) of the Act, as amended by section 3131(b)(1) of the Affordable Care Act, CMS is required to reduce payment rates by 5 percent and target up to 2.5 percent of total estimated HH PPS payments to be paid as outliers. This provision is a statutory requirement and thus we do not have the authority to rescind this policy. Consequently, to implement this particular Affordable Care Act provision, CMS reduced the standardized 60-day episode payment amount by 5 percent, and set the FDL ratio such that it would target up to 2.5 percent of total estimated HH PPS payments as outlier payments. Final Decision: We are finalizing no change to the FDL ratio or loss sharing ratio for CY 2015. However, we will continue to monitor outlier payments and continue to explore ways to maintain an outlier policy for episodes that incur unusually high costs due to patient care needs without qualifying VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 episodes of care that do not meet that criteria. F. Medicare Coverage of Insulin Injections Under the HH PPS Home health policy regarding coverage of home health visits for the sole purpose of insulin injections is limited to patients that are physically or mentally unable to self-inject and there is no other person who is able and willing to inject the patient.28 However, the Office of Inspector General concluded in August 2013 that some previously covered home health visits for the sole purpose of insulin injections were unnecessary because the patient was physically and mentally able to self-inject.29 In addition, results from analysis in response to public comments on the CY 2014 HH PPS final rule found that episodes that qualify for outlier payments in excess of $10,000 had, on average, 160 skilled nursing visits in a 60-day episode of care with 95 percent of the episodes listing a primary diagnosis of diabetes or long-term use of insulin (78 FR 72310). Therefore, we conducted a literature review regarding generally accepted clinical management practices for diabetic patients and conducted further analysis of home health claims data to investigate the extent to which episodes with visits likely for the sole purpose of insulin injections are in fact limited to patients that are physically or mentally unable to self-inject. As generally accepted by the medical community, older patients (age 65 and older) are more likely to have impairments in dexterity, cognition, vision, and hearing.30 While studies have shown that most elderly patients starting or continuing on insulin can inject themselves, these conditions may affect the elderly individual’s ability to self-inject insulin. It is clinically essential that there is careful assessment prior to the initiation of home care, and throughout the course of treatment, regarding the patient’s capacity for selfinjection. There are multiple reliable and validated assessment tools that may be used to assess the elderly individual’s ability to self-inject. These tools assess the individual’s ability to perform activities of daily living (ADLs), as well as, cognitive, functional, and 28 Medicare Coverage Benefit Policy Manual (Pub. 100–02), Section 40.1.2.4.B.2 ‘‘Insulin Injections.’’ 29 Levinson, Daniel R. Management Implication Report 12–0011, Unnecessary Home Health Care for Diabetic Patients. 30 Strategies for Insulin Injection Therapy in Diabetes Self-Management. (2011). American Association of Diabetes Educators. PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 behavioral status.31 These assessment tools have also proved valid for judging patients’ ability to inject insulin independently and to recognize and deal with hypoglycemia.32 Another important consideration with regard to insulin administration in the elderly population is the possibility of dosing errors.33 Correct administration and accurate dosing is important in order to prevent serious complications, such as hypoglycemia and hyperglycemia. The traditional vial and syringe method of insulin administration involves several steps, including injecting air into the vial, drawing an amount out of the vial into a syringe with small measuring increments, and verifying the correct dose visually.34 In some cases, an insulin pen can be used as an alternative to the traditional vial and syringe method. Insulin pens are designed to facilitate easy self-administration, the possession of which would suggest the ability to self-inject. Additionally, insulin pens often come pre-filled with insulin or must be used with a pre-filled cartridge thus potentially negating the need for skilled nursing for the purpose of calculating and filling appropriate doses. It is recognized that visual impairment, joint immobility and/or pain, peripheral neuropathy, and cognitive issues may affect the ability of elderly patients to determine correct insulin dosing and injection. Our literature review indicates that insulin pen devices may be beneficial in terms of safety for elderly patients due to these visual or physical disabilities.35 To determine whether to use a traditional vial and syringe method of insulin administration versus an insulin pen, the physician must consider and understand the advantages these devices offer over traditional vials and syringes. These advantages include: • Convenience, as the insulin pen eliminates the need to draw up a dose; 31 Hendra, T.J. Starting insulin therapy in elderly patients. (2012). Journal of the Royal Society of Medicine. 95(9), 453–455. 32 Sinclair AJ, Turnbull CJ, Croxson SCM. Document of care for older people with diabetes. Postgrad Med J 1996;72: 334–8. 33 Coscelli C, Lostia S, Lunetta M, Nosari I, Coronel GA. Safety, efficacy, acceptability of a prefilled insulin pen in diabetic patients over 60 years old. Diabetes Research and Clinical Practice. 1995;38:173–7.[PubMed]. 34 Flemming DR. Mightier than the syringe. Am J Nurs. 2000;100:44–8.[PubMed]. 35 Wright, B., Bellone, J., McCoy, E. (2010). A review of insulin pen devices and use in elderly, diabetic population. Clinical Medicine Insights: Endocrinology and Diabetes. 3:53–63. Doi: 10.4137/ CMED.S5534. E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 • Greater dose accuracy and reliability, especially for low doses which are often needed in the elderly; • Sensory and auditory feedback associated with the dial mechanism on many pens may also benefit those with visual impairments; • Pen devices are also more compact, portable and easier to grip, which may benefit those with impairments in manual dexterity; and • Less painful injections and overall ease of use.36 Although pen devices are often perceived to be more costly than vialed insulin, study results indicate that elderly diabetic patients are more likely to accept pen devices and adhere to therapy, which leads to better glycemic control that decreases long-term complications and associated healthcare costs.37 The significantly improved safety profiles of pen devices also avert costly episodes of hypoglycemia.38 It also should be noted that most insurance plans, including Medicare Part D plans, charge the patient the same amount for a month supply of insulin in the pen device as insulin in the vial.39 Additionally, in some cases the individual with coverage for insulin pens may have one co-pay, resulting in getting more insulin than if purchasing a vial. And, there is less waste with pens because insulin vials should be discarded after 28 days after opening. However, there may be clinical reasons for the use of the traditional vial and insulin syringe as opposed to the insulin pen, including the fact that not all insulin preparations are available via insulin pen. In such circumstances, there are multiple assistive aids and devices to facilitate self-injection of insulin for those with cognitive or functional limitations. These include: nonvisual insulin measurement devices; syringe magnifiers; needle guides; prefilled insulin syringes; and vial stabilizers to help ensure accuracy and aid in insulin delivery.40 It is expected that providers will assess the needs, 36 Wright, B., Bellone, J., McCoy, E. (2010). A review of insulin pen devices and use in elderly, diabetic population. Clinical Medicine Insights: Endocrinology and Diabetes. 3:53–63. Doi: 10.4137/ CMED.S5534. 37 Strategies for Insulin Injection Therapy in Diabetes Self-Management. (2011). American Association of Diabetes Educators. 38 Strategies for Insulin Injection Therapy in Diabetes Self-Management. (2011). American Association of Diabetes Educators. 39 Wright, B., Bellone, J., McCoy, E. (2010). A review of insulin pen devices and use in elderly, diabetic population. Clinical Medicine Insights: Endocrinology and Diabetes. 3:53–63. Doi: 10.4137/ CMED.S5534. 40 Strategies for Insulin Injection Therapy in Diabetes Self-Management. (2011). American Association of Diabetes Educators. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 abilities, and preference of the patient requiring insulin to facilitate patient autonomy, efficiency, and safety in diabetes self-management, including the administration of insulin. Further research regarding selfinjection of insulin, whether via a vial and syringe method or insulin pen, shows that education for starting insulin and monitoring should be provided by a diabetes nurse specialist, and typically entails 5 to 10 face-to-face contacts either in the patient’s home or at the diabetes clinic; these are in addition to telephone contacts to further reinforce teaching and to answer patient questions.41 This type of assessment and education allows for patient autonomy and self-efficiency and is often a preferred mode for diabetes selfmanagement. In the CY 2014 HH PPS final rule (78 FR 72256), we noted that the Office of Inspector General (OIG) released a ‘‘Management Implications Report’’ in August of 2013 that concluded that there was a ‘‘systemic weakness that results in Medicare coverage of unnecessary home health care for diabetic patients’’. The OIG report noted that investigations show that the majority of beneficiaries involved in fraudulent schemes have a primary diagnosis of diabetes. The report noted that OIG Special Agents found falsified medical records documenting patients having hand tremors and poor vision preventing them from drawing insulin into a syringe, visually verifying the correct dosage, and injecting the insulin themselves, when the patients did not in fact suffer those symptoms. In light of the OIG report, we conducted analysis and performed simulations using CY 2012 claims data and described our findings in the CY 2014 Home Health PPS Final Rule (78 FR 72310). We found that nearly 44 percent of the episodes that would qualify for outlier payments had a primary diagnosis of diabetes and 16 percent of episodes that would quality for outlier payments had a primary diagnosis of ‘‘Diabetes mellitus without mention of complication, type II or unspecified type, not stated as uncontrolled.’’ Qualifying for outlier payments should indicate an increased resource and service need. However, uncomplicated and controlled diabetes typically would be viewed as stable without clinical complications and would not warrant increased resource and service needs nor would it appear 41 Hendra, T.J. Starting insulin therapy in elderly patients. (2012). Journal of the Royal Society of Medicine. 95(9), 453–455. https:// www.ncbi.nlm.nih.gov. PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 66095 to warrant outlier payments. Our simulations estimated that approximately 81 percent of outlier payments would be paid to proprietary HHAs and that approximately twothirds of outlier payments would be paid to HHAs located in Florida (27 percent), Texas (24 percent) and California (15 percent). We also conducted additional analyses on episodes in our simulations that would have resulted in outlier payments of over $10,000. Of note, 95 percent of episodes that would have resulted in outlier payments of over $10,000 were for patients with a primary diagnosis of diabetes or long-term use of insulin, and most were concentrated in Florida, Texas, New York, California, and Oklahoma. On average, these outlier episodes had 160 skilled nursing visits in a 60-day episode of care.42 Based upon the initial data analysis described above and the information found in the literature review, we conducted further data analysis with more recent home health claims and OASIS data (CY 2012 and CY 2013) to expand our understanding of the diabetic patient in the home health setting. Specifically, we investigated the extent to which beneficiaries with a diabetes-related principal diagnosis received home health services likely for the primary purpose of insulin injection assistance and whether such services were warranted by other documented medical conditions. We also analyzed the magnitude of Medicare payments associated with home health services provided to this population of interest. The analysis was conducted by Acumen, LLC because of their capacity to provide real-time claims data analysis across all parts of the Medicare program (that is, Part A, Part B, and Part D). Our analysis began with identifying episodes for the home health diabetic population based on claims and OASIS assessments most likely to be associated with insulin injection assistance. We used the following criteria to identify the home health diabetic population of interest: (1) A diabetic condition listed as the principal/primary diagnosis on the home health claim; (2) Medicare Part A or Part B enrollment for at least three months prior to the episode and during the episode; and (3) episodes with at least 45 skilled visits. This threshold was determined based on the 42 This analysis simulated payments using CY 2012 claims data and CY 2012 payment rates. The simulations did not take into account the 10percent outlier cap. Some episodes may have qualified for outlier payments in the simulations, but were not paid accordingly if the HHA was at or over its 10 percent cap on outlier payments as a percent of total payments. E:\FR\FM\06NOR2.SGM 06NOR2 66096 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations distribution in the average number and length of skilled nursing visits for episodes meeting criteria 1 and 2 above using CY 2013 home health claims data. The average number of skilled nursing visits for beneficiaries who receive at least one skilled nursing visit appeared to increase from 20 visits at the 90th percentile, to 50 visits at the 95th percentile. Additionally, the average length of a skilled nursing visit for episodes between the 90th and 95th percentiles was 37 minutes, less than half the length of visits for episode between the 75th and 90th percentiles. Approximately 49,100 episodes met the study population criteria described above, accounting for approximately $298 million in Medicare home health payments in CY 2013. Of the 49,100 episodes of interest, 71 percent received outlier payments and, on average, there were 86 skilled nursing visits per episode. In addition, 12 percent of the episodes in the study population were for patients prescribed an insulin pen to self-inject and more than half of the episodes billed (27,439) were for claims that listed ICD–9–CM 2500x, ‘‘Diabetes Mellitus without mention of complication’’, as the principal diagnosis code. ICD–9–CM describes the code 250.0x as diabetes mellitus without mention of complications (complications can include hypo- or hyperglycemia, or manifestations classified as renal, ophthalmic, neurological, peripheral circulatory damage or neuropathy). Clinically, this code generally means that the diabetes is being well-controlled and there are no apparent complications or symptoms resulting from the diabetes. Diabetes that is controlled and without complications does not warrant intensive intervention or daily skilled nursing visits; rather, it warrants knowledge of the condition and routine monitoring. As discussed above in this section, the traditional vial and syringe method of insulin administration is one of two methods of insulin administration (excluding the use of insulin pumps). The alternative to the traditional vial and syringe method is the use of insulin pens. It would seem to be a reasonable assumption that the possession of a prescribed insulin pen would suggest the ability to self-inject. Since insulin pens often come pre-filled with insulin or must be used with a pre-filled cartridge, we believe there would not be a need for skilled nursing for the purpose of insulin injection assistance. We expect providers to assess the needs, abilities, and preference of the patient requiring insulin to facilitate patient autonomy, efficiency, and safety in diabetes self-management, including the administration of insulin. As noted above, approximately 12 percent of the episodes in the study population with visits likely for the purpose of insulin injection assistance were for patients prescribed an insulin pen to self-inject, which would seem to not conform to our current policy that home health visits for the sole purpose of insulin injection assistance is limited to patients that are physically or mentally unable to self-inject and there is no other person who is able and willing to inject the patient. Furthermore, we recognize that our current sub-regulatory guidance may not adequately address the method of delivery. We are considering additional guidance that may be necessary surrounding insulin injection assistance provided via a pen based upon our analyses described above. We have found that literature supports that insulin pens may reduce expenses for the patient in the form of co-pays and may increase patient adherence to their treatment plan. Therefore, we encourage physicians to consider the potential benefits derived in prescribing insulin pens, when clinically appropriate, given the patient’s condition. We also investigated whether secondary diagnosis codes listed on home health claims support that the patient, either for physical or mental reasons, cannot self-inject. Our contractor, Abt Associates, with review and clinical input from CMS clinical staff and experts, created a list of ICD– 9–CM codes that indicate a patient has impairments in dexterity, cognition, vision, and/or hearing that may cause the patient to be unable to self-inject insulin. We found that 49 percent of home health episodes in our study population did not have a secondary diagnosis from that ICD–9–CM code list on the home health claim that supported that the patient was physically or mentally unable to selfinject. When examining only the initial home health episodes of our study population, we found that 67 percent of initial home health episodes with skilled nursing visits likely for insulin injections did not have a secondary diagnosis on the home health claim that supported that the patient was physically or mentally unable to selfinject. Using the same list of ICD–9–CM diagnosis codes, we examined both the secondary diagnoses on the home health claim and diagnoses on non-home health claims in the three months prior to starting home health care for initial home health episodes. We found that for initial home health episodes in our study population that the percentage of episodes that did not have a secondary diagnosis to support that the patient cannot self-inject would decrease from 67 percent to 47 percent if the home health claim included diagnoses found in other claim types during the three months prior to entering home care. We do recognize that, in spite of all of the education, assistive devices and support, there may still be those who are unable to self-inject insulin and will require ongoing skilled nursing visits for insulin administration assistance. However, there is an expectation that the physician and the HHA would clearly document detailed clinical findings and rationale as to why an individual is unable to self-inject, including the reporting of an appropriate secondary condition that supports the inability of the patient to self-inject. As described above, a group of CMS clinicians and contractor clinicians developed a list of conditions that would support the need for ongoing home health skilled nursing visits for insulin injection assistance for instances where the patient is physically or mentally unable to self-inject and there is no able or willing caregiver to provide assistance. We expect the conditions included in Table 34 to be listed on the claim and OASIS to support the need for skilled nursing visits for insulin injection assistance. Table 34: ICD–9–CM Diagnosis Codes That Indicate a Potential Inability to Self-Inject Insulin tkelley on DSK3SPTVN1PROD with RULES2 TABLE 34—ICD–9–CM DIAGNOSIS CODES THAT INDICATE A POTENTIAL INABILITY TO SELF-INJECT INSULIN ICD–9–CM Code Description Amputation V49.61 .............. V49.63 .............. VerDate Sep<11>2014 Thumb Amputation Status. Hand Amputation Status. 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 66097 TABLE 34—ICD–9–CM DIAGNOSIS CODES THAT INDICATE A POTENTIAL INABILITY TO SELF-INJECT INSULIN—Continued ICD–9–CM Code Description V49.64 .............. V49.65 .............. V49.66 .............. V49.67 .............. 885.0 ................. 885.1 ................. 886.0 ................. 886.1 ................. 887.0 ................. 887.1 ................. 887.2 ................. 887.3 ................. 887.4 ................. 887.5 ................. 887.6 ................. 887.7 ................. Wrist Amputation Status. Below elbow amputation status. Above elbow amputation status. Shoulder amputation status. Traumatic amputation of thumb w/o mention of complication. Traumatic amputation of thumb w/mention of complication. Traumatic amputation of other fingers w/o mention of complication. Traumatic amputation of other fingers w/mention of complication. Traumatic amputation of arm and hand, unilateral, below elbow w/o mention of complication. Traumatic amputation of arm and hand, unilateral, below elbow, complicated. Traumatic amputation of arm and hand, unilateral, at or above elbow w/o mention of complication. Traumatic amputation of arm and hand, unilateral, at or above elbow, complicated. Traumatic amputation of arm and hand, unilateral, level not specified, w/o mention of complication. Traumatic amputation of arm and hand, unilateral, level not specified, complicated. Traumatic amputation of arm and hand, bilateral, any level, w/o mention of complication. Traumatic amputation of arm and hand, bilateral, any level, complicated. tkelley on DSK3SPTVN1PROD with RULES2 Vision 362.01 ............... 362.50 ............... 362.51 ............... 362.52 ............... 362.53 ............... 362.54 ............... 362.55 ............... 362.56 ............... 362.57 ............... 366.00 ............... 366.01 ............... 366.02 ............... 366.03 ............... 366.04 ............... 366.09 ............... 366.10 ............... 366.11 ............... 366.12 ............... 366.13 ............... 366.14 ............... 366.15 ............... 366.16 ............... 366.17 ............... 366.18 ............... 366.19 ............... 366.20 ............... 366.21 ............... 366.22 ............... 366.23 ............... 366.8 ................. 366.9 ................. 366.41 ............... 366.42 ............... 366.43 ............... 366.44 ............... 366.45 ............... 366.46 ............... 366.50 ............... 369.00 ............... 369.01 ............... 369.10 ............... 369.11 ............... 369.13 ............... 369.14 ............... 369.15 ............... 369.16 ............... 369.17 ............... 369.18 ............... 369.20 ............... 369.21 ............... 369.22 ............... 369.23 ............... VerDate Sep<11>2014 Background diabetic retinopathy. Macular degeneration (senile) of retina unspecified. Nonexudative senile macular degeneration of retina. Exudative senile macular degeneration of retina. Cystoid macular degeneration of retina. Macular cyst hole or pseudohole of retina. Toxic maculopathy of retina. Macular puckering of retina. Drusen (degenerative) of retina. Nonsenile cataract unspecified. Anterior subcapsular polar nonsenile cataract. Posterior subcapsular polar nonsenile cataract. Cortical lamellar or zonular nonsenile cataract. Nuclear nonsenile cataract. Other and combined forms of nonsenile cataract. Senile cataract unspecified. Pseudoexfoliation of lens capsule. Incipient senile cataract. Anterior subcapsular polar senile cataract. Posterior subcapsular polar senile cataract. Cortical senile cataract. Senile nuclear sclerosis. Total or mature cataract. Hypermature cataract. Other and combined forms of senile cataract. Traumatic cataract unspecified. Localized traumatic opacities. Total traumatic cataract. Partially resolved traumatic cataract. Other cataract. Unspecified cataract. Diabetic cataract. Tetanic cataract. Myotonic cataract. Cataract associated with other syndromes. Toxic cataract. Cataract associated with radiation and other physical influences. After-cataract unspecified. Impairment level not further specified. Better eye: total vision impairment; lesser eye: total vision impairment. Moderate or severe impairment, better eye, impairment level not further specified. Better eye: severe vision impairment; lesser eye: blind not further specified. Better eye: severe vision impairment; lesser eye: near-total vision impairment. Better eye: severe vision impairment; lesser eye: profound vision impairment. Better eye: moderate vision impairment; lesser eye: blind not further specified. Better eye: moderate vision impairment; lesser eye: total vision impairment. Better eye: moderate vision impairment; lesser eye: near-total vision impairment. Better eye: moderate vision impairment; lesser eye: profound vision impairment. Moderate to severe impairment; Low vision both eyes not otherwise specified. Better eye: severe vision impairment; lesser eye; impairment not further specified. Better eye: severe vision impairment; lesser eye: severe vision impairment. Better eye: moderate vision impairment; lesser eye: impairment not further specified. 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 66098 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations TABLE 34—ICD–9–CM DIAGNOSIS CODES THAT INDICATE A POTENTIAL INABILITY TO SELF-INJECT INSULIN—Continued ICD–9–CM Code Description 369.24 ............... 369.25 ............... 369.3 ................. 369.4 ................. 377.75 ............... 379.21 ............... 379.23 ............... Better eye: moderate vision impairment; lesser eye: severe vision impairment. Better eye: moderate vision impairment; lesser eye: moderate vision impairment. Unqualified visual loss both eyes. Legal blindness as defined in U.S.A. Cortical blindness. Vitreous degeneration. Vitreous hemorrhage. Cognitive/Behavioral 290.0 ................. 290.3 ................. 290.40 ............... 290.41 ............... 290.42 ............... 290.43 ............... 294.11 ............... 294.21 ............... 300.29 ............... 331.0 ................. 331.11 ............... 331.19 ............... 331.2 ................. 331.82 ............... Senile dementia uncomplicated. Senile dementia with delirium. Vascular dementia, uncomplicated. Vascular dementia, with delirium. Vascular dementia, with delusions. Vascular dementia, with depressed mood. Dementia in conditions classified elsewhere with behavioral disturbance. Dementia, unspecified, with behavioral disturbance. Other isolated or specific phobias. Alzheimer’s disease. Pick’s disease. Other frontotemporal dementia. Senile degeneration of brain. Dementia with lewy bodies. tkelley on DSK3SPTVN1PROD with RULES2 Arthritis 715.11 715.21 715.31 715.91 715.12 715.22 715.32 715.92 715.13 715.23 715.33 715.93 715.04 715.14 715.24 715.34 715.94 716.51 716.52 716.53 716.54 716.61 716.62 716.63 716.64 716.81 716.82 716.83 716.84 716.91 716.92 716.93 716.94 716.01 716.02 716.04 716.04 719.81 719.82 719.83 719.84 718.41 718.42 718.43 ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... ............... VerDate Sep<11>2014 Osteoarthrosis localized primary involving shoulder region. Osteoarthrosis localized secondary involving shoulder region. Osteoarthrosis localized not specified whether primary or secondary involving shoulder region. Osteoarthrosis unspecified whether generalized or localized involving shoulder region. Osteoarthrosis localized primary involving upper arm. Osteoarthrosis localized secondary involving upper arm. Osteoarthrosis localized not specified whether primary or secondary involving upper arm. Osteoarthrosis unspecified whether generalized or localized involving upper arm. Osteoarthrosis localized primary involving forearm. Osteoarthrosis localized secondary involving forearm. Osteoarthrosis localized not specified whether primary or secondary involving forearm. Osteoarthrosis unspecified whether generalized or localized involving forearm. Osteoarthrosis generalized involving hand. Osteoarthrosis localized primary involving hand. Osteoarthrosis localized secondary involving hand. Osteoarthrosis localized not specified whether primary or secondary involving hand. Osteoarthrosis unspecified whether generalized or localized involving hand. Unspecified polyarthropathy or polyarthritis involving shoulder region. Unspecified polyarthropathy or polyarthritis involving upper arm. Unspecified polyarthropathy or polyarthritis involving forearm. Unspecified polyarthropathy or polyarthritis involving hand. Unspecified monoarthritis involving shoulder region. Unspecified monoarthritis involving upper arm. Unspecified monoarthritis involving forearm. Unspecified monoarthritis involving hand. Other specified arthropathy involving shoulder region. Other specified arthropathy involving upper arm. Other specified arthropathy involving forearm. Other specified arthropathy involving hand. Unspecified arthropathy involving shoulder region. Unspecified arthropathy involving upper arm. Unspecified arthropathy involving forearm. Unspecified arthropathy involving hand. Kaschin-Beck disease shoulder region. Kaschin-Beck disease upper arm. Kaschin-Beck disease forarm. Kaschin-beck disease involving hand. Other specified disorders of joint of shoulder region. Other specified disorders of upper arm joint. Other specified disorders of joint, forearm. Other specified disorders of joint, hand. Contracture of joint of shoulder region. Contracture of joint, upper arm. Contracture of joint, forearm. 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 66099 TABLE 34—ICD–9–CM DIAGNOSIS CODES THAT INDICATE A POTENTIAL INABILITY TO SELF-INJECT INSULIN—Continued ICD–9–CM Code Description 718.44 ............... 714.0 ................. Contracture of hand joint. Rheumatoid arthritis. Movement Disorders 332.0 ................. 332.1 ................. 333.1 ................. 736.05 ............... Paralysis agitans (Parkinson’s). Secondary parkinsonism. Essential and other specified forms of tremor. Wrist drop (acquired). After Effects from Stroke/Other Disorders of the Central Nervous System/Intellectual Disabilities tkelley on DSK3SPTVN1PROD with RULES2 438.21 ............... 438.22 ............... 342.01 ............... 342.02 ............... 342.11 ............... 342.12 ............... 438.31 ............... 438.32 ............... 343.3 ................. 344.41 ............... 344.42 ............... 344.81 ............... 344.00 ............... 344.01 ............... 344.02 ............... 344.03 ............... 344.04 ............... 343.0 ................. 343.2 ................. 344.2 ................. 318.0 ................. 318.1 ................. 318.2 ................. Hemiplegia affecting dominant side. Hemiplegia affecting nondominant side. Flaccid hemiplegia and hemiparesis affecting dominant side. Flaccid hemiplegia and hemiparesis affecting nondominant side. Spastic hemiplegia and hemiparesis affecting dominant side. Spastic hemiplegia and hemiparesis affecting nondominant side. Monoplegia of upper limb affecting dominant side. Monoplegia of upper limb affecting nondominant side. Congenital monoplegia. Monoplegia of upper limb affecting dominant side. Monoplegia of upper limb affecting nondominant side. Locked-in state. Quadriplegia unspecified. Quadriplegia c1–c4 complete. Quadriplegia c1 c4 incomplete. Quadriplegia c5–c7 complete. Quadriplegia c5–c7 incomplete. Congenital diplegia. Congenital quadriplegia. Diplegia of upper limbs. Moderate intellectual disabilities. Severe intellectual disabilities. Profound intellectual disabilities. Although we did not propose any policy changes at this time, we solicited public comments on whether the conditions in Table 34 represent a comprehensive list of codes that appropriately indicate that a patient may not be able to self-inject and solicited comments on the use of insulin pens in home health. We plan to continue monitoring claims that are likely for the purpose of insulin injection assistance. Historical evidence in the medical record must support the clinical legitimacy of the secondary condition(s) and resulting disability that limit the beneficiary’s ability to selfinject. The following is a summary of the comments we received regarding our discussion of Medicare Coverage of Insulin Injections under HH PPS. Comment: A few commenters provided additional ICD–9–CM codes that CMS should consider as supporting the need for insulin injections because a patient cannot self-inject. Response: We thank the commenters for identifying additional ICD–9–CM codes for us to consider. The ICD–9–CM codes that were identified by the VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 commenters will be reviewed by our clinical staff and our contractors and will be taken into consideration in developing any future sub-regulatory guidance on insulin injections. Comment: Many commenters noted their general support of a comprehensive list of codes that appropriately indicate that a patient may not be able to self-inject. However, several commenters also suggested that CMS develop guidelines that are evidenced-based along with clinical and practical reasoning. A few commenters suggested that the evidence-based guidelines should be developed through the National Coverage Determination process, with presumptive eligibility or ineligibility, and an opportunity for the patient or HHA to rebut the presumption of ineligibility prior to denial of coverage. Response: The list of codes included in the proposed rule was not designed to provide guidelines for determining eligibility for insulin injections during a home health episode. Rather, the list of codes was designed to identify conditions that support the need for home health skilled nursing visits for PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 insulin injection assistance when the patient is physically or mentally unable to self-inject and there is no able or willing caregiver to provide assistance. The National Coverage Determination process describes whether specific medical items, services, treatment procedures, or technologies can be paid for under Medicare. Under current policy, insulin injection assistance can be paid for under the Medicare home health benefit. Therefore, a National Coverage Determination is not necessary for insulin injections provided within a home health episode of care. Comment: One commenter stated that it is sometimes difficult to specify a single condition that describes why the patient cannot self-inject. The commenter also stated that the list of codes was developed using ICD–9–CM codes, which will be obsolete in the future given the expansion of codes available under ICD–10–CM. One commenter suggested that we convene stakeholders after ICD–10–CM is implemented to determine a comprehensive list based on ICD–10– CM codes. E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66100 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Response: The list of codes that appropriately indicate that a patient may not be able to self-inject was developed based on codes currently available and is aimed at assisting providers and contractors in identifying diabetic patients who may not be able self-inject insulin. The list of codes is not designed to limit the provider’s ability to demonstrate the necessity for insulin injections based on other information in the medical record. We agree that there may be more codes available under ICD–10–CM and plan to appropriately crosswalk the list of ICD– 9–CM codes to ICD–10-Codes. We would like to note that the ICD–9–CM codes are listed in this rule because they are currently the official code set for home health claims. In addition, convening a stakeholder panel to create a comprehensive list of ICD–10–CM codes is not necessary. Any subregulatory guidance issued would include this list of ICD–9–CM codes appropriately translated into ICD–10– CM codes developed using the general equivalency mapping software and the clinical judgment of our clinicians and contractor clinicians. Comment: One commenter noted that CMS should not consider a future proposal to use a list of conditions as the single means of establishing coverage eligibility for insulin injections. Many commenters stated that any sub-regulatory guidance that identifies conditions that support a patient’s inability to self-inject will result in the inaccurate denial of coverage for insulin injections thus placing the beneficiary at risk. Response: The discussion surrounding insulin injections was included in the rule to invite public comment and gather industry input on potential sub-regulatory guidance on this issue. We did not propose that the list of codes identified in the CY 2015 HH PPS proposed and final rules would as the sole means of establishing coverage eligibility for insulin injection assistance under the Medicare home health benefit. Rather, we identified these conditions as a means for providers and contractors to identify patients who may not be able to selfinject insulin. Comment: One commenter stated that they are concerned they will be required to ‘‘screen’’ patients and as such, the patient may not be afforded appeal rights. Response: We will take this opportunity to remind HHAs that they are not to enroll patients that do not meet the eligibility criteria for home health services. A patient that has been determined to be ineligible by a HHA VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 has the right to ask for a review of eligibility by the Quality Improvement Organization. Comment: A commenter noted a concern that ‘‘Attachment D’’ does not permit the HHA to report diagnoses that do not require interventions on the OASIS (and subsequently the home health claim), thus precluding the home health agency from reporting one of these supporting diagnoses. Response: ‘‘Attachment D’’ guidance requires that secondary diagnoses reported be addressed in the home health plan of care. The focus of this discussion surrounds home health visits for the sole purpose of insulin injections. If the patient requires home health services for the sole purpose of insulin injections, it appears logical for these services to be reported in the plan of care and require interventions that may be supported by the reporting of the appropriate diagnosis that prevents the patient from self-injecting. Additionally, ICD–9–CM and ICD–10– CM coding guidelines state ‘‘for reporting purposes the definition for ‘‘other diagnoses’’ is interpreted as additional conditions that affect patient care in terms of requiring: Clinical evaluation; or therapeutic treatment; or diagnostic procedures; or extended length of hospital stay; or increased nursing care and/or monitoring.’’ Therefore, reporting a diagnosis that supports the reason for daily nursing visits for insulin injections would be in adherence with ICD–9–CM and ICD–10– CM coding guidelines, even if that condition is not the primary reason for the home health encounter. Because that condition is affecting the home health plan of care with the need for daily skilled nursing visits for insulin injections, it would be appropriate to list that diagnosis on the OASIS as well as on the home health claim. Comment: One commenter noted that CMS should consider a range of clinical reasons that indicate a patient may not be able to self-inject, which may or may not relate to the diagnosis associated with the current home health episode. The commenter provided an example of an amputation or a cognitive defect stemming from a prior stroke. Response: We have not proposed a policy that limits coverage to a list of conditions that would indicate why a home health beneficiary is unable to self-inject. We recognize that there can be a wide range of reasons and multiple reasons why a beneficiary is unable to self-inject. The list of diagnoses in the CY 2015 HH PPS proposed and final rule was determined, through clinical review, to support reasons why a skilled nurse would have to administer a daily PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 insulin injection(s). In the commenter’s scenario, if an amputation or cognitive defect necessitates that a skilled nurse administer insulin injection(s), then those conditions would be related to the reason the patient needs home health care. The presence of such conditions could indicate why there is the need for the skilled nurse to provide the injection(s), even though the insulin injection itself is for the treatment and management of diabetes. If any of the diagnoses listed in the CY 2015 HH PPS proposed and final rules are the reason(s) for the inability for the beneficiary to self-inject, then it is appropriate for the home health agency to report these conditions as they would meet the ICD–9–CM and ICD–10–CM coding guidelines to report those conditions on the OASIS and home health claim. We would also note that the examples provided of an amputation or cognitive defect were included in our list of conditions that may support that a patient is unable to self-inject insulin. We thank the commenters for providing us with their feedback and will use the information collected to inform any sub-regulatory guidance. We will also continue to monitor home health claims likely for visits to provide insulin injection assistance and we remind providers that historical evidence in the medical record must support the patient’s inability to selfinject. G. Implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD– 10–CM) On April 1, 2014, the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113–93) was enacted. Section 212 of the PAMA, titled ‘‘Delay in Transition from ICD–9 to ICD–10 Code Sets,’’ provides that ‘‘[t]he Secretary of Health and Human Services may not, prior to October 1, 2015, adopt ICD–10 code sets as the standard for code sets under section 1173(c) of the Social Security Act (42 U.S.C. 1320d–2(c)) and § 162.1002 of title 45, Code of Federal Regulations.’’ Since the release of the CY 2015 HH PPS proposed rule (79 FR 38366–38420), HHS has finalized the new compliance date for ICD–10–CM and ICD–10–PCS. The August 4, 2014 final rule titled ‘‘Administrative Simplification: Change to the Compliance Date for the International Classification of Diseases, 10th Revision (ICD–10–CM and ICD–10–PCS Medical Data Code Sets’’ (79 FR 45128) announced October 1, 2015 as the compliance date. Under that final rule, the transition to ICD–10–CM is required for entities covered by the Health E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations Insurance Portability and Accountability Act of 1996 (HIPAA)(Pub. L. 104–91, enacted on August 21, 1996). The rule also requires covered entities to continue using ICD– 9 through September 30, 2015. Diagnosis reporting on home health claims must adhere to ICD–9–CM coding conventions and guidelines regarding the selection of principal diagnosis and the reporting of additional diagnoses until that time. The current ICD–9–CM Coding Guidelines refer to the use of the International Classification of Diseases, 9th Revision, Clinical Modification (ICD–9–CM) and are available through the CMS Web site at: https:// www.cms.gov/Medicare/Coding/ ICD9ProviderDiagnosticCodes/ index.html or on the CDC’s Web site at https://www.cdc.gov/nchs/icd/ icd9cm.htm. We plan to disseminate more information about the transition from ICD–9–CM to ICD–10–CM through the HHA Center Web site, the Home Health, Hospice and DME Open Door Forum, and in future rulemaking. The following is a summary of the comments we received regarding the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD– 10–CM). Comment: One commenter stated that certain codes were not included in the translation list provided in last year’s rule and attributed the omission to the limitations of our GEMS tool. Response: The CY 2015 HH PPS proposed rule did not contain a discussion of the translation list. Rather, the translation list was discussed in the CY 2014 HH PPS proposed and final rules. We invite further comments on the translation list, which should be submitted via email to grouperemail@ mmm.com. We will review the comments and provide a response. Comment: Several commenters suggested that CMS post ICD–10–CM information and the grouper in an expedited manner to afford additional lead time to make the system changes that support ICD–10–CM submission effective October 1, 2015. Response: We plan to adjust our schedule to provide additional lead time. The CY 2014 HH PPS final rule (77 FR 67450–67531) announced a grouper release date in July 2014, providing three months lead time when the previous implementation date was October 1, 2014. We are adjusting our scheduled to release the ICD–10–CM HH PPS Grouper on April 1, 2015, which provides six months of lead time for HHAs and vendors to prepare for the transition to an ICD–10–CM HH PPS VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 Grouper. In addition, we are planning to conduct additional outreach activities that will be announced in the future. As background, CMS and our support contractors, Abt Associates and 3M, spent over 2 years implementing a process for the transition from the use of ICD–9–CM diagnosis codes to ICD– 10–CM diagnosis codes within the HH PPS Grouper and outlined the process in the CY 2014 HH PPS proposed and final rules. No additional changes have been identified since that time and no additional ICD–10–CM codes have been added that would cause us to revise the grouper that was designed based on the CY 2014 HH PPS final rule. The final translation list (which includes all of the codes listed in the draft posted to the CMS Web site) will be posted to the Home Health section of the CMS Web site. A draft ICD–10–CM HH PPS Grouper will be released on or before January 1, 2015 to our vendors that have registered as beta-testers. Betatesters are again being reminded to provide any comments or feedback within 2 weeks of receipt based upon the processed outlined on the CMS Web site. The purpose of an early release to the beta testers is to identify any significant issues early in the process. Providers who are interested in enrolling as a beta site can obtain more information on the HH PPS Grouper Web site at https://www.cms.gov/ Medicare/Medicare-Fee-for-ServicePayment/HomeHealthPPS/ CaseMixGrouperSoftware.html. As we noted above, the final ICD–10–CM HH PPS Grouper will be posted via the CMS Web site by April 1, 2015. As we are providing three months of additional lead-time, providers should take advantage of this time to prepare their systems to submit ICD–10–CM codes for any services that reflect a date of October 1, 2015 and later for item M0090 on the OASIS. Item M0090 is the assessment completion date reported by the HHA on the OASIS and the grouper logic requires that any assessment with a M0090 date on or after October 1, 2015 contain ICD–10–CM codes. H. Proposed Change to the Therapy Reassessment Timeframes Effective January 1, 2011, therapy reassessments must be performed on or ‘‘close to’’ the 13th and 19th therapy visits and at least once every 30 days (75 FR 70372). A qualified therapist, of the corresponding discipline for the type of therapy being provided, must functionally reassess the patient using a method which would include objective measurement. The measurement results and corresponding effectiveness of the therapy, or lack thereof, must be PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 66101 documented in the clinical record. We anticipated that policy regarding therapy coverage and therapy reassessments would address payment vulnerabilities that have led to high use and sometimes overuse of therapy services. We also discussed our expectation that this policy change would ensure more qualified therapist involvement for beneficiaries receiving high amounts of therapy. In our CY 2013 HH PPS final rule, we provided further clarifications regarding therapy coverage and therapy reassessments (77 FR 67068). Specifically, similar to the existing requirements for therapy reassessments when the patient resides in a rural area, we finalized changes to § 409.44(c)(2)(i)(C)(2) and (D)(2) specifying that when multiple types of therapy are provided, each therapist must assess the patient after the 10th therapy visit but no later than the 13th therapy visit and after the 16th therapy visit but no later than the 19th therapy visit for the plan of care. In § 409.44(c)(2)(i)(E)(1), we specified that when a therapy reassessment is missed, any visits for that discipline prior to the next reassessment are non-covered. Analysis of data from CYs 2010 through 2013 shows that the frequency of episodes with therapy visits reaching 14 and 20 therapy visits did not change substantially as a result of the therapy reassessment policy implemented in CY 2011 (see Table 35). The percentage of episodes with at least 14 covered therapy visits was 17.2 percent in CY 2010 and decreased to 16.0 percent in CY 2011. In CY 2013 the percentage of episodes with at least 14 covered therapy visits increased to 16.3 percent. Likewise, the percentage of episodes with at least 20 covered therapy visits was 6.0 percent in CY 2010 and decreased to 5.4 percent in CY 2011. In CY 2013, the percentage of episodes with at least 20 covered therapy visits was 5.3 percent. We analyzed data for specific types of providers (for example, non-profit, for profit, freestanding, facility-based), and we found the similar trends in the number of episodes with at least 14 and 20 covered therapy visits. For example, for non-profit HHAs, the percentage of episodes with at least 14 covered therapy visits decreased from 11.8 percent in CY 2010 to 11.1 in CY 2011 and episodes with at least 20 covered therapy visits decreased from 4.2 percent in CY 2010 to 3.9 percent in CY 2011. For proprietary HHAs, the percentage of episodes with at least 14 covered therapy visits decreased from 19.7 percent in CY 2010 to 18.2 percent in CY 2011 and episodes with at least 20 covered therapy visits decreased E:\FR\FM\06NOR2.SGM 06NOR2 66102 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations from 6.8 percent in CY 2010 to 6.1 percent in CY 2011. As we stated in section III.A of this final rule, in addition to the implementation of the therapy reassessment requirements in CY 2011, HHAs were also subject to the Affordable Care Act face-to-face encounter requirement, payments were reduced to account for increases nominal case-mix, and the Affordable Care Act mandated that the HH PPS payment rates be reduced by 5 percent to pay up to, but no more than 2.5 percent of total HH PPS payments as outlier payments. The estimated net impact to HHAs for CY 2011 was a decrease in total HH PPS payments of 4.78 percent. The independent effects of any one policy may be difficult to discern in years where multiple policy changes occur in any given year. We note that in our CY 2012 HH PPS final rule (76 FR 68526), we recalibrated and reduced the HH PPS case-mix weights for episodes reaching 14 and 20 therapy visits, thereby diminishing the payment incentive for episodes at those therapy thresholds. TABLE 35—PERCENTAGE OF EPISODES WITH 14 AND 20 THERAPY VISITS, CY 2010 THROUGH 2013 Episodes with at least 1 covered therapy visit Calendar year 2010 2011 2012 2013 Episodes with at least 14 covered therapy visits Episodes with at least 20 covered therapy visits 54.1 54.2 55.2 56.3 17.2 16.0 15.6 16.3 6.0 5.4 5.2 5.3 ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. ................................................................................................................................. tkelley on DSK3SPTVN1PROD with RULES2 Source: CY 2010 claims from the Datalink file and CY 2011 through CY 2013 claims from the standard analytic file (SAF). Note(s): For CY 2010, we included all episodes that began on or after January 1, 2010 and ended on or before December 31, 2010 and we included a 20% sample of episodes that began in CY 2009 but ended in CY 2010. For CY 2011 and CY 2013, we included all episodes that ended on or before December 31 of that CY (including 100% of episodes that began in the previous CY, but ended in the current CY). Since the therapy reassessment requirements were implemented in CY 2011, providers have expressed frustration regarding the timing of reassessments for multi-discipline therapy episodes. In multiple therapy episodes, therapists must communicate when a planned visit and/or reassessment is missed to accurately track and count visits. Otherwise, therapy reassessments may be in jeopardy of not being performed during the required timeframe increasing the risk of subsequent visits being noncovered. As stated above, our recent analysis of claims data from CY 2010 through CY 2013 does not show significant change in the percentage of cases reaching the 14 therapy visit and 20 therapy visit thresholds between CY 2010 and CY 2011. Moreover, payment increases at the 14 therapy visit and 20 therapy visit thresholds have been somewhat mitigated since the recalibration of the case-mix weights in CY 2012. Therefore, we proposed to simplify § 409.44(c)(2) to require a qualified therapist (instead of an assistant) from each discipline to provide the needed therapy service and functionally reassess the patient in accordance with § 409.44(c)(2)(i)(A) at least every 14 calendar days. The proposed requirement to perform a therapy reassessment at least once every 14 calendar days would apply to all episodes regardless of the number of therapy visits provided. All other requirements related to therapy reassessments will remain unchanged, such as a qualified therapist (instead of an assistant) from each therapy VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 discipline provided will still be required to provide the ordered therapy service and functionally reassess the patient using a method which would include objective measurements. The measurement results and corresponding effectiveness of the therapy, or lack thereof, would be documented in the clinical record. In the proposed rule, we stated our belief that revising this requirement would make it easier and less burdensome for HHAs to track and to schedule therapy reassessments every 14 calendar days as opposed to tracking and counting therapy visits, especially for multiple-discipline therapy episodes. We also believed that this proposal would reduce the risk of noncovered visits so that therapists could focus more on providing quality care for their patients, while still promoting therapist involvement and quality treatment for all beneficiaries, regardless of the level of therapy provided. In the CY 2015 HH PPS proposed rule (79 FR 38366–38420), we invited comment on this proposal and the associated change in the regulation at § 409.44. The following is a summary of comments we received regarding the proposed change to the therapy reassessment timeframes. Comment: Commenters strongly supported removing the requirement to perform therapy reassessments on or ‘‘close to’’ the 13th and 19th therapy visits. Commenters appreciate our effort to simplify the therapy reassessment timeframes in order to allow more time and energy to be focused on the patients and outcomes and less time on counting visits. However, the commenters believe PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 that the proposed reassessment interval of every 14 days would be too frequent. They noted that the 14-day interval is not linked to a clinical objective that benefits the patient. They note that changes in function as a result of improvements in functional strength, balance, and other impairments typically take longer than the 14 days. Commenters state that physiological change requires six to eight weeks to occur depending on the patient’s individual goals. They believe this to be true especially in the case of home health patients who typically have complex, multi-system impairments. Most commenters believe that a 30 day reassessment would be more realistic in terms of commonly used functional tests, such as the Berg Balance test, Gait Velocity, Chair Rise test, Timed Up and Go, and Barthel Index, being able to detect a change. Several commenters believe the 14 day requirement would lead to scheduling congestion due to the shortage of qualified therapists and time constraints in rural areas where therapists spend a lot of time traveling to the patient’s residence. Commenters state that this would make it exceedingly difficult for HHAs to accommodate both patient and staff scheduling needs, which would negatively impact patient care. Commenters believe that the proposed 14 day reassessment requirement discourages the proper use of assistants and their role in home health care. In addition, commenters state that the 14 day timeframe is burdensome in that it increases documentation requirements and does nothing to promote quality of E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations care. For example, commenters expect that the 14 day reassessment timeframe will result in patient complaints that therapists are spending too much treatment time on documentation. Additionally, the 14 day reassessment timeframe negatively impacts continuity of care. For example, if a patient is being seen by a certified occupational therapy assistant and a physical therapy assistant, then the patient would be seen by four different therapists in a two week time period. This could be overwhelming for the patient. Continuity of care and personnel are important with this population to ensure trust and follow through which directly impacts the patient’s adherence to a home exercise program and to follow the functional and safety recommendations made by the treating therapists. Several commenters stated that patient care should not be determined by a calendar and that the reassessment should still be based on the frequency of visits. Some commenters recommended that the reassessment be performed every 5th or 6th visit while others recommended that it be performed every 8th or 10th visit. However, the majority of commenters stated that converting this requirement to a calendar day based interval will be far easier to track and manage. Most commenters believe that a calendar day based interval will reduce the likelihood of inadvertently missing an assessment, especially when the patient is receiving multiple types of therapy. Several commenters suggested a reassessment timeframe in the range of every 20 to 28 days. A few commenters suggested every 6 to 8 weeks. One commenter recommended performing the assessment every 60 days. The overwhelming majority of commenters recommended reassessing the patient at least once every 30 days as the most appropriate time frame. Commenters stated that a 30 day reassessment timeframe aligns with many state practice acts, which require that a therapist reassess the patient at least once every 30 days. Response: As a result of the comments we received, in which most commenters suggested requiring therapy reassessments at least once every 30 days, we are finalizing our proposal to eliminate the therapy reassessments that are required to be performed on or ‘‘close to’’ the 13th and 19th therapy visits. We are also finalizing that a qualified therapist (instead of an assistant) from each discipline provide the needed therapy service and functionally reassess the patient in accordance with § 409.44(c)(2)(i)(A) at VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 least once every 30 calendar days, rather than at least every 14 calendar days, as proposed. Comment: Some commenters suggested that we provide either a 3 or 5 day window or grace period before and after the 30th day in which to complete the reassessment. Response: A 3–5 day window before the 30th day is built into the requirement to perform the reassessment at least once every 30 calendar days. However, we will not adopt a policy of allowing for a 3 or 5 day window or grace period after the 30th calendar day as some of the commenters suggested. We believe that requiring therapy reassessments to be performed at least once every 30 calendar days is flexible and enhances patient care. Comment: Some commenters asked for clarification as to whether the proposed reassessment would be required at least once every 14 calendar days or exactly every 14th calendar day. Response: We had intended that the proposed requirement would be for the reassessment to be performed at least once every 14 calendar days. We will finalize a requirement that the reassessment be performed at least once every 30 days. The reassessment will not have to be done on exactly the 30th day. For example, the reassessment could be done on the 21st day or the 28th day as clinically appropriate and deemed necessary by the therapist. Comment: One commenter stated that it is in the best interest of the patient to have regular interaction with the actual therapist, not just the assistant. The commenter believes that assistants generally should not be routinely used in the home setting unless they have demonstrated advanced proficiencies in the setting and that assistant visits should be reimbursed at a lower level since HHAs pay them less. Response: We believe that therapy assistants play a very important role in supporting therapists and providing care to home health patients, especially in rural areas and areas where there is a shortage of therapists. The home health Conditions of Participation (CoPs), at § 484.32, state that any therapy services offered by the HHA directly or under arrangement are given by a qualified therapist or by a qualified therapy assistant under the supervision of a qualified therapist and in accordance with the plan of care. The qualified therapist assists the physician in evaluating level of function, helps develop the plan of care (revising it as necessary), prepares clinical and progress notes, advises and consults with the family and other agency PO 00000 Frm 00073 Fmt 4701 Sfmt 4700 66103 personnel, and participates in in-service programs. Services furnished by a qualified physical therapy assistant or qualified occupational therapy assistant may be furnished under the supervision of a qualified physical or occupational therapist. A physical therapy assistant or occupational therapy assistant performs services planned, delegated, and supervised by the therapist, assists in preparing clinical notes and progress reports, and participates in educating the patient and family, and in in-service programs. In addition, guidelines published by the American Physical Therapy Association (APTA) state: When supervising the physical therapist assistant in any off-site setting, the following requirements must be observed: 1. A physical therapist must be accessible by telecommunications to the physical therapist assistant at all times while the physical therapist assistant is treating patients/clients. 2. There must be regularly scheduled and documented conferences with the physical therapist assistant regarding patients/clients, the frequency of which is determined by the needs of the patient/client and the needs of the physical therapist assistant. 3. In those situations in which a physical therapist assistant is involved in the care of a patient/client, a supervisory visit by the physical therapist will be made: a. Upon the physical therapist assistant’s request for a reexamination, when a change in the plan of care is needed, prior to any planned discharge, and in response to a change in the patient’s/client’s medical status. b. At least once a month, or at a higher frequency when established by the physical therapist, in accordance with the needs of the patient/client. c. A supervisory visit should include: i. An on-site reexamination of the patient/ client. ii. On-site review of the plan of care with appropriate revision or termination. iii. Evaluation of need and recommendation for utilization of outside resources.’’43 We believe that requiring therapy reassessments at least once every 30 days, the current CoP requirements, and the APTA guidelines together promote regular interaction between the therapist and the patient. We will continue to monitor the frequency of assistant visits. As shown in Table 36 below, CY 2011 through CY 2013 claims data indicates that about 30 percent of the time, physical therapy is provided by assistants and about 15 percent of the time, occupational therapy is provided by assistants. 43 https://www.apta.org/uploadedFiles/APTAorg/ About_Us/Policies/Practice/ DirectionSupervisionPTA.pdf. E:\FR\FM\06NOR2.SGM 06NOR2 66104 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations qualified therapist (not a therapy assistant) must also provide the therapy service(s). Comment: One commenter asked if the new therapy reassessment timeframe will only apply to episodes beginning Percentage Percentage on or after January 1, 2015 or if it will of PT visits of OT visits Year provided by a provided by an also apply to episodes spanning January PTA OTA 1, 2015. Response: The new therapy 2011 .......... 23.8 14.4 reassessment requirement will apply to 2012 .......... 28.5 15.4 2013 .......... 29.2 15.4 episodes that begin on or after January 1, 2015. Source: Analysis of CY 2011 through CY Comment: Several commenters 2013 claims data from the Standard Analytic questioned when the reassessment clock File (SAF). Note(s): We included all episodes that would start. They asked for more clarity ended on or before December 31 of that CY about whether the count would begin at (including 100% of episodes that began in the the start of the episode or from the date previous CY, but ended in the current CY). the patient is first seen by a therapist. Response: The clock would start from Bureau of Labor Statistics (BLS) data the date the patient is first seen by the on wage and fringe rates is currently qualified therapist, as per used along with the minutes of care § 409.44(c)(2)(i)(A) the patient’s provided during home health episodes, function must be initially assessed by a as found on claims, to calculate an qualified therapist. As stated in current episode’s resource use (an estimate of the relative cost of the episode). Data on guidance, the reassessment clock is not measured by episode but by the resource use is used to construct casepatient’s full course of treatment. That mix weights that adjust the base is, the reassessment clock starts with the payment rate in order to more therapist’s first assessment/visit and accurately pay for home health continues until the patient is discharged episodes. Since CY 2012, the case mix system takes into account whether visits from home health. In cases where more than one type of therapy is being were performed by a therapist or a therapy assistant when constructing the provided, each therapy discipline has its own separate clock. The 30-day clock case mix weights by calculating an episode’s resource use accordingly. The begins with the first therapy service (of that discipline) and the clock resets Medicare HHA cost report form may be with each therapist’s visit/assessment/ revised in the near future, but currently measurement/documentation (of that the form does not allow us to discipline). differentiate the cost of a therapist visit In order to determine when the next from a therapy assistant visit. We will therapy reassessment visit by a qualified consider whether separate LUPA rates therapist would be required, as it relates for therapists versus therapy assistants to the ‘‘at least every 30 days’’ are needed in the future. requirement, the counting should begin Comment: A commenter requested the day after the service is provided. For clarification regarding the semantics of our proposal ‘‘. . . to require a qualified example, if a therapist conducted and documented an assessment of a patient therapist (instead of an assistant) from during a visit on April 1, the count each discipline to provide the needed would begin on April 2. In this case, in therapy service and functionally order to fulfill the requirement of reassess the patient . . .’’ as this could reassessing the patient at least once be interpreted two different ways. The every 30 days, the therapist rather than commenter is concerned that the an assistant, would need to return by language could be interpreted to mean that therapy assistants will no longer be May 1. We note that the intent of the policy eligible to perform visits in the home is to ensure that, at a minimum, a health setting. Response: We are not changing our patient is seen by the therapist at least existing policy regarding therapy once every 30 days. The intent is not for assistants. Assistants may still perform a therapist to wait until the 30th day to physical therapy services and visit a patient. A therapy reassessment occupational therapy services which visit should include providing the they are qualified to perform. Therapy actual therapy service(s), functionally assistants may provide therapy visits as assessing the patient, measuring medically reasonable and necessary to progress to determine if the goals have treat the patient throughout the duration been met, and documenting of the episode. As stated in our existing measurement results and corresponding policy, during the visit in which the therapy effectiveness in the clinical therapist performs the assessment, the record. tkelley on DSK3SPTVN1PROD with RULES2 TABLE 36—PERCENTAGE OF VISITS PROVIDED BY A PHYSICAL THERAPY AND OCCUPATIONAL THERAPY ASSISTANTS, CY 2011 THROUGH 2013 VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 Comment: A commenter was supportive of a requirement for reassessing the patient every 30 days with the understanding that nothing precludes an agency from doing another assessment earlier than the 30th day if warranted by the patient’s condition or ending of therapy. Response: The commenter is correct. Nothing precludes an agency from doing another assessment earlier than the 30th day if warranted by the patient’s condition or ending of therapy. As stated above, the requirement is for the qualified therapist to reassess the patient at least once every 30 days. Comment: A commenter stated that education regarding any changes to the timing expectations is critical to reduce confusion and prevent misunderstandings and that clearly written instruction with specific examples would be extremely beneficial. The commenter further stated that partnering with the therapy associations in educational efforts will help get the correct word out to the therapists themselves. Response: We will be updating the policy as published in chapter 7 ‘‘Home Health Services’’ of the Medicare Benefit Policy Manual (Pub. 100–20) and publishing a provider education article related to the revised policy. As always, we appreciate any educational efforts that the professional associations are able and willing to provide. Final Decision: In summary, we are finalizing changes to the regulations at § 409.44, effective for episodes ending on or after January 1, 2015, to require that at least every 30 days a qualified therapist (instead of an assistant) must provide the needed therapy service and functionally reassess the patient. Where more than one discipline of therapy is being provided, a qualified therapist from each of the disciplines must provide the needed therapy service and functionally reassess the patient at least every 30 days. Therapy reassessments are to be performed using a method that would include objective measurement, in accordance with accepted professional standards of clinical practice, which enables comparison of successive measurements to determine the effectiveness of therapy goals. Such objective measurements would be made by the qualified therapist using measurements which assess activities of daily living that may include but are not limited to eating, swallowing, bathing, dressing, toileting, walking, climbing stairs, or using assistive devices, and mental and cognitive factors. The measurement results and corresponding effectiveness of the therapy, or lack E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 thereof, must be documented in the clinical record. I. HHA Value-Based Purchasing Model As we discussed previously in the FY 2009 proposed rule for Skilled Nursing Facilities (73 FR 25918, 25932, May 7, 2008), value-based purchasing (VBP) programs, in general, are intended to tie a provider’s payment to its performance in such a way as to reduce inappropriate or poorly furnished care and identify and reward those who furnish quality patient care. Section 3006(b)(1) of the Affordable Care Act directed the Secretary to develop a plan to implement a VBP program for home health agencies (HHAs) and to issue an associated Report to Congress (Report). The Secretary issued that Report, which is available online at https:// www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HomeHealthPPS/ downloads/stage-2-NPRM.PDF. The Report included a roadmap for HHA VBP implementation. The Report outlined the need to develop a HHA VBP program that aligns with other Medicare programs and coordinates incentives to improve quality. The Report indicated that a HHA VBP program should build on and refine existing quality measurement tools and processes. In addition, the Report indicated that one of the ways that such a program could link payment to quality would be to tie payments to overall quality performance. Section 402(a)(1)(A), of the Social Security Amendments of 1967 (as amended), 42 U.S.C. 1395b–1(a)(1)(A) provided authority for CMS to conduct the Home Health Pay-for-Performance (HHPFP) Demonstration that ran from 2008 to 2010. The results of that Demonstration found limited quality improvement in certain measures after comparing the quality of care furnished by Demonstration participants to the quality of care furnished by the control group. One important lesson learned from the HHPFP Demonstration was the need to link the HHA’s quality improvement efforts and the incentives. HHAs in three of the four regions generated enough savings to have incentive payments in the first year of the Demonstration, but the size of payments were unknown until after the conclusion of the Demonstration. This time lag on paying incentive payments did not provide a sufficient incentive to HHAs to make investments necessary to improve quality. The Demonstration suggested that future models could benefit from ensuring that incentives are reliable enough, of sufficient magnitude, and paid in a timely fashion to encourage HHAs to be fully engaged in VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 the quality of care initiative. The evaluation report is available online at https://www.cms.gov/ResearchStatistics-Data-and-Systems/StatisticsTrends-and-Reports/Reports/ Downloads/HHP4P_Demo_Eval_Final_ Vol1.pdf. We have already successfully implemented the Hospital Value-Based Purchasing (HVBP) program where 1.25 percent of hospital payments in FY 2014 are tied to the quality of care that the hospitals provide. This percentage amount will gradually increase to 2.0 percent in FY 2017 and subsequent years. The President’s 2015 Budget proposes that value-based purchasing should be extended to additional providers including skilled nursing facilities, home health agencies, ambulatory surgical centers, and hospital outpatient departments. Therefore, we are now considering testing a HHA VBP model that builds on what we have learned from the HVBP program. The model also presents an opportunity to test whether larger incentives than what have been previously tested will lead to even greater improvement in the quality of care furnished to beneficiaries. The HHA VBP model that is being considered will offer both a greater potential reward for high performing HHAs as well as a greater potential downside risk for low performing HHAs. If implemented, the model will begin at the outset of CY 2016, and include an array of measures that can capture the multiple dimensions of care that HHAs furnish. Building upon the successes of other related programs, we are seeking to implement a model with greater upside benefit and downside risk to motivate HHAs to make the substantive investments necessary to improve the quality of care furnished by HHAs. As currently envisioned, the HHA VBP model would reduce or increase Medicare payments, in a 5–8 percent range, depending on the degree of quality performance in various measures to be selected. The model would apply to all HHAs in each of the projected five to eight states selected to participate in the model. The distribution of payments would be based on quality performance, as measured by both achievement and improvement across multiple quality measures. Some HHAs would receive higher payments than standard fee-forservice payments and some HHAs would receive lower payments, similar to the HVBP program. We believe the payment adjustment at risk would provide an incentive among all HHAs to provide significantly better quality PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 66105 through improved planning, coordination, and management of care. To be eligible for any incentive payments, HHAs would need to achieve a minimal threshold in quality performance with respect to the care that they furnish. The size of the award would be dependent on the level of quality furnished above the minimal threshold with the highest performance awards going to HHAs with the highest overall level of or improvement in quality. HHAs that meet or exceed the performance standards based on quality and efficiency metrics would be eligible to earn performance payments. The size of the performance payment would be dependent upon the provider’s performance relative to other HHAs within its participating state. HHAs that exceed the performance standards and demonstrate the greatest level of overall quality or quality improvement on the selected measures would have the opportunity to receive performance payment adjustments greater than the amount of the payment reduction, and would therefore see a net payment increase as a result of this model. Those HHAs that fail to meet the performance standard would receive lower payments than what would have been reimbursed under the traditional FFS Medicare payment system, and would therefore see a net payment decrease to Medicare payments as a result of this model. We stated in the proposed rule that we are proposing to use the waiver authority under section 1115A of the Act to waive the applicable Medicare payment provisions for HHAs in the selected states and apply a reduction or increase to current Medicare payments to these HHAs, which will be dependent on their performance. We are considering a HHA VBP model in which participation by all HHAs in five to eight selected states is mandatory. We believe requiring all HHAs in selected states to participate in the model will ensure that: (1) There is no selection bias, (2) participating HHAs are representative of HHAs nationally, and (3) there is sufficient participation to generate meaningful results. In our experience, providers are generally reluctant to participate voluntarily in models in which their Medicare payments are subject to reduction. In the proposed rule, we invited comments on the HHA VBP model outlined above, including elements of the model, size of the payment incentives and percentage of payments that would need to be placed at risk in order to spur HHAs to make the necessary investments to improve the quality of care for Medicare beneficiaries, the timing of the incentive E:\FR\FM\06NOR2.SGM 06NOR2 tkelley on DSK3SPTVN1PROD with RULES2 66106 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations payments, and how performance payments should be distributed. We also invited comments on the best approach for selecting states for participation in this model. Approaches could include: (1) Selecting states randomly, (2) selecting states based on quality, utilization, health IT, or efficiency metrics or a combination, or (3) other considerations. We noted that if we decide to move forward with the implementation of this HHA VBP model in CY 2016, we intended to invite additional comments on a more detailed model proposal to be included in future rulemaking. We received a number of comments on the model design, including the following: • A number of commenters expressed concern regarding the magnitude of 5– 8 percent payment adjustment incentives, particularly when considering HHA margins, and as compared to the Hospital Value-based Purchasing program. A number of commenters also expressed support for a high payment incentive because they believe that this payment incentive will provide adequate remuneration for an investment in quality. • A number of commenters encouraged a combination of pay-forperformance and pay-for-reporting . • A number of commenters expressed ideas on the evaluation criteria under the model, for example: Not using the 5star system, giving higher weight to quality measures relating to conditions requiring home health intervention, excluding HHCAHPS from the criteria due to timeliness reasons, excluding rehospitalization metrics since they are often determined by physician judgment, and excluding OASIS measures since they might be fraudulently manipulated. • A number of commenters expressed support for the inclusion of a beneficiary risk adjustment strategy to help prevent cherry picking of easier cases. • A number of commenters preferred for HHAs to be allowed to select participation as opposed to the mandatory participation being considered by CMS. • A number of commenters expressed opinions about the methodology for selecting the participating states, including choosing them from various MAC regions, choosing a rural and frontier state, and excluding states with moratoria on new HHAs. • A number of commenters supported the development of a VBP model. We thank all commenters for their input and will consider these comments as we make further decisions about VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 implementing a HHA VBP model in CY 2016 which would assess performance from each of the preceding baseline years. As stated in the proposed rule, we intend to invite additional comments on a more detailed model proposal to be included in future rulemaking, including the selection of states and the criteria used for selection, the specific measures to be employed, how these measures are categorized within domains and the criteria used for selection, and the payment adjustment percentage. J. Advancing Health Information Exchange HHS believes all patients, their families, and their healthcare providers should have consistent and timely access to their health information in a standardized format that can be securely exchanged between the patient, providers, and others involved in the patient’s care. (HHS August 2013 Statement, ‘‘Principles and Strategies for Accelerating Health Information Exchange.’’) The Department is committed to accelerating health information exchange (HIE) through the use of electronic health records (EHRs) and other types of health information technology (health IT) across the broader care continuum through a number of initiatives including: (1) Alignment of incentives and payment adjustments to encourage provider adoption and optimization of health IT and HIE services through Medicare and Medicaid payment policies, (2) adoption of common standards and certification requirements for interoperable health IT, (3) support for privacy and security of patient information across all HIEfocused initiatives, and (4) governance of health information networks. These initiatives are designed to encourage HIE among all health care providers, including professionals and hospitals eligible for the Medicare and Medicaid EHR Incentive Programs and those who are not eligible for the EHR Incentive programs, and are designed to improve care delivery and coordination across the entire care continuum. We believe that HIE and the use of certified EHR technology by HHAs (and other providers ineligible for the Medicare and Medicaid EHR Incentive Programs) can effectively and efficiently help providers improve internal care delivery practices, support management of patient care across the continuum, and enable the reporting of electronically specified clinical quality measures (eCQMs). Comments: Responses from commenters generally supported the use of EHRs to advance standards-based PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 interoperable health information exchange, ensure privacy and security protections, and improve patientcentered quality care. Commenters noted the ability for health IT to enable access to essential information for decision-making by individuals, providers and their family caregivers. One commenter noted the possibility that some vendors may sunset products or increase costs as health IT standards are adopted. Other commenters noted the need for standards that recognize the distinct functional needs of the home care sector and requested notice regarding emerging standards to allow sufficient time for vendor and provider integration. Other commenters expressed concern regarding increased costs associated with implementing HIE and the lack of incentives to support capital expenditures. Response: We thank commenters for their responses. HHS will continue to promote the adoption and implementation of certified health IT. The use of certified health IT can improve interoperability through the use of national, consensus-based standards as well as facilitate the secure interoperable exchange of health information. To increase flexibility in the Office of the National Coordinator for Health Information Technology’s (ONC) regulatory certification structure, ONC expressed in the 2014 Edition Release 2 final rule (79 FR 54472–73) an intent to propose future changes to the ONC HIT Certification Program that would permit the certification of health IT for other health care settings, such as long-term and post-acute care and behavioral health settings. For now, we direct stakeholders to the ONC guidance for EHR technology developers serving providers ineligible for the Medicare and Medicaid EHR Incentive Programs titled ‘‘Certification Guidance for EHR Technology Developers Serving Health Care Providers Ineligible for Medicare and Medicaid EHR Incentive Payments.’’ 44 We encourage stakeholders to also review the Health IT Policy Committee (a Federal Advisory Committee) recommendations for areas in which certification under the ONC HIT Certification Program would help support long-term and postacute care providers.45 Further, 44 https://www.healthit.gov/sites/default/files/ generalcertexchangeguidance_final_9-9-13.pdf. More information on the current development of standards applicable to HH can be found at: https://wiki.siframework.org/LCC+LTPAC+ Care+Transition+SWG and https:// wiki.siframework.org/Longitudinal+ Coordination+of+Care. 45 https://www.healthit.gov/facas/sites/faca/files/ TransmittalLetter_LTPAC_BH_Certification.pdf; E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations stakeholders should consider emerging innovative payment models, quality reporting programs, state Medicaid reimbursement for remote monitoring (available in some states) and grants that could provide funding for health IT implementation for home health or incentivize other providers to assist home health providers’ implementation efforts. For an overview of these opportunities, stakeholders are directed to the Health IT in Long-Term PostAcute Care Issue Brief.46 tkelley on DSK3SPTVN1PROD with RULES2 K. Proposed Revisions to the SpeechLanguage Pathologist Personnel Qualifications We proposed to revise the personnel qualifications for speech-language pathologists (SLP) to more closely align the regulatory requirements with those set forth in section 1861(ll) of the Act. We proposed to require that a qualified SLP be an individual who has a master’s or doctoral degree in speech-language pathology, and who is licensed as a speech-language pathologist by the state in which he or she furnishes such services. To the extent of our knowledge, all states license SLPs; therefore, all SLPs would be covered by this option. We believe that deferring to the states to establish specific SLP requirements would allow all appropriate SLPs to provide services to Medicare beneficiaries. Should a state choose not to offer licensure at some point in the future, we proposed a second, more specific, option for qualification. In that circumstance, we proposed to require that a SLP successfully complete 350 clock hours of supervised clinical practicum (or be in the process of accumulating such supervised clinical experience); perform not less than 9 months of supervised full-time speech-language pathology services after obtaining a master’s or doctoral degree in speech-language pathology or a related field; and successfully complete a national examination in speech-language pathology approved by the Secretary. These specific requirements are set forth in the Act, and we believe that they are appropriate for inclusion in the regulations as well. We invited comments on this technical correction and associated change in the regulations at § 484.4 in section VI. We received five public comments regarding this proposal from individual HHAs, state HHA provider https://www.healthit.gov/facas/sites/faca/files/ HITPC_LTPAC_BH_Certification_ Recommendations_FINAL.pdf. 46 https://www.healthit.gov/sites/default/files/pdf/ HIT_LTPAC_IssueBrief031513.pdf. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 organizations, and a national organization representing SLPs. Comment: All comments supported the deferral to state licensure standards and validated CMS’ understanding that all states currently have licensure standards for SLPs. One commenter supported the inclusion of separate qualifications for those SLPs located in areas without state licensure, noting that these regulations would also apply in US Territories, and that not all Territories have licensure standards for SLPs. Response: We agree with the commenters that the changes would be appropriate, and are finalizing them as such. Comment: A commenter suggested that we should replace the specific education, training, and experience requirements set forth in the Social Security Act with a requirement that an SLP must meet the certification standards established by the American Speech-Language-Hearing Association (ASHA). Response: The Social Security Act (the Act), on which the regulation is based, does not limit SLPs to only those individuals who meet the ASHA certification standards. Since this limitation does not exist in the Act, we do not believe it should exist in the regulations. Therefore, in order to align the regulatory requirements with those requirements set forth in the Act, we are not making the suggested change. States are free to require ASHA certification as part of their SLP licensure standards. Comment: One comment sought clarification on why this change was being proposed at this time rather than as part of a comprehensive revision of the home health agency Conditions of Participation (CoPs). Response: While a comprehensive revision of the home health CoPs is underway, we have received information from those in the SLP community that the restrictions currently in place for SLPs are impeding the ability of SLPs to practice. Finalizing a comprehensive revision to the home health agency CoPs will require several years. We believe that it is in the interest of the HHA and SLP communities, as well as the Medicare program, to effect a more timely change to the SLP personnel qualifications. Therefore, we are finalizing the revised requirements, as proposed, in this rule, and the change will be effective on January 1, 2015. Final decision: We are finalizing the proposal without change. PO 00000 Frm 00077 Fmt 4701 Sfmt 4700 66107 L. Technical Regulations Text Changes We proposed to make technical corrections in § 424.22(b)(1) to better align the recertification requirements with the Medicare Conditions of Participation (CoPs) for home health services. Specifically, we proposed that § 424.22(b)(1) will specify that recertification is required at least every 60 days when there is a need for continuous home health care after an initial 60-day episode to coincide with the CoP requirements in § 484.55(d)(1), which require the HHA to update the comprehensive assessment in the last 5 days of every 60-day episode of care. As stated in § 484.55, the comprehensive assessment must identify the patient’s continuing need for home care and meet the patient’s medical, nursing, rehabilitative, social, and discharge planning needs. We also proposed to specify in § 424.22(b)(1) that recertification is required at least every 60 days unless there is a beneficiary elected transfer or a discharge with goals met and return to the same HHA during the 60-day episode. The word ‘‘unless’’ was inadvertently left out of the payment regulations text. Inserting ‘‘unless’’ into § 424.22(b)(1) realigns the recertification requirements with the CoPs at § 484.55(d)(1). As outlined in the ‘‘Medicare Program; Prospective Payment System for Home Health Agencies’’ final rule published on July 3, 2000 (65 FR 41188 through 41190), a partial episode payment (PEP) adjustment applies to two intervening events: (1) Where the beneficiary elects a transfer to another HHA during a 60-day episode or the patient; or (2) a discharge and return to the same HHA during the 60-day episode when a beneficiary reached the treatment goals in the plan of care. To discharge with goals met, the plan of care must be terminated with no anticipated need for additional home health services for the balance of the 60day period. A PEP adjustment proportionally adjusts the national, standardized 60-day episode payment amount to reflect the length of time the beneficiary remained under the agency’s care before the intervening event. We proposed to revised § 424.22(b)(1)(ii) to clarify that if a beneficiary is discharged with goals met and/or no expectation of a return to home health care and returns to the same HHA during the 60-day episode a new start of care would be initiated (rather than an update to the comprehensive assessment) and thus the second episode will be considered a E:\FR\FM\06NOR2.SGM 06NOR2 66108 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations certification, not a recertification,47 and would be subject to § 424.22(a)(1). We also proposed to make a technical correction in § 484.250(a)(1) to remove the ‘‘-C’’ after ‘‘OASIS’’ in § 484.250(a)(1), so that the regulation refers generically to the version of OASIS currently approved by the Secretary, and to align this section with the payment regulations at § 484.210(e). Specifically, an HHA must submit to CMS the OASIS data described at § 484.55(b)(1) and (d)(1) for CMS to administer the payment rate methodologies described in § 484.215, § 484.230, and § 484.235 and to meet the quality reporting requirements of section 1895(b)(3)(B)(v) of the Act. Most of the comments that we received, where the commenter indicated that they were commenting on these technical corrections and associated changes in the regulations at § 424.22 and § 484.250 in section VI, were, in fact, also commenting on the proposed clarification on when documentation of a face-to-face encounter is required in section III.B.3. While we are finalizing these regulations text changes as proposed, we refer readers to the summary of the comments and responses in section III.B.3. for our rationale. Final Decision: We are finalizing the proposed regulations text changed at § 424.22 and § 484.250 as proposed. M. Survey and Enforcement Requirements for Home Health Agencies tkelley on DSK3SPTVN1PROD with RULES2 1. Statutory Background and Authority Section 4023 of the Omnibus Budget Reconciliation Act of 1987 (OBRA ’87) (Pub. L 100–203, enacted on December 22, 1987) added subsections 1891(e) and (f) to the Act, which expanded the Secretary’s options to enforce federal requirements for home health agencies (HHAs or the agency). Sections 1861(e)(1) and (2) of the Act provide that if CMS determines that an HHA is not in compliance with the Medicare home health Conditions of Participation and the deficiencies involved either do, or do not, immediately jeopardize the health and safety of the individuals to whom the agency furnishes items and services, then we may terminate the provider agreement, impose an alternative sanction(s), or both. Section 1891(f)(1)(B) of the Act authorizes the Secretary to develop and implement appropriate procedures for appealing determinations relating to the imposition of alternative sanctions. 47 https://www.cms.gov/Medicare/QualityInitiatives-Patient-Assessment-Instruments/OASIS/ downloads/OASISConsiderationsforPPS.pdf VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 In the November 8, 2012 Federal Register (77 FR 67068), we published the ‘‘Alternative Sanctions for Home Health Agencies With Deficiencies’’ final rule (part 488, subpart J), as well as made corresponding revisions to sections § 489.53 and § 498.3. This subpart J added the rules for enforcement actions for HHAs including alternative sanctions. Section 488.810(g) provides that 42 CFR part 498 applies when an HHA requests a hearing on a determination of noncompliance that leads to the imposition of a sanction, including termination. Section 488.845(b) describes the ranges of CMPs that may be imposed for all conditionlevel findings: upper range ($8,500 to $10,000); middle range ($1,500 to $8,500); lower range ($500 to $4,000), as well as CMPs imposed per instance of noncompliance ($1,000 to $10,000). Section 488.845(c)(2) addresses the appeals procedures when CMPs are imposed, including the need for any appeal request to meet the requirements of § 498.40 and the option for waiver of a hearing. 2. Reviewability Pursuant to Appeals We proposed to amend § 488.845 by adding a new paragraph (h) which would explain the reviewability of a CMP that is imposed on a HHA for noncompliance with federal participation requirements. The new language will provide that when administrative law judges (ALJs), state hearing officers (or higher administrative review authorities) find that the basis for imposing a civil money penalty exists, as specified in § 488.485, he or she may not set a penalty of zero or reduce a penalty to zero; review the exercise of discretion by CMS or the state to impose a civil money penalty; or, in reviewing the amount of the penalty, consider any factors other than those specified in §§ 488.485(b)(1)(i) through (b)(1)(iv). That is, when the administrative law judge or state hearing officer (or higher administrative review authority) finds noncompliance supporting the imposition of the CMP, he or she must retain some amount of penalty consistent with the ranges of penalty amounts established in § 488.845(b). The proposed language for HHA reviews is similar to the current § 488.438(e) governing the scope of review for civil money penalties imposed against skilled nursing facilities, and is also consistent with section 1128A(d) of the Act which requires that specific factors be considered in determining the amount of any penalty. The following is a summary of the comments we received regarding the PO 00000 Frm 00078 Fmt 4701 Sfmt 4700 proposed amendment to § 488.845 to explain the reviewability of a CMP by an ALJ. Comment: One commenter supported the proposal, as it would align HHA policy more closely with SNF policy regarding ALJ reviewability. Response: We agree with the commenter who observed that the proposal would align HHA policy with long-standing practice and policy with regard to the manner in which SNF CMPs are reviewed. We believe it is important that CMS be consistent in the application of CMPs among providers, and the proposed language for HHA CMPs is consistent with existing language for SNFs at § 488.438(e). Comment: Two commenters believed that the HHA CMP process was too new for changes to be addressed in the ALJ review process. Response: The length of time the HHA CMPs have been in effect is not relevant to the implementation of the requirements of the Act and implementing regulations. Section 1891(f)(1)(B) of the Act requires the Secretary to provide appropriate procedures for appealing the determination relating to the imposition of a sanction. As provided at § 488.845(c)(2)(i) ‘‘Appeals Procedures’’, the determination that is the basis for imposition of the CMP may be appealed. The proposed language does not revise the regulation at § 488.845(c)(2)(i), but adds clarification regarding the scope of the review during the appeal process. Comment: One commenter believed that the ALJs should be allowed to eliminate CMPs as a part of their administrative review. Response: Section 1891(b) of the Act mandates that it is the duty and responsibility of the Secretary to assure that the conditions of participation as well as the enforcement of such conditions is adequate to protect the health and safety of individuals under the care of an HHA. Section 1891(f) of the Act further specifies that the Secretary establish a range of intermediate sanctions which shall include, among others, civil money penalties. Finally, section 1819(f)(1)(B) of the Act requires the Secretary to provide appropriate procedures for appealing the determination relating to the imposition of the sanction and the implementing regulations at § 488.845(c)(2)(i), ‘‘Appeals Procedures’’ provide that the determination that is the basis for imposition of the CMP may be appealed. It is within our discretion as to the choice of remedy to be imposed. While an ALJ may review the underlying findings that support CMS’s determination to impose a CMP and E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations whether or not the imposed amount falls within the regulatory range, elimination of any CMP is not within the scope of the appeal process. Comment: One commenter believed the denial of appeal of the implementation of the CMP may not be constitutionally valid. An additional two commenters believed this proposed language added additional restrictions to the ALJ which resulted in the lack of due process. Response: We do not believe that the proposed language raises constitutional issues or restricts due process. Section 1128A of the Act requires that specific factors be considered in determining the amount of the penalty. Those factors, particularly the deficiencies cited by the survey, are considered by CMS in the establishment of the CMP amount to be imposed. The deficiencies which give rise to a CMP may be appealed. Section 1891(f)(1)(B) of the Act requires the Secretary to provide appropriate procedures for appealing the determination relating to the imposition of the sanction. These procedures are provided at § 488.845(c)(2)(i). The CMP itself would be affected if the deficiencies underlying the determination were not sustained on appeal. Final Decision: After careful consideration of the comments received, we are finalizing the regulatory language as proposed. 66109 3. Technical Adjustment We also proposed to amend § 498.3, Scope and Applicability, by revising paragraph (b)(13) to include specific cross reference to proposed § 488.845(h) and to revise the reference to section § 488.740 which was a typographical error and replace it with section § 488.820 which is the actual section that lists the sanctions available to be imposed against an HHA. We also amended § 498.3(b)(14)(i) to include cross reference to proposed § 488.845(h), which establishes the scope of CMP review for HHAs. Finally, we proposed to amend § 498.60 to include specific references to HHAs and proposed § 488.845(h). IV. Collection of Information Requirements Under the Paperwork Reduction Act of 1995, we are required to provide 60day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. To fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues: • The need for the information collection and its usefulness in carrying out the proper functions of our agency. • The accuracy of our estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. We solicited public comment on the information collection requirement (ICR) related to the proposed changes to the home health face-to-face encounter requirements in section III.B and the proposed change to the therapy reassessment timeframes in section III.H. These proposed changes are associated with ICR approved under OMB control number as 0938–1083. A. Proposed Changes to the Face-toFace Encounter Requirements The following assumptions were used in estimating the burden for the proposed changes to the home health face-to-face requirements: TABLE 37—HOME HEALTH FACE-TO-FACE ENCOUNTER BURDEN ESTIMATE ASSUMPTIONS # of Medicare-billing HHAs, from CY 2013 claims with matched OASIS assessments ................................................. Hourly rate of an office employee (Executive Secretaries and Executive Administrative Assistants, 43–6014) ............ Hourly rate of an administrator (General and Operations Managers, 11–1021) ............................................................. Hourly rate of Family and General Practitioners (29–1062) ............................................................................................ 11,521 $20.54 ($15.80 ×; 1.30) $64.65 ($49.73 ×; 1.30) $112.91 ($86.85 ×; 1.30) Note: CY = Calendar Year. All salary information is from the Bureau of Labor Statistics (BLS) Web site at https://www.bls.gov/oes/current/ naics4_621600.htm and includes a fringe benefits package worth 30 percent of the base salary. The mean hourly wage rates are based on May 2013 BLS data for each discipline, for those providing ‘‘home health care services.’’ tkelley on DSK3SPTVN1PROD with RULES2 1. Proposed Changes to the Face-to-Face Encounter Narrative Requirement Sections 1814(a)(2)(C) and 1835 (a)(2)(A) of the Act, as amended by section 6407 of the Affordable Care Act require that, as a condition for payment, prior to certifying a patient’s eligibility for the Medicare home health benefit the physician must document that the physician himself or herself or an allowed nonphysician practitioner (NPP) had a face-to-face encounter with the patient. Section 424.22(a)(1)(v) currently requires that that the face-toface encounter be related to the primary VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 reason the patient requires home health services and occur no more than 90 days prior to the home health start of care date or within 30 days after the start of the home health care. In addition, as part of the certification of eligibly, the certifying physician must document the date of the encounter and include an explanation (narrative) of why the clinical findings of such encounter support that the patient is homebound, as defined in section 1835(a) of the Act, and in need of either intermittent skilled nursing services or therapy services, as defined in § 409.42(c). To simplify the face-to-face encounter regulations, reduce burden for HHAs and physicians, and to mitigate instances where physicians and HHAs unintentionally fail to comply with certification requirements, we propose to eliminate the narrative requirement at § 424.22(a)(1)(v). The certifying physician will still be required to certify that a face-to-face patient encounter, PO 00000 Frm 00079 Fmt 4701 Sfmt 4700 which is related to the primary reason the patient requires home health services, occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care and was performed by a physician or allowed non-physician practitioner as defined in § 424.22(a)(1)(v)(A), and to document the date of the encounter as part of the certification of eligibility. In eliminating the face-to-face encounter narrative requirement, we assume that there will be a one-time burden for the HHA to modify the certification form, which the HHA provides to the certifying physician. The revised certification form must allow the certifying physician to certify that a face-to-face patient encounter, which is related to the primary reason the patient requires home health services, occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care E:\FR\FM\06NOR2.SGM 06NOR2 66110 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations and was performed by a physician or allowed NPP as defined in § 424.22(a)(1)(v)(A). In addition, the certification form must allow the certifying physician to document the date that the face-to-face encounter occurred. We estimate that it would take a home health clerical staff person 15 minutes (15⁄60 = 0.25 hours) to modify the certification form, and the HHA administrator 15 minutes (15⁄60 = 0.25 hours) to review the revised form. The clerical time plus administrator time equals a one-time burden of 30 minutes or (30⁄60) = 0.50 hours per HHA. For all 11,521 HHAs, the total time required would be (0.50 ×; 11,521) = 5,761 hours. At $20.54 per hour for an office employee, the cost per HHA would be (0.25 ×; $20.54) = $5.14. At $64.65 per hour for the administrator’s time, the cost per HHA would be (0.25 × $64.65) = $16.16. Therefore, the total one-time cost per HHA would be $21.30, and the total one-time cost for all HHAs would be ($21.30 × 11,521) = $245,397. In the CY 2011 HH PPS final rule (75 FR 70455), we estimated that the certifying physician’s burden for composing the face-to-face encounter narrative, which includes how the clinical findings of the encounter support eligibility (writing, typing, or dictating the face-to-face encounter narrative) signing, and dating the patient’s face-to-face encounter, was 5 minutes for each certification (5⁄60 = 0.0833 hours). Because it has been our longstanding manual policy that physicians sign and date certifications and recertifications, there is no additional burden to physicians for signing and dating the face-to-face encounter documentation. We estimate that there would be 3,096,680 initial home health episodes in a year based on 2012 claims data from the home health Datalink file. As such, the estimated burden for the certifying physician to write the face-to-face encounter narrative would have been 0.0833 hours per certification (5⁄60 = 0.0833 hours) or 257,953 hours total (0.0833 hours × 3,096,680 initial home health episodes). The estimated cost for the certifying physician to write to face-to-face encounter narrative would have been $9.41 per certification (0.0833 × $112.91) or $29,139,759 total ($9.41 × 3,096,680) for CY 2015. Although we proposed to eliminate the narrative, the certifying physician will still be required to document the date of the face-to-face encounter as part of the certification of eligibility. We estimate that it would take no more than 1 minute for the certifying physician to document the date that the face-to-face encounter occurred (1⁄60 = 0.0166 hours). The estimated burden for the certifying physician to continue to document the date of the face-to-face encounter would be 0.0166 hours per certification or 51,405 hours total (0.0166 hours × 3,096,680 initial home health episodes). The estimated cost for the certifying physician to continue to document the date of the face-to-face encounter would be $1.87 per certification (0.0166 × $112.91) or $5,790,792 total ($1.87 × 3,096,680) for CY 2015. Therefore, in eliminating the face-to-face encounter narrative requirement, as proposed in section III.B. of the proposed rule, we estimate that burden and costs will be reduced for certifying physicians by 206,548 hours (257,953–51,405) and $23,348,967 ($29,139,759–$5,790,792), respectively for CY 2015. Comment: A commenter believed that the time estimates were under-reported for the HHA administrator (15 minutes (15⁄60 = 0.25 hours)) to review the revised certification form. The commenter stated that the administrator would have to review the pertinent statutory and regulatory references to ensure that the certification form is in compliance. Response: Since all certification requirements are remaining the same, except for the elimination of the narrative, the administrator should already be knowledgeable about the current statutory and regulatory requirements with regard to certifying patient eligibility for the home health benefit. Therefore, we will maintain our original estimate that it will take no more than 15 minutes for the HHA administrator to review the necessary changes to the certification form as a result of the elimination of the face-toface encounter narrative. 2. Proposed Clarification on When Documentation of a Face-to-Face Encounter Is Required To determine when documentation of a patient’s face-to-face encounter is required under sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, we proposed to clarify that the face-to-face encounter requirement is applicable for certifications (not recertifications), rather than initial episodes. A certification (versus recertification) is generally considered to be any time that a new SOC OASIS is completed to initiate care. We estimate that of the 6,562,856 episodes in the CY 2012 home health Datalink file, 3,096,680 SOC assessments were performed on initial home health episodes. If this proposal is implemented, an additional 830,287 episodes would require documentation of a face-to-face encounter for subsequent episodes that were initiated with a new SOC OASIS assessment. We estimate that it would take no more than 1 minute for the certifying physician to document the date that the face-to-face encounter occurred (1⁄60 = 0.0166 hours). The estimated burden for the certifying physician to document the date of the face-to-face encounter for each certification (any time a new SOC OASIS is completed to initiate care) would be 0.0166 hours or 13,783 total hours (0.0166 hours × 830,287 additional home health episodes). The estimated cost for the certifying physician to document the date of the face-to-face encounter for each additional home health episode would be $1.87 per certification (0.0166 × $112.91) or $1,552,637 total ($1.87 × 830,287) for CY 2015. TABLE 38—ESTIMATED ONE-TIME FORM REVISION BURDEN FOR HHAS Requirement HHAs Responses Hr. burden Total time (hours) Total dollars 0938–1083 ......................................... tkelley on DSK3SPTVN1PROD with RULES2 OMB# § 424.22(a)(1)(v) 11,521 1 0.5 5,761 $245,397 VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00080 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 66111 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations TABLE 39—ESTIMATED BURDEN REDUCTION FOR CERTIFYING PHYSICIANS [No longer drafting a face-to-face encounter narrative] OMB# Requirement Certifications Responses Hr. burden Total time (hours) Total dollars 0938–1083 ................................... § 424.22(a)(1)(v) 3,096,680 1 (0.0667) (206,548) ($23,348,967) TABLE 40—ESTIMATED BURDEN FOR CERTIFYING PHYSICIANS [Documenting the date of the face-to-face encounter for additional certifications] OMB# Requirement Certifications Responses Hr. burden Total time (hours) Total dollars 0938–1083 ..................................... § 424.22(a)(1)(v) 830,287 1 0.0166 13,783 $1,552,637 In summary, all of the changes to the face-to-face encounter requirements in section III.B of this final rule, including changes to § 424.22(a)(1)(v), will result in an estimated net reduction in burden for certifying physicians of 192,765 hours or $21,796,330 (see Tables 39 and 40). The changes to the face-to-face encounter requirements at § 424.22(a)(1)(v) will result in a onetime burden for HHAs to revise the certification form of 5,761 hours or $245,397 (Table 38 above). tkelley on DSK3SPTVN1PROD with RULES2 B. Proposed Change to the Therapy Reassessment Timeframes Currently, § 409.44(c) requires that patient’s function must be initially assessed and periodically reassessed by a qualified therapist, of the corresponding discipline for the type of therapy being provided, using a method which would include objective measurement. If more than one discipline of therapy is being provided, a qualified therapist from each of the disciplines must perform the assessment and periodic reassessments. The measurement results and corresponding effectiveness of the therapy, or lack thereof, must be documented in the clinical record. At least every 30 days a qualified therapist (instead of an assistant) must provide the needed therapy service and functionally reassess the patient. If a patient is expected to require 13 and/or 19 therapy visits, a qualified therapist (instead of an assistant) must provide all of the therapy services on the 13th visit and/or 19th therapy visit and functionally reassess the patient in accordance with § 409.44(c)(2)(i)(A). When the patient resides in a rural area or if the patient is receiving multiple types of therapy, a therapist from each discipline (not an assistant) must assess the patient after the 10th therapy visit but no later than the 13th therapy visit and after the 16th therapy visit but no later than the 19th therapy visit for the VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 plan of care. In instances where the frequency of a particular discipline, as ordered by a physician, does not make it feasible for the reassessment to occur during the specified timeframes without providing an extra unnecessary visit or delaying a visit, then it is acceptable for the qualified therapist from that discipline to provide all of the therapy and functionally reassess the patient during the visit associated with that discipline that is scheduled to occur closest to the 14th and/or 20th Medicare-covered therapy visit, but no later than the 13th and/or 19th Medicare-covered therapy visit. When a therapy reassessment is missed, any visits for that discipline prior to the next reassessment are non-covered. To lessen the burden on HHAs of counting visits and to reduce the risk of non-covered visits so that therapists can focus more on providing quality care for their patients, we are simplifying § 409.44(c) to require that therapy reassessments must be performed at least once every 30 calendar days. The requirement to perform a therapy reassessment at least once every 30 calendar days would apply to all episodes regardless of the number of therapy visits provided. All other requirements related to therapy reassessments would remain unchanged. A qualified therapist (instead of an assistant), from each therapy discipline provided, must provide the ordered therapy service and functionally reassess the patient using a method which would include objective measurement. The measurement results and corresponding effectiveness of the therapy, or lack thereof, must be documented in the clinical record. In the CY 2011 HH PPS final rule we stated that the therapy reassessment requirements in § 409.44(c) are already part of the home health CoPs, as well as from accepted standards of clinical practice, and therefore, we believe that these requirements do not create any PO 00000 Frm 00081 Fmt 4701 Sfmt 4700 additional burden on HHAs (75 FR 70454). As stated in the CY 2011 HH PPS final rule, longstanding CoP policy at § 484.55 requires HHAs to document progress toward goals and the regulations at § 409.44(c)(2)(i) already mandate that for therapy services to be covered in the home health setting, the services must be considered under accepted practice to be a specific, safe, and effective treatment for the beneficiary’s condition. The functional assessment does not require a special visit to the patient, but is conducted as part of a regularly scheduled therapy visit. Functional assessments are necessary to demonstrate progress (or the lack thereof) toward therapy goals, and are already part of accepted standards of clinical practice, which include assessing a patient’s function on an ongoing basis as part of each visit. The CY 2011 HH PPS final rule goes on to state that both the functional assessment and its accompanying documentation are already part of existing HHA practices and accepted standards of clinical practice. Therefore, we continue to believe that simplifying the required reassessment timeframes from every 30 days and prior to the 14th and 20th visits to every 30 calendar days does not place any new documentation requirements on HHAs. We are revising the currently approved PRA package (OMB# 0938– 1083) to describe these changes to the regulatory text. C. Submission of PRA-Related Comments If you comment on these information collection and recordkeeping requirements, please submit your comments electronically as specified in the ADDRESSES section of this final rule. PRA-specific comments must be received on/by December 8, 2014. E:\FR\FM\06NOR2.SGM 06NOR2 66112 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 V. Regulatory Impact Analysis A. Statement of Need Section 1895(b)(1) of the Act requires the Secretary to establish a HH PPS for all costs of HH services paid under Medicare. In addition, section 1895(b)(3)(A) of the Act requires (1) the computation of a standard prospective payment amount include all costs for home health services covered and paid for on a reasonable cost basis and that such amounts be initially based on the most recent audited cost report data available to the Secretary, and (2) the standardized prospective payment amount be adjusted to account for the effects of case-mix and wage levels among HHAs. Section 1895(b)(3)(B) of the Act addresses the annual update to the standard prospective payment amounts by the applicable percentage increase. Section 1895(b)(4) of the Act governs the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act require the standard prospective payment amount to be adjusted for case-mix and geographic differences in wage levels. Section 1895(b)(4)(B) of the Act requires the establishment of appropriate casemix adjustment factors for significant variation in costs among different units of services. Lastly, section 1895(b)(4)(C) of the Act requires the establishment of wage adjustment factors that reflect the relative level of wages, and wage-related costs applicable to home health services furnished in a geographic area compared to the applicable national average level. Section 1895(b)(5) of the Act gives the Secretary the option to make changes to the payment amount otherwise paid in the case of outliers because of unusual variations in the type or amount of medically necessary care. Section 1895(b)(3)(B)(v) of the Act requires HHAs to submit data for purposes of measuring health care quality, and links the quality data submission to the annual applicable percentage increase. Also, section 1886(d)(2)(D) of the Act requires that home health services furnished in a rural area for episodes and visits ending on or after April 1, 2010, and before January 1, 2016, receive an increase of 3 percent the payment amount otherwise made under section 1895 of the Act. Section 3131(a) of the Affordable Care Act mandates that starting in CY 2014, the Secretary must apply an adjustment to the national, standardized 60-day episode payment rate and other amounts applicable under section 1895(b)(3)(A)(i)(III) of the Act to reflect factors such as changes in the number of visits in an episode, the mix of VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors. In addition, section 3131(a) of the Affordable Care Act mandates that rebasing must be phased-in over a 4year period in equal increments, not to exceed 3.5 percent of the amount (or amounts) as of the date of enactment (2010) under section 1895(b)(3)(A)(i)(III) of the Act, and be fully implemented in CY 2017. B. Overall Impact We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96– 354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104–4), Executive Order 13132 on Federalism (August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2). Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule has been designated as economically significant under section 3(f)(1) of Executive Order 12866, since the aggregate transfer impacts in calendar year 2015 will exceed the $100 million threshold. The net transfer impacts are estimated to be ¥$60 million. Furthermore, we estimate a net reduction of $21.55 million in calendar year 2015 burden costs related to the certification requirements for home health agencies and associated physicians. Lastly, this final rule is a major rule under the Congressional Review Act and as a result, we have prepared a regulatory impact analysis (RIA) that, to the best of our ability, presents the costs and benefits of the rulemaking. In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. The update set forth in this rule applies to Medicare payments under HH PPS in CY 2015. Accordingly, the PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 following analysis describes the impact in CY 2015 only. We estimate that the net impact of the proposals in this rule is approximately $60 million in decreased payments to HHAs in CY 2015. We applied a wage index budget neutrality factor and a case-mix weights budget neutrality factor to the rates as discussed in section III.D.4. of this final rule; therefore, the estimated impact of the 2015 wage index in section III.D.3. of this final rule and the recalibration of the case-mix weights for 2015 in section III.C. of this final rule is zero. The ¥$60 million impact reflects the distributional effects of the 2.1 percent home health payment update percentage ($390 million increase) and the effects of the second year of the four-year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment amount, the national per-visit payment rates, and the NRS conversion factor for an impact of ¥2.4 percent ($450 million decrease). The $60 million in decreased payments is reflected in the last column of the first row in Table 41 as a 0.3 percent decrease in expenditures when comparing estimated CY 2014 payments to estimated CY 2015 payments. The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $7.5 million to $38.5 million in any one year. For the purposes of the RFA, we consider all HHAs small entities as that term is used in the RFA. Individuals and states are not included in the definition of a small entity. The economic impact assessment is based on estimated Medicare payments (revenues) and HHS’s practice in interpreting the RFA is to consider effects economically ‘‘significant’’ only if greater than 5 percent of providers reach a threshold of 3 to 5 percent or more of total revenue or total costs. The majority of HHAs’ visits are Medicarepaid visits and therefore the majority of HHAs’ revenue consists of Medicare payments. Based on our analysis for this final rule, which incorporates additional Medicare home health claims data that were not available at the time the CY 2015 HH PPS proposed rule was published, we conclude that the policies final in this rule will result in an estimated total impact of 3 to 5 percent or more on Medicare revenue for greater E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 than 5 percent of HHAs. Therefore, the Secretary has determined that this final rule will have a significant economic impact on a substantial number of small entities. Further detailed analysis is presented below and in Table 41, by HHA classification, type, and location. Executive Order 13563 specifies, to the extent practicable, agencies should assess the costs of cumulative regulations. However, given potential utilization pattern changes, wage index changes, changes to the market basket forecasts, and unknowns regarding future policy changes, we believe it is neither practicable nor appropriate to forecast the cumulative impact of the rebasing adjustments on Medicare payments to HHAs for future years at this time. Changes to the Medicare program may continue to be made as a result of the Affordable Care Act or new statutory provisions. Although these changes may not be specific to the HH PPS, the nature of the Medicare program is such that the changes may interact and the complexity of the interactions would make it difficult to predict accurately the full scope of the impact upon HHAs for future years beyond CY 2015. We note that the rebasing adjustments to the national, standardized 60-day episode payment rate and the national per-visit rates are capped at the statutory limit of 3.5 percent of the CY 2010 amounts for each year, 2014 through 2017, and the NRS rebasing adjustment will be ¥2.82 percent in each year, 2014 through 2017 (as described in section II.C. of this final rule). In addition, section 1102(b) of the Act requires us to prepare a RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. This final rule applies to HHAs. Therefore, the Secretary has determined that this rule will not have a significant economic impact on the operations of small rural hospitals. C. Detailed Economic Analysis This final rule sets forth updates for CY 2015 to the HH PPS rates contained in the CY 2014 HH PPS final rule (78 FR 72304 through 72308). The impact analysis of this final rule presents the estimated expenditure effects of policy VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 changes final in this rule. We use the latest data and best analysis available, but we do not make adjustments for future changes in such variables as number of visits or case-mix. This analysis incorporates the latest estimates of growth in service use and payments under the Medicare home health benefit, primarily using Medicare claims data for CY 2013. We note that certain events may combine to limit the scope or accuracy of our impact analysis, because such an analysis is future-oriented and, thus, susceptible to errors resulting from other changes in the impact time period assessed. Some examples of such possible events are newly-legislated general Medicare program funding changes made by the Congress, or changes specifically related to HHAs. In addition, changes to the Medicare program may continue to be made as a result of the Affordable Care Act or new statutory provisions. Although these changes may not be specific to the HH PPS, the nature of the Medicare program is such that the changes may interact and the complexity of the interactions could make it difficult to predict accurately the full scope of the impact upon HHAs. Table 41 represents how HHA revenues are likely to be affected by the policy changes finalized in this rule. For this analysis, we used an analytic file of CY 2013 home health claims data (as of June 30, 2014) for dates of service that ended on or before December 31, 2013, linked to OASIS assessments. The first column of Table 41 classifies HHAs according to a number of characteristics including provider type, geographic region, and urban and rural locations. The third column shows the payment effects of CY 2015 wage index. The fourth column shows the payment effects of the CY 2015 case-mix weights. The fifth column shows the effects of the rebasing adjustments to the national, standardized 60-day episode payment rate, the national per-visit payment rates, and NRS conversion factor. The sixth column shows the effects of the CY 2015 home health payment update percentage (the home health market basket update adjusted for multifactor productivity as discussed in section III.D.1. of this final rule). The last column shows the overall payment effects of all the policies discussed in this final rule. As illustrated in Table 41, the combined effects of all of the changes vary by specific types of providers and PO 00000 Frm 00083 Fmt 4701 Sfmt 4700 66113 by location. A substantial amount of the variation in the estimated impacts of the policies finalized in this rule in different areas of the country can be attributed to variations in the CY 2015 wage index used to adjust payments under the HH PPS and to the effects of the recalibration of the HH PPS casemix weights. For example, the estimated impact due to the recalibration of the HH PPS case-mix weights for the West South Central census region is a 2.2 percent decrease in payments for CY 2015. The case-mix weights for third or later episodes of care with no or low therapy generally decreased as a result of the recalibration of the HH PPS casemix weights (see section III.C. of this final rule). In the West South Central region, approximately one-third of episodes are either the first or second episode of care and nearly two-thirds of episodes are the third or later episode of care (analysis of episodes with 0–19 therapy visits). This differs drastically from the rest of the nation where over two-thirds of episodes are either the first or second episode of care and less than one-third of episodes are the third or later episode of care (analysis of episodes with 0–19 therapy visits). Thus, the West South Central census region experiences a larger estimated reduction in payments due to the recalibration of the case-mix weights because it has a much larger share of episodes that are the third or later episode compared to the rest of the nation. Instances where the impact, due to the rebasing adjustments, is less than others can be attributed to differences in the incidence of outlier payments and LUPA episodes, which are paid using the national per-visit payment rates that are subject to payment increases due to the rebasing adjustments. We note that some individual HHAs within the same group may experience different impacts on payments than others due to the distributional impact of the CY 2015 wage index, the extent to which HHAs had episodes in case-mix groups where the case-mix weight decreased for CY 2015 relative to CY 2014, and the degree of Medicare utilization. For CY 2015, the average impact for all HHAs due to the effects of rebasing is an estimated 2.4 percent decrease in payments. The overall impact for all HHAs as a result of this final rule is a decrease of approximately 0.3 percent in estimated total payments from CY 2014 to CY 2015. E:\FR\FM\06NOR2.SGM 06NOR2 66114 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations TABLE 41—ESTIMATED HOME HEALTH AGENCY IMPACTS BY FACILITY TYPE AND AREA OF THE COUNTRY, CY 2015 Number of agencies tkelley on DSK3SPTVN1PROD with RULES2 All Agencies ............................................. Facility Type and Control: Free-Standing/Other Vol/NP ............. Free-Standing/Other Proprietary ...... Free-Standing/Other Government .... Facility-Based Vol/NP ....................... Facility-Based Proprietary ................. Facility-Based Government .............. Subtotal: Freestanding .............. Subtotal: Facility-based ............. Subtotal: Vol/NP ........................ Subtotal: Proprietary .................. Subtotal: Government ................ Facility Type and Control: Rural: Free-Standing/Other Vol/NP ............. Free-Standing/Other Proprietary ...... Free-Standing/Other Government .... Facility-Based Vol/NP ....................... Facility-Based Proprietary ................. Facility-Based Government .............. Facility Type and Control: Urban: Free-Standing/Other Vol/NP ............. Free-Standing/Other Proprietary ...... Free-Standing/Other Government .... Facility-Based Vol/NP ....................... Facility-Based Proprietary ................. Facility-Based Government .............. Facility Location: Urban or Rural: Rural ................................................. Urban ................................................ Facility Location: Region of the Country: Northeast .......................................... Midwest ............................................. South ................................................. West .................................................. Other ................................................. Facility Location: Region of the Country (Census Region): New England .................................... Mid Atlantic ....................................... East North Central ............................ West North Central ........................... South Atlantic .................................... East South Central ........................... West South Central .......................... Mountain ........................................... Pacific ............................................... Facility Size (Number of 1st Episodes): < 100 episodes ................................. 100 to 249 ......................................... 250 to 499 ......................................... 500 to 999 ......................................... 1,000 or More ................................... CY 2015 wage index 1 (percentage) CY 2015 case-mix weights 2 (percentage) Rebasing 3 (percentage) CY 2015 HH payment update percentage 4 Impact of all CY 2015 policies (percentage) 11,781 0.0 0.0 ¥2.4 2.1 ¥0.3 1,062 9,194 402 774 115 234 10,658 1,123 1,836 9,309 636 0.3 ¥0.1 0.4 0.2 ¥0.2 0.2 0.0 0.2 0.3 ¥0.1 0.3 1.0 ¥0.5 0.5 1.6 1.3 1.4 ¥0.2 1.5 1.2 ¥0.5 0.9 ¥2.3 ¥2.4 ¥2.3 ¥2.3 ¥2.3 ¥2.4 ¥2.4 ¥2.3 ¥2.3 ¥2.4 ¥2.3 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 1.1 ¥0.9 0.7 1.6 0.9 1.3 ¥0.5 1.5 1.3 ¥0.9 1.0 192 140 466 251 27 137 0.1 0.9 0.2 0.6 0.1 0.6 1.3 0.6 ¥0.6 1.5 0.3 1.3 ¥2.3 ¥2.4 ¥2.4 ¥2.5 ¥2.5 ¥2.3 2.1 2.1 2.1 2.1 2.1 2.1 1.2 1.2 ¥0.7 1.8 0.0 1.7 922 8,870 164 523 88 97 0.3 ¥0.1 0.3 0.2 ¥0.2 0.0 1.0 ¥0.5 0.5 1.6 1.4 1.4 ¥2.3 ¥2.4 ¥2.4 ¥2.3 ¥2.3 ¥2.4 2.1 2.1 2.1 2.1 2.1 2.1 1.1 ¥0.9 0.5 1.6 1.0 1.1 1,117 10,664 0.4 0.0 0.4 0.0 ¥2.4 ¥2.4 2.1 2.1 0.5 ¥0.3 882 3,165 5,722 1,962 50 0.4 0.2 ¥0.3 0.5 1.7 0.9 0.8 ¥0.9 0.9 1.8 ¥2.2 ¥2.5 ¥2.4 ¥2.4 ¥2.4 2.1 2.1 2.1 2.1 2.1 1.2 0.6 ¥1.5 1.1 3.2 340 542 2,415 750 2,054 440 3,228 689 1,273 0.8 0.1 0.2 0.1 ¥0.1 ¥0.6 ¥0.5 0.4 0.5 0.9 0.9 0.6 1.6 0.0 0.0 ¥2.2 1.5 0.6 ¥2.2 ¥2.1 ¥2.5 ¥2.4 ¥2.4 ¥2.5 ¥2.4 ¥2.4 ¥2.4 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 1.6 1.0 0.4 1.4 ¥0.4 ¥1.0 ¥3.0 1.6 0.8 2,924 2,767 2,569 1,878 1,643 ¥0.3 ¥0.3 ¥0.2 0.0 0.1 ¥0.3 ¥0.6 ¥0.8 ¥0.2 0.3 ¥2.4 ¥2.4 ¥2.4 ¥2.4 ¥2.4 2.1 2.1 2.1 2.1 2.1 ¥0.9 ¥1.2 ¥1.3 ¥0.5 0.1 Source: CY 2013 Medicare claims data for episodes ending on or before December 31, 2013 (as of June 30, 2014) for which we had a linked OASIS assessment. 1 The impact of the CY 2015 home health wage index reflects the transition to new CBSA designations as outlined in section III.D.3 this final rule offset by the wage index budget neutrality factor described in section III.D.4 this final rule. 2 The impact of the CY 2015 home health case-mix weights reflects the recalibration of the case-mix weights as outlined in section III.C of this final rule offset by the case-mix weight budget neutrality factor described in section III.D.4 of this final rule. 3 The impact of rebasing includes the rebasing adjustments to the national, standardized 60-day episode payment rate (¥2.73 percent after the CY 2014 payment rate was adjusted for the wage index and case-mix weight budget neutrality factors), the national per-visit rates (+3.26 percent), and the NRS conversion factor (¥2.82%). The estimated impact of the NRS conversion factor rebasing adjustment is an overall ¥0.01 percent decrease in estimated payments to HHAs. The overall impact of all the rebasing adjustments finalized in the CY 2014 HH PPS proposed rule and implemented for CY 2015 are lower than the overall impact in the CY 2014 due to the case-mix budget neutrality factor and an increase in estimated outlier payments. As the national per-visit rates increase and the national, standardized 60-day episode rate decreases more episodes qualify for outlier payments. In addition, we decreased the fixed-dollar loss (FDL) ratio from 0.67 to 0.45 effective CY 2013 in order to qualify more episodes as outliers, and we use CY 2013 utilization in simulating impacts for the CY 2015 HH PPS final rule. 4 The CY 2015 home health payment update percentage reflects the home health market basket update of 2.6 percent, reduced by a 0.5 percentage point multifactor productivity (MFP) adjustment as required under section 1895(b)(3)(B)(vi)(I) of the Act, as described in section III.D.1 of this final rule. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PO 00000 Frm 00084 Fmt 4701 Sfmt 4700 E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations 66115 Region Key: New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic = Pennsylvania, New Jersey, New York; South Atlantic = Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin; East South Central = Alabama, Kentucky, Mississippi, Tennessee; West North Central = Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central = Arkansas, Louisiana, Oklahoma, Texas; Mountain = Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; Pacific = Alaska, California, Hawaii, Oregon, Washington; Outlying = Guam, Puerto Rico, Virgin Islands. tkelley on DSK3SPTVN1PROD with RULES2 D. Anticipated Effects Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any one year of $100 million in 1995 dollars, updated annually for inflation. In 2014, that threshold is approximately $141 million. This final rule is not anticipated to have an effect on state, local, or tribal governments in the aggregate, or by the private sector, of $141 million or more in CY 2015. E. Alternatives Considered In recalibrating the HH PPS case-mix weights for CY 2015, as discussed in section III.C. of this final rule, we considered adjusting the payment rates in section III.D.4 to make the recalibration budget neutral only with regard to our estimate of real case-mix growth between CY 2012 and the CY 2013. Section 1895(b)(3)(B)(iv) of the Act gives CMS the authority to implement payment reductions for nominal case-mix growth—changes in case-mix that are unrelated to actual changes in patient health status. However, instead of implementing a case-mix budget neutrality factor that only reflects our estimate of real increases in patient severity; we finalized the recalibration of the casemix weights in a fully budget-neutral manner. We will continue to monitor case-mix growth (both real and nominal case-mix growth) as more data become available. With regard to the adoption of the revised OMB delineations for purposes of calculating the wage index, we will implement the new OMB delineations as we believe they will result in wage index values being more representative of the actual costs of labor in a given area. We considered having no transition period and fully implementing the new OMB delineations beginning in CY 2015. However, this would not provide time for HHAs to adapt to the new OMB delineations. We believe that a transition period would help to mitigate the potential for resulting short-term instability and negative impact on certain HHAs, and to provide time for HHAs to adjust to their new labor market area delineations. In determining VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 an appropriate transition methodology, consistent with the objectives set forth in the FY 2006 SNF PPS final rule (70 FR 45041), we first considered transitioning the wage index to the revised OMB delineations over a number of years in order minimize the impact of the wage index changes in a given year. However, the transition must be balanced against the need to ensure the most accurate payments possible, which called for a faster transition to the revised OMB delineations. As such, utilizing a one-year (rather than a multiple year) transition with a blended wage index in CY 2015 will strike the best balance. Second, we considered what type of blend would be appropriate for purposes of the transition wage index. We are finalizing that HHAs will receive a one-year blended wage index using 50 percent of their CY 2015 wage index based on the new OMB delineations and 50 percent of their CY 2015 wage index based on the FY 2014 OMB delineations. A 50/50 blend best mitigates the negative payment impacts associated with the implementation of the new OMB delineations. While we considered alternatives to the 50/50 blend, this type of split balances the increases and decreases in wage index values as well as provides a readily understandable calculation for HHAs. Next, we considered whether or not the blended wage index should be used for all HHAs or for only a subset of HHAs, such as those HHAs that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations. As required in section 1895(b)(3) of the Act, the wage index adjustment must be implemented in a budget-neutral manner. If we were to apply the transition policy only to those HHAs that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations, the wage index budget neutrality factor, discussed in section III.D.4, would result in reduced base rates for all HHAs as compared to the budget neutrality factor that results from applying the blended wage index to all HHAs. For the reasons discussed above, we believe that finalizing our proposal to use a one-year transition with a 50/50 blended wage index in CY 2015 as this PO 00000 Frm 00085 Fmt 4701 Sfmt 4700 policy balances the interests of all HHAs and will best achieve our objective of providing relief to negatively impacted HHAs. Section 3131(a) of the Affordable Care Act mandates that starting in CY 2014, the Secretary must apply an adjustment to the national, standardized 60-day episode payment rate and other amounts applicable under section 1895(b)(3)(A)(i)(III) of the Act to reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode, and other relevant factors. In addition, section 3131(a) of the Affordable Care Act mandates that rebasing must be phased-in over a 4year period in equal increments, not to exceed 3.5 percent of the amount (or amounts) as of the date of enactment (2010) under section 1895(b)(3)(A)(i)(III) of the Act, and be fully implemented in CY 2017. Therefore, in the CY 2014 HH PPS final rule (78 FR 77256), we finalized rebasing adjustments to the national, standardized 60-day episode payment amount, the national per-visit rates and the NRS conversion factor. As we noted in the CY 2014 HH PPS final rule, because section 3131(a) of the Affordable Care Act requires a four year phase-in of rebasing, in equal increments, to start in CY 2014 and be fully implemented in CY 2017, we do not have the discretion to delay, change, or eliminate the rebasing adjustments once we have determined that rebasing is necessary (78 FR 72283). Section 1895(b)(3)(B) of the Act requires that the standard prospective payment amounts for CY 2015 be increased by a factor equal to the applicable home health market basket update for those HHAs that submit quality data as required by the Secretary. For CY 2015, section 3401(e) of the Affordable Care Act, requires that, in CY 2015 (and in subsequent calendar years), the market basket update under the HHA prospective payment system, as described in section 1895(b)(3)(B) of the Act, be annually adjusted by changes in economy-wide productivity. Beginning in CY 2015, section 1895(b)(3)(B)(vi)(I) of the Act, as amended by section 3401(e) of the Affordable Care Act, requires the application of the productivity E:\FR\FM\06NOR2.SGM 06NOR2 66116 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act to the HHA PPS for CY 2015 and each subsequent CY. The ¥0.5 percentage point productivity adjustment to the CY 2015 home health market basket update (2.6 percent) is discussed in the preamble of this rule and is not discretionary as it is a requirement in section 1895(b)(3)(B)(vi)(I) of the Act (as amended by the Affordable Care Act). F. Accounting Statement and Table As required by OMB Circular A–4 (available at https:// www.whitehouse.gov/omb/circulars_ a004_a-4), in Table 42, we have prepared an accounting statement showing the classification of the transfers and costs associated with the provisions of this final rule. Table 42 provides our best estimate of the decrease in Medicare payments under the HH PPS as a result of the changes finalized in this rule. Table 42 also reflects the estimated change in costs and burden for certifying physicians and HHAs as a result of the changes to the face-to-face encounter requirements finalized in section III.B. We estimate a net reduction in burden for certifying physicians of 192,765 hours or $21,796,330 (see section IV of this rule). In addition, Table 42 reflects our estimate of a one-time burden for HHAs to revise the certification form of 5,761 hours or $245,397 as described in section IV. of this rule. TABLE 42—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED TRANSFERS AND COSTS, FROM THE CYS 2014 TO 2015 * Category Transfers Annualized monetized transfers ................................................................................................................................ From Whom to Whom? ............................................................................................................................................. ¥$60 million. Federal Government to HHAs. Category Costs Annualized Monetized Net Burden for Physicians Certifying Patient Eligibility for Home Health Services & HHAs for Certification Form Revision. ¥$21.55 million. * The estimates reflect 2014 dollars. tkelley on DSK3SPTVN1PROD with RULES2 G. Conclusion In conclusion, we estimate that the net impact of this final rule is a decrease in Medicare payments to HHAs of $60 million for CY 2015. The $60 million decrease in estimated payments for CY 2015 reflects the distributional effects of the 2.1 percent CY 2015 home health payment update percentage ($390 million increase) and the second year of the 4-year phase-in of the rebasing adjustments required by section 3131(a) of the Affordable Care Act ($450 million decrease). Also, starting in CY 2015, certifying physicians are estimated to incur a net reduction in burden costs of $21,796,330 and HHAs are expected to incur a one-time increase in burden costs to revise the certification form of $245,397 as a result of the elimination of the face-to-face encounter narrative requirement finalized in section III.B. This analysis, together with the remainder of this preamble, constitutes the Regulatory Flexibility Analysis. VI. Federalism Analysis Executive Order 13132 on Federalism (August 4, 1999) establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has Federalism implications. We have reviewed this final rule under the threshold criteria of Executive Order 13132, Federalism, and have determined that it will not have substantial direct effects on the rights, VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 roles, and responsibilities of states, local or tribal governments. List of Subjects 42 CFR Part 409 Health facilities, Medicare. 42 CFR Part 424 Emergency medical services, Health facilities, Health professions, Medicare, and Reporting and recordkeeping requirements. 42 CFR Part 484 Health facilities, Health professions, Medicare, and Reporting and recordkeeping requirements. 42 CFR Part 488 Administrative practice and procedure, Health facilities, Medicare, and Reporting and recordkeeping requirements. 42 CFR Part 498 Health facilities, Medicare, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR chapter IV as set forth below: PART 409—HOSPITAL INSURANCE BENEFITS 1. The authority citation for part 409 continues to read as follows: ■ Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). PO 00000 Frm 00086 Fmt 4701 Sfmt 4700 § 409.44 [Amended] 2. Section 409.44 is amended by— a. Removing ‘‘intermediary’s’’ from paragraph (a) and adding ‘‘Medicare Administrative Contractor’s’’ in its place. ■ b. Adding ‘‘calendar’’ between ‘‘30’’ and ‘‘days’’ in paragraph (c)(2)(i)(B). ■ c. Removing paragraphs (c)(2)(i)(C) and (D). ■ d. Redesignating paragraphs (c)(2)(i)(E) through (H) as paragraphs (c)(2)(i)(C) through (F). ■ e. Removing ‘‘(c)(2)(i)(A), (B), (C), and (D) of this section,’’ from newly redesignated paragraph (c)(2)(i)(C) introductory text and adding ‘‘(c)(2)(i)(A) and (B) of this section,’’ in its place. ■ f. Removing ‘‘(c)(2)(i)(E)(2) and (c)(2)(i)(E)(3) of this section are met,’’ from newly redesignated paragraph (c)(2)(i)(C)(1) and adding ‘‘(c)(2)(i)(C)(2) and (c)(2)(i)(C)(3) of this section are met,’’ in its place. ■ g. Removing ‘‘§ 409.44(c)(2)(i)(H) of this section.’’ from newly redesignated paragraph (c)(2)(i)(C)(3) and adding ‘‘paragraph (c)(2)(i)(F) of this section.’’ in its place. ■ ■ PART 424—CONDITIONS FOR MEDICARE PAYMENT 3. The authority citation for part 424 continues to read as follows: ■ Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). ■ 4. Section 424.22 is amended by— E:\FR\FM\06NOR2.SGM 06NOR2 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations a. Revising paragraphs (a) and (b) and adding new paragraph (c). ■ b. Removing ‘‘(d)(i)’’ from paragraph (d)(2) and adding ‘‘(d)(1)’’ in its place. The revisions read as follows: ■ § 424.22 Requirements for home health services. tkelley on DSK3SPTVN1PROD with RULES2 * * * * * (a) Certification—(1) Content of certification. As a condition for payment of home health services under Medicare Part A or Medicare Part B, a physician must certify the patient’s eligibility for the home health benefit, as outlined in sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, as follows in paragraphs (a)(1)(i) through (v) of this section. The patient’s medical record, as specified in paragraph (c) of this section, must support the certification of eligibility as outlined in paragraph (a)(1)(i) through (v) of this section. (i) The individual needs or needed intermittent skilled nursing care, or physical therapy or speech-language pathology services as defined in § 409.42(c) of this chapter. If a patient’s underlying condition or complication requires a registered nurse to ensure that essential non-skilled care is achieving its purpose, and necessitates a registered nurse be involved in the development, management, and evaluation of a patient’s care plan, the physician will include a brief narrative describing the clinical justification of this need. If the narrative is part of the certification form, then the narrative must be located immediately prior to the physician’s signature. If the narrative exists as an addendum to the certification form, in addition to the physician’s signature on the certification form, the physician must sign immediately following the narrative in the addendum. (ii) Home health services are or were required because the individual is or was confined to the home, as defined in sections 1835(a) and 1814(a) of the Act, except when receiving outpatient services. (iii) A plan for furnishing the services has been established and will be or was periodically reviewed by a physician who is a doctor of medicine, osteopathy, or podiatric medicine, and who is not precluded from performing this function under paragraph (d) of this section. (A doctor of podiatric medicine may perform only plan of treatment functions that are consistent with the functions he or she is authorized to perform under State law.) (iv) The services will be or were furnished while the individual was under the care of a physician who is a doctor of medicine, osteopathy, or podiatric medicine. VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 (v) A face-to-face patient encounter, which is related to the primary reason the patient requires home health services, occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care and was performed by a physician or allowed non-physician practitioner as defined in paragraph (a)(1)(v)(A) of this section. The certifying physician must also document the date of the encounter as part of the certification. (A) The face-to-face encounter must be performed by one of the following: (1) The certifying physician himself or herself. (2) A physician, with privileges, who cared for the patient in an acute or postacute care facility from which the patient was directly admitted to home health. (3) A nurse practitioner or a clinical nurse specialist (as those terms are defined in section 1861(aa)(5) of the Act) who is working in accordance with State law and in collaboration with the certifying physician or in collaboration with an acute or post-acute care physician with privileges who cared for the patient in the acute or post-acute care facility from which the patient was directly admitted to home health. (4) A certified nurse midwife (as defined in section 1861(gg) of the Act) as authorized by State law, under the supervision of the certifying physician or under the supervision of an acute or post-acute care physician with privileges who cared for the patient in the acute or post-acute care facility from which the patient was directly admitted to home health. (5) A physician assistant (as defined in section 1861(aa)(5) of the Act) under the supervision of the certifying physician or under the supervision of an acute or post-acute care physician with privileges who cared for the patient in the acute or post-acute care facility from which the patient was directly admitted to home health. (B) The face-to-face patient encounter may occur through telehealth, in compliance with section 1834(m) of the Act and subject to the list of payable Medicare telehealth services established by the applicable physician fee schedule regulation. (1) Timing and signature. The certification of need for home health services must be obtained at the time the plan of care is established or as soon thereafter as possible and must be signed and dated by the physician who establishes the plan. (2) [Reserved] (2) [Reserved] PO 00000 Frm 00087 Fmt 4701 Sfmt 4700 66117 (b) Recertification—(1) Timing and signature of recertification. Recertification is required at least every 60 days when there is a need for continuous home health care after an initial 60-day episode. Recertification should occur at the time the plan of care is reviewed, and must be signed and dated by the physician who reviews the plan of care. Recertification is required at least every 60 days unless there is a— (i) Beneficiary elected transfer; or (ii) Discharge with goals met and/or no expectation of a return to home health care. (2) Content and basis of recertification. The recertification statement must indicate the continuing need for services and estimate how much longer the services will be required. Need for occupational therapy may be the basis for continuing services that were initiated because the individual needed skilled nursing care or physical therapy or speech therapy. If a patient’s underlying condition or complication requires a registered nurse to ensure that essential non-skilled care is achieving its purpose, and necessitates a registered nurse be involved in the development, management, and evaluation of a patient’s care plan, the physician will include a brief narrative describing the clinical justification of this need. If the narrative is part of the recertification form, then the narrative must be located immediately prior to the physician’s signature. If the narrative exists as an addendum to the recertification form, in addition to the physician’s signature on the recertification form, the physician must sign immediately following the narrative in the addendum. (c) Determining patient eligibility for Medicare home health services. Documentation in the certifying physician’s medical records and/or the acute/post-acute care facility’s medical records (if the patient was directly admitted to home health) shall be used as the basis for certification of home health eligibility. This documentation shall be provided upon request to the home health agency, review entities, and/or CMS. Criteria for patient eligibility are described in paragraphs (a)(1) and (b) of this section. If the documentation used as the basis for the certification of eligibility is not sufficient to demonstrate that the patient is or was eligible to receive services under the Medicare home health benefit, payment will not be rendered for home health services provided. * * * * * E:\FR\FM\06NOR2.SGM 06NOR2 66118 Federal Register / Vol. 79, No. 215 / Thursday, November 6, 2014 / Rules and Regulations PART 484—HOME HEALTH SERVICES 5. The authority citation for part 484 continues to read as follows: ■ 8. The authority citation for part 488 continues to read as follows: ■ Authority: Secs 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395(hh)) unless otherwise indicated. 6. Section 484.4 is amended by revising the definition of ‘‘Speechlanguage pathologist’’ to read as follows: ■ § 484.4 Personnel qualifications. * * * * * Speech-language pathologist. A person who has a master’s or doctoral degree in speech-language pathology, and who meets either of the following requirements: (a) Is licensed as a speech-language pathologist by the State in which the individual furnishes such services; or (b) In the case of an individual who furnishes services in a State which does not license speech-language pathologists: (1) Has successfully completed 350 clock hours of supervised clinical practicum (or is in the process of accumulating such supervised clinical experience); (2) Performed not less than 9 months of supervised full-time speech-language pathology services after obtaining a master’s or doctoral degree in speechlanguage pathology or a related field; and (3) Successfully completed a national examination in speech-language pathology approved by the Secretary. ■ 7. Section 484.250 is amended by revising paragraph (a)(1) to read as follows: § 484.250 Patient assessment data. tkelley on DSK3SPTVN1PROD with RULES2 (a) * * * (1) The OASIS data described at § 484.55(b)(1) and (d)(1) for CMS to administer the payment rate methodologies described in §§ 484.215, 484.230, and 484.235, and to meet the quality reporting requirements of section 1895(b)(3)(B)(v) of the Act. * * * * * VerDate Sep<11>2014 20:03 Nov 05, 2014 Jkt 235001 PART 488—SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES Authority: Secs. 1102, 1128I and 1871 of the Social Security Act, unless otherwise noted (42 U.S.C. 1302, 1320a–7j, and 1395hh); Pub. L. 110–149, 121 Stat. 1819. 9. Section 488.845 is amended by adding paragraph (h) to read as follows: ■ § 488.845 Civil money penalties. * * * * * (h) Review of the penalty. When an administrative law judge or state hearing officer (or higher administrative review authority) finds that the basis for imposing a civil monetary penalty exists, as specified in this part, the administrative law judge, State hearing officer (or higher administrative review authority) may not— (1) Set a penalty of zero or reduce a penalty to zero; (2) Review the exercise of discretion by CMS to impose a civil monetary penalty; and (3) Consider any factors in reviewing the amount of the penalty other than those specified in paragraph (b) of this section. PART 498—APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT AFFECT THE PARTCIPATION OF ICFS/IID AND CERTAIN NFS IN THE MEDICAID PROGRAM 10. The authority citation for part 498 continues to read as follows: ■ Authority: Secs. 1102, 1128I and 1871 of the Social Security Act (42 U.S.C. 1302, 1320a–7j, and 1395hh). 11. Section 498.3 is amended by revising paragraphs (b)(13) and (14)(i) to read as follows: ■ § 498.3 * PO 00000 * Scope and applicability. * Frm 00088 * Fmt 4701 * Sfmt 9990 (b) * * * (13) Except as provided at paragraph (d)(12) of this section for SNFs, NFs, and HHAs, the finding of noncompliance leading to the imposition of enforcement actions specified in § 488.406 or 488.820 of this chapter, but not the determination as to which sanction was imposed. The scope of review on the imposition if a civil money penalty is specified in §§ 488.438(e) and 488.845(h) of this chapter. (14) * * * (i) The range of civil money penalty amounts that CMS could collect (for SNFs or NFs, the scope of review during a hearing on the imposition of a civil money penalty is set forth in § 488.438(e) of this chapter and for HHAs, the scope of review during a hearing on the imposition of a civil money penalty is set forth in § 488.845(h) of this chapter); or * * * * * 12. Section 498.60 is amended by revising paragraphs (c)(1) and (2) to read as follows: ■ § 498.60 Conduct of hearing. * * * * * (c) * * * (1) The scope of review is as specified in §§ 488.438(e) and 488.845(h) of this chapter; and (2) CMS’ determination as to the level of noncompliance of a SNF, NF, or HHA must be upheld unless it is clearly erroneous. Dated: October 22, 2014. Marilyn Tavenner, Administrator, Centers for Medicare & Medicaid Services. Approved: October 28, 2014. Sylvia M. Burwell, Secretary, Department of Health and Human Services. [FR Doc. 2014–26057 Filed 10–30–14; 4:15 pm] BILLING CODE 4120–01–P E:\FR\FM\06NOR2.SGM 06NOR2

Agencies

[Federal Register Volume 79, Number 215 (Thursday, November 6, 2014)]
[Rules and Regulations]
[Pages 66031-66118]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-26057]

[[Page 66031]]

Vol. 79

Thursday,

No. 215

November 6, 2014

Part II

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Parts 409, 424, et al.

Medicare and Medicaid Programs; CY 2015 Home Health Prospective
Payment System Rate Update; Home Health Quality Reporting Requirements;
and Survey and Enforcement Requirements for Home Health Agencies; Final
Rule

Federal Register / Vol. 79 , No. 215 / Thursday, November 6, 2014 /
Rules and Regulations

[[Page 66032]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 409, 424, 484, 488, 498

[CMS-1611-F]
RIN 0938-AS14

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

ACTION: Final rule.

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SUMMARY: This final rule updates Home Health Prospective Payment System
(HH PPS) rates, including the national, standardized 60-day episode
payment rates, the national per-visit rates, and the non-routine
medical supply (NRS) conversion factor under the Medicare prospective
payment system for home health agencies (HHAs), effective for episodes
ending on or after January 1, 2015. As required by the Affordable Care
Act, this rule implements the second year of the four-year phase-in of
the rebasing adjustments to the HH PPS payment rates. This rule
provides information on our efforts to monitor the potential impacts of
the rebasing adjustments and the Affordable Care Act mandated face-to-
face encounter requirement. This rule also implements: Changes to
simplify the face-to-face encounter regulatory requirements; changes to
the HH PPS case-mix weights; changes to the home health quality
reporting program requirements; changes to simplify the therapy
reassessment timeframes; a revision to the Speech-Language Pathology
(SLP) personnel qualifications; minor technical regulations text
changes; and limitations on the reviewability of the civil monetary
penalty provisions. Finally, this rule also discusses Medicare coverage
of insulin injections under the HH PPS, the delay in the implementation
of the International Classification of Diseases, Tenth Revision,
Clinical Modification (ICD-10-CM), and a HH value-based purchasing (HH
VBP) model.

DATES: Effective Date: These regulations are effective on January 1,
2015.

FOR FURTHER INFORMATION CONTACT:
Hillary Loeffler, (410) 786-0456, for general information about the
HH PPS.
Joan Proctor, (410) 786-0949, for information about the HH PPS
Grouper, ICD-9-CM coding, and ICD-10-CM Conversion.
Kristine Leddy, (410) 786-8953, for information about rebasing and
the HH PPS case-mix weights.
Hudson Osgood, (410) 786-7897, for information about the HH market
basket.
Alan Levitt, MD, (410) 786-6892, for information about the HH
quality reporting program.
Lori Teichman, (410) 786-6684, for information about HHCAHPS.
Peggye Wilkerson, (410) 786-4857, for information about survey and
enforcement requirements for HHAs.
Robert Flemming, (410) 786-4830, for information about the HH VBP
model.
Danielle Shearer, (410) 786-6617, for information about SLP
personnel qualifications.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Costs and Benefits
II. Background
A. Statutory Background
B. System for Payment of Home Health Services
C. Updates to the HH PPS
III. Provisions of the Proposed Rule and Responses to Comments
A. Monitoring for Potential Impacts--Affordable Care Act
Rebasing Adjustments and the Face-to-Face Encounter Requirement
1. Affordable Care Act Rebasing Adjustments
2. Affordable Care Act Face-to-Face Encounter Requirement
B. Changes to the Face-to-Face Encounter Documentation
Requirements
1. Background on Statutory and Regulatory Requirements
2. Changes to the Face-to-Face Encounter Narrative Requirement
and Non-Coverage of Associated Physician Certification/Re-
Certification Claims
3. Clarification on When Documentation of a Face-to-Face
Encounter is Required
C. Recalibration of the HH PPS Case-Mix Weights
D. CY 2015 Home Health Rate Update
1. CY 2015 Home Health Market Basket Update
2. Home Health Care Quality Reporting Program (HH QRP)
a. General Considerations Used for Selection of Quality Measures
for the HH QRP
b. Background and Quality Reporting Requirements
c. OASIS Data Submission and OASIS Data for Annual Payment
Update
d. Updates to HH QRP Measures After NQF Review
e. Home Health Care CAHPS Survey (HHCAHPS)
3. CY 2015 Home Health Wage Index
a. Background
b. Update
c. Implementation of New Labor Market Delineations
4. CY 2015 Annual Payment Update
a. Background
b. CY 2015 National, Standardized 60-Day Episode Payment Rate
c. CY 2015 National Per-Visit Rates
d. Low-Utilization Payment Adjustment (LUPA) Add-On Factors
e. CY 2015 Nonroutine Medical Supply Conversion Factor and
Relative Weights
f. Rural Add-On
E. Payments for High-Cost Outliers under the HH PPS
1. Background
2. Fixed Dollar Loss (FDL) Ratio and Loss-Sharing Ratio
F. Medicare Coverage of Insulin Injections under the HH PPS
G. Implementation of the International Classification of
Diseases, 10th Revision, Clinical Modification (ICD-10-CM)
H. Change to the Therapy Reassessment Timeframes
I. HH Value-Based Purchasing (HH VBP) Model
J. Advancing Health Information Exchange
K. Revisions to the Speech-Language Pathologist Personnel
Qualifications
L. Technical Regulations Text Changes
M. Survey and Enforcement Requirements for Home Health Agencies
1. Statutory Background and Authority
2. Reviewability Pursuant to Appeals
3. Technical Adjustment
IV. Collection of Information Requirements
V. Regulatory Impact Analysis
VI. Federalism Analysis
Regulations Text

Acronyms

In addition, because of the many terms to which we refer by
abbreviation in this final rule, we are listing these abbreviations and
their corresponding terms in alphabetical order below:

ACH LOS Acute Care Hospital Length of Stay
ADL Activities of Daily Living
APU Annual Payment Update
BBA Balanced Budget Act of 1997, Pub. L. 105-33
BBRA Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999, Pub. L. 106-113
CAD Coronary Artery Disease
CAH Critical Access Hospital
CBSA Core-Based Statistical Area
CASPER Certification and Survey Provider Enhanced Reports
CHF Congestive Heart Failure
CMI Case-Mix Index
CMN Certificate of Medical Necessity
CMP Civil Money Penalty
CMS Centers for Medicare & Medicaid Services
CoPs Conditions of Participation
COPD Chronic Obstructive Pulmonary Disease
CPI Center for Program Integrity
CVD Cardiovascular Disease
CY Calendar Year

[[Page 66033]]

DM Diabetes Mellitus
DME Durable Medical Equipment
DMEPOS Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies
DIF DME Information Form
DRA Deficit Reduction Act of 2005, Pub. L. 109-171, enacted February
8, 2006
FDL Fixed Dollar Loss
FI Fiscal Intermediaries
FR Federal Register
FY Fiscal Year
HAVEN Home Assessment Validation and Entry System
HCC Hierarchical Condition Categories
HCPCS Healthcare Common Procedure Coding System
HCIS Health Care Information System
HH Home Health
HHA Home Health Agency
HHCAHPS Home Health Care Consumer Assessment of Healthcare Providers
and Systems Survey
HH PPS Home Health Prospective Payment System
HHRG Home Health Resource Group
HIPPS Health Insurance Prospective Payment System
ICD-9-CM International Classification of Diseases, Ninth Revision,
Clinical Modification
ICD-10-CM International Classification of Diseases, Tenth Revision,
Clinical Modification
IH Inpatient Hospitalization
IRF Inpatient Rehabilitation Facility
IT Information Technology
LTCH Long-Term Care Hospital
LUPA Low-Utilization Payment Adjustment
MEPS Medical Expenditures Panel Survey
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Pub. L. 108-173, enacted December 8, 2003
MSA Metropolitan Statistical Area
MSS Medical Social Services
NQF National Quality Forum
NRS Non-Routine Supplies
OASIS Outcome and Assessment Information Set
OBRA Omnibus Budget Reconciliation Act of 1987, Pub. L. 100-2-3,
enacted December 22, 1987
OCESAA Omnibus Consolidated and Emergency Supplemental
Appropriations Act, Pub. L. 105-277, enacted October 21, 1998
OES Occupational Employment Statistics
OIG Office of Inspector General
OT Occupational Therapy
OMB Office of Management and Budget
ONC Office of the National Coordinator for Health IT
MFP Multifactor productivity
PAMA Protecting Access to Medicare Act of 2014
PAC-PRD Post-Acute Care Payment Reform Demonstration
PEP Partial Episode Payment Adjustment
PT Physical Therapy
QAO Quality Assessments Only
QAP Quality Assurance Plan
PRRB Provider Reimbursement Review Board
RAP Request for Anticipated Payment
RF Renal Failure
RFA Regulatory Flexibility Act, Pub. L. 96--354
RHHIs Regional Home Health Intermediaries
RIA Regulatory Impact Analysis
SAF Standard Analytic File
SLP Speech-Language Pathology
SN Skilled Nursing
SNF Skilled Nursing Facility
SOC Start of Care
UMRA Unfunded Mandates Reform Act of 1995.

I. Executive Summary

A. Purpose

This rule updates the payment rates for HHAs for calendar year (CY)
2015, as required under section 1895(b) of the Social Security Act (the
Act). This will reflect the second year of the four-year phase-in of
the rebasing adjustments to the national, standardized 60-day episode
payment rate, the national per-visit rates, and the NRS conversion
factor finalized in the CY 2014 HH PPS final rule (78 FR 72256),
required under section 3131(a) of the Patient Protection and Affordable
Care Act of 2010 (Pub. L. 111-148), as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152) (collectively
referred to as the ``Affordable Care Act''). Updates to payment rates
under the HH PPS will also include a change in the home health wage
index to incorporate the new Office of Management and Budget (OMB)
core-based statistical area (CBSA) definitions and updates to the
payment rates by the home health payment update percentage reflective
of the productivity adjustment mandated by 3401(e) of the Affordable
Care Act.
This final rule also discusses: Our efforts to monitor the
potential impacts of the Affordable Care Act mandated rebasing
adjustments and the face-to-face encounter requirement (sections
3131(a) and 6407, respectively, of the Affordable Care Act); coverage
of insulin injections under the HH PPS; and the delay in the
implementation of the International Classification of Diseases, 10th
Edition, Clinical Modification (ICD-10-CM) as a result of recent
Congressional action (section 212 of the Protecting Access to Medicare
Act, Public Law 113-93 (``PAMA'')). This final rule also: Simplifies
the regulations at Sec. 424.22(a)(1)(v) that govern the face-to-face
encounter requirement mandated by section 6407 of the Affordable Care
Act; recalibrates the HH PPS case-mix weights under section
1895(b)(4)(A)(i) and (b)(4)(B) of the Act; makes changes to the home
health quality reporting program requirements under section
1895(b)(3)(B)(v)(II) of the Act; simplifies the therapy reassessment
timeframes specified in regulation at Sec. 409.44(c)(2)(C) and (D);
revises the personnel qualifications for Speech-Language Pathology
(SLP) at Sec. 484.4; and makes minor technical changes to the
regulations text at Sec. 424.22(b)(1) and Sec. 484.250(a)(1). This
final rule will also place limitations on the reviewability of CMS's
decision to impose a civil monetary penalty for noncompliance with
Federal participation requirements. Finally, this rule discusses
comments received on the HH Value-Based Purchasing (VBP) model.

B. Summary of the Major Provisions

As required by section 3131(a) of the Affordable Care Act and
finalized in the CY 2014 HH final rule, ``Medicare and Medicaid
Programs; Home Health Prospective Payment System Rate Update for CY
2014, Home Health Quality Reporting Requirements, and Cost Allocation
of Home Health Survey Expenses'' (78 FR 77256, December 2, 2013), we
are implementing the second year of the four-year phase-in of the
rebasing adjustments to the national, standardized 60-day episode
payment amount, the national per-visit rates and the NRS conversion
factor in section III.D.4. The rebasing adjustments for CY 2015 will
reduce the national, standardized 60-day episode payment amount by
$80.95, increase the national per-visit payment amounts by 3.5 percent
of the national per-visit payment amounts in CY 2010 with the increases
ranging from $1.79 for home health aide services to $6.34 for medical
social services as described in section II.C, and reduce the NRS
conversion factor by 2.82 percent.
This final rule also discusses our efforts to monitor the potential
impacts of the rebasing adjustments and the Affordable Care Act
mandated face-to-face encounter requirement in sections III.A. Section
III B implements changes to the face-to-face encounter narrative
requirement by eliminating the narrative as part of the certification
of eligibility and by outlining procedures for obtaining documentation
from the certifying physician and/or the acute/post-acute care facility
that: (1) Establish that the patient was eligible for the home health
benefit; and (2) demonstrate that the face-to-face encounter was
related to the primary reason the patient requires home health
services, occurred within the required timeframe, and was performed
either by the certifying physician, an acute/post-acute care physician
that cared for the patient in that setting, or allowed non-physician
practitioner (NPP). In addition, associated physician claims for
certification/re-certification of eligibility (patient not present)
will not

[[Page 66034]]

be eligible to be paid when a patient does not meet home health
eligibility criteria. We will also clarify that the face-to-face
encounter requirement is applicable for all episodes initiated with the
completion of a Start-of-Care OASIS assessment, which we consider
certifications, not re-certifications. In section III.C of the final
rule, we are recalibrating the HH PPS case-mix weights, using the most
current cost and utilization data available, in a budget neutral
manner. In section III.D.1 of this final rule, we are updating the
payment rates under the HH PPS by the home health payment update
percentage of 2.1 percent (using the 2010-based Home Health Agency
(HHA) market basket update of 2.6 percent, minus 0.5 percentage point
for productivity as required by section 1895(b)(3)(B)(vi)(I) of the
Act. In section III.D.3 of this final rule, we are updating the home
health wage index using a 50/50 blend of the existing core-based
statistical area (CBSA) designations and the new CBSA designations set
out in a February 28, 2013, Office of Management and Budget (OMB)
bulletin.
This final rule also implements changes to the home health quality
reporting program in section III.D.2, including the establishment of a
minimum threshold for submission of OASIS assessments for purposes of
quality reporting compliance, the establishment of a policy for the
adoption of changes to measures that occur in-between rulemaking cycles
as a result of the NQF process, and submission dates for the HHCAHPS
Survey moving forward through CY 2017. In section III.E of this final
rule, we discuss our rationale for maintaining the existing fixed-
dollar loss (FDL) and loss-sharing ratios used in calculating high-cost
outlier payments under the HH PPS. In section III.F, we discuss our
recent analysis of home health claims identified with skilled nursing
visits that appear to have been for the sole purpose of insulin
injection assistance, without any secondary diagnoses indicating that
the patient was physically or mentally unable to self-inject. We
discuss, in section III.G of this final rule, the delay in the
implementation of ICD-10-CM as a result of section 212 of PAMA. In
section III.H of this final rule, we discuss our finalizing of a change
in the therapy reassessment regulations by requiring that therapy
reassessments are to occur at least every 30 calendar days. In section
III.I of this final rule, we discuss a HH VBP model. In section III.J
we discuss our revision to the personnel qualifications for SLP. In
section III.K we discuss minor technical regulations text changes. In
section III.L we discuss our revision to the civil monetary provisions,
which place limitations on the reviewability of the civil monetary
penalty imposed on a HHA for noncompliance with federal participation
requirements.

C. Summary of Costs and Transfers

Table 1--Summary of Costs and Transfers
------------------------------------------------------------------------
Provision Description Costs Transfers
------------------------------------------------------------------------
CY 2015 HH PPS Payment Rate A net reduction in The overall economic
Update. burden of $21.55 impact of this
million associated final rule is an
with certifying estimated $60
patient eligibility million in
for home health decreased payments
services & to HHAs.
certification form
revisions.
------------------------------------------------------------------------

II. Background

A. Statutory Background

The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33, enacted
August 5, 1997), significantly changed the way Medicare pays for
Medicare HH services. Section 4603 of the BBA mandated the development
of the HH PPS. Until the implementation of the HH PPS on October 1,
2000, HHAs received payment under a retrospective reimbursement system.
Section 4603(a) of the BBA mandated the development of a HH PPS for
all Medicare-covered HH services provided under a plan of care (POC)
that were paid on a reasonable cost basis by adding section 1895 of the
Social Security Act (the Act), entitled ``Prospective Payment For Home
Health Services.'' Section 1895(b)(1) of the Act requires the Secretary
to establish a HH PPS for all costs of HH services paid under Medicare.
Section 1895(b)(3)(A) of the Act requires the following: (1) The
computation of a standard prospective payment amount include all costs
for HH services covered and paid for on a reasonable cost basis and
that such amounts be initially based on the most recent audited cost
report data available to the Secretary; and (2) the standardized
prospective payment amount be adjusted to account for the effects of
case-mix and wage levels among HHAs.
Section 1895(b)(3)(B) of the Act addresses the annual update to the
standard prospective payment amounts by the HH applicable percentage
increase. Section 1895(b)(4) of the Act governs the payment
computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act
require the standard prospective payment amount to be adjusted for
case-mix and geographic differences in wage levels, respectively.
Section 1895(b)(4)(B) of the Act requires the establishment of an
appropriate case-mix change adjustment factor for significant variation
in costs among different units of services.
Similarly, section 1895(b)(4)(C) of the Act requires the
establishment of wage adjustment factors that reflect the relative
level of wages, and wage-related costs applicable to HH services
furnished in a geographic area compared to the applicable national
average level. Under section 1895(b)(4)(C) of the Act, the wage-
adjustment factors used by the Secretary may be the factors used under
section 1886(d)(3)(E) of the Act.
Section 1895(b)(5) of the Act gives the Secretary the option to
make additions or adjustments to the payment amount otherwise paid in
the case of outliers due to unusual variations in the type or amount of
medically necessary care. Section 3131(b)(2) of the Patient Protection
and Affordable Care Act of 2010 (the Affordable Care Act) (Pub. L. 111-
148, enacted March 23, 2010) revised section 1895(b)(5) of the Act so
that total outlier payments in a given year would not exceed 2.5
percent of total payments projected for the year. The provision also
made permanent a 10 percent agency-level outlier payment cap.
In accordance with the statute, as amended by the BBA, we published
a final rule in the July 3, 2000 Federal Register (65 FR 41128) to
implement the HH PPS legislation. The July 2000 final rule established
requirements for the new HH PPS for HH services as required by section
4603 of the BBA, as subsequently amended by section 5101 of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act (OCESAA) for
Fiscal Year 1999, (Pub. L. 105-277, enacted October 21, 1998); and by
sections 302, 305, and 306 of the Medicare, Medicaid, and SCHIP
Balanced Budget Refinement

[[Page 66035]]

Act (BBRA) of 1999, (Pub. L. 106-113, enacted November 29, 1999). The
requirements include the implementation of a HH PPS for HH services,
consolidated billing requirements, and a number of other related
changes. The HH PPS described in that rule replaced the retrospective
reasonable cost-based system that was used by Medicare for the payment
of HH services under Part A and Part B. For a complete and full
description of the HH PPS as required by the BBA, see the July 2000 HH
PPS final rule (65 FR 41128 through 41214).
Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L.
109-171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v)
to the Act, requiring HHAs to submit data for purposes of measuring
health care quality, and links the quality data submission to the
annual applicable percentage increase. This data submission requirement
is applicable for CY 2007 and each subsequent year. If a HHA does not
submit quality data, the HH market basket percentage increase is
reduced by 2 percentage points. In the November 9, 2006 Federal
Register (71 FR 65884, 65935), we published a final rule to implement
the pay-for-reporting requirement of the DRA, which was codified at
Sec. 484.225(h) and (i) in accordance with the statute. The pay-for-
reporting requirement was implemented on January 1, 2007.
The Affordable Care Act made additional changes to the HH PPS;
section 3131(c) of the Affordable Care Act amended section 421(a) of
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (MMA) (Pub. L. 108-173, enacted on December 8, 2003) as amended by
section 5201(b) of the DRA. The amended section 421(a) of the MMA now
requires, for HH services furnished in a rural area (as defined in
section 1886(d)(2)(D) of the Act) with respect to episodes and visits
ending on or after April 1, 2010, and before January 1, 2016, that the
Secretary increase, by 3 percent, the payment amount otherwise made
under section 1895 of the Act.

B. System for Payment of Home Health Services

Generally, Medicare makes payment under the HH PPS on the basis of
a national standardized 60-day episode payment rate that is adjusted
for the applicable case-mix and wage index. The national standardized
60-day episode rate includes the six HH disciplines (skilled nursing,
HH aide, physical therapy, speech-language pathology, occupational
therapy, and medical social services). Payment for non-routine supplies
(NRS) is no longer part of the national standardized 60-day episode
rate and is computed by multiplying the relative weight for a
particular NRS severity level by the NRS conversion factor (See section
II.D.4.e). Payment for durable medical equipment covered under the HH
benefit is made outside the HH PPS payment system. To adjust for case-
mix, the HH PPS uses a 153-category case-mix classification system to
assign patients to a home health resource group (HHRG). The clinical
severity level, functional severity level, and service utilization are
computed from responses to selected data elements in the OASIS
assessment instrument and are used to place the patient in a particular
HHRG. Each HHRG has an associated case-mix weight which is used in
calculating the payment for an episode.
For episodes with four or fewer visits, Medicare pays national per-
visit rates based on the discipline(s) providing the services. An
episode consisting of four or fewer visits within a 60-day period
receives what is referred to as a low-utilization payment adjustment
(LUPA). Medicare also adjusts the national standardized 60-day episode
payment rate for certain intervening events that are subject to a
partial episode payment adjustment (PEP adjustment). For certain cases
that exceed a specific cost threshold, an outlier adjustment may also
be available.

C. Updates to the HH PPS

As required by section 1895(b)(3)(B) of the Act, we have
historically updated the HH PPS rates annually in the Federal Register.
The August 29, 2007 final rule with comment period set forth an update
to the 60-day national episode rates and the national per-visit rates
under the HH PPS for CY 2008. The CY 2008 HH PPS final rule included an
analysis performed on CY 2005 HH claims data, which indicated a 12.78
percent increase in the observed case-mix since 2000. Case-mix
represents the variations in conditions of the patient population
served by the HHAs. Subsequently, a more detailed analysis was
performed on the 2005 case-mix data to evaluate if any portion of the
12.78 percent increase was associated with a change in the actual
clinical condition of HH patients. We examined data on demographics,
family severity, and non-HH Part A Medicare expenditures to predict the
average case-mix weight for 2005. We identified 8.03 percent of the
total case-mix change as real, and therefore, decreased the 12.78
percent of total case-mix change by 8.03 percent to get a final nominal
case-mix increase measure of 11.75 percent (0.1278 * (1--0.0803) =
0.1175).
To account for the changes in case-mix that were not related to an
underlying change in patient health status, we implemented a reduction,
over 4 years, to the national, standardized 60-day episode payment
rates. That reduction was to be 2.75 percent per year for 3 years
beginning in CY 2008 and 2.71 percent for the fourth year in CY 2011.
In the CY 2011 HH PPS final rule (76 FR 68532), we updated our analyses
of case-mix change and finalized a reduction of 3.79 percent, instead
of 2.71 percent, for CY 2011 and deferred finalizing a payment
reduction for CY 2012 until further study of the case-mix change data
and methodology was completed.
In the CY 2012 HH PPS final rule (76 FR 68526), we updated the 60-
day national episode rates and the national per-visit rates. In
addition, as discussed in the CY 2012 HH PPS final rule (76 FR 68528),
our analysis indicated that there was a 22.59 percent increase in
overall case-mix from 2000 to 2009 and that only 15.76 percent of that
overall observed case-mix percentage increase was due to real case-mix
change. As a result of our analysis, we identified a 19.03 percent
nominal increase in case-mix. At that time, to fully account for the
19.03 percent nominal case-mix growth identified from 2000 to 2009, we
finalized a 3.79 percent payment reduction in CY 2012 and a 1.32
percent payment reduction for CY 2013.
In the CY 2013 HH PPS final rule (77 FR 67078), we implemented a
1.32 percent reduction to the payment rates for CY 2013 to account for
nominal case-mix growth from 2000 through 2010. When taking into
account the total measure of case-mix change (23.90 percent) and the
15.97 percent of total case-mix change estimated as real from 2000 to
2010, we obtained a final nominal case-mix change measure of 20.08
percent from 2000 to 2010 (0.2390 * (1--0.1597) = 0.2008). To fully
account for the remainder of the 20.08 percent increase in nominal
case-mix beyond that which was accounted for in previous payment
reductions, we estimated that the percentage reduction to the national,
standardized 60-day episode rates for nominal case-mix change will be
2.18 percent. Although we considered proposing a 2.18 percent reduction
to account for the remaining increase in measured nominal case-mix, we
finalized the 1.32 percent payment reduction to the national,
standardized 60-day episode rates in the CY 2012 HH PPS final rule (76
FR 68532).

[[Page 66036]]

Section 3131(a) of the Affordable Care Act requires that, beginning
in CY 2014, CMS apply an adjustment to the national, standardized 60-
day episode rate and other amounts that reflect factors such as changes
in the number of visits in an episode, the mix of services in an
episode, the level of intensity of services in an episode, the average
cost of providing care per episode, and other relevant factors.
Additionally, CMS must phase in any adjustment over a four-year period
in equal increments, not to exceed 3.5 percent of the amount (or
amounts) as of the date of enactment of the Affordable Care Act, and
fully implement the rebasing adjustments by CY 2017. The statute
specifies that the maximum rebasing adjustment is to be no more than
3.5 percent per year of the CY 2010 rates. Therefore, in the CY 2014 HH
PPS final rule (78 FR 72256) for each year, CY 2014 through CY 2017, we
finalized a fixed-dollar reduction to the national, standardized 60-day
episode payment rate of $80.95 per year, increases to the national per-
visit payment rates per year as reflected in Table 2, and a decrease to
the NRS conversion factor of 2.82 percent per year. We also finalized
three separate LUPA add-on factors for skilled nursing, physical
therapy, and speech-language pathology and removed 170 diagnosis codes
from assignment to diagnosis groups in the HH PPS Grouper.

Table 2--Maximum Adjustments to the National Per-Visit Payment Rates
(Not To Exceed 3.5 Percent of the Amount(s) in CY 2010)
------------------------------------------------------------------------
Maximum
2010 adjustments
National per year
per-visit (CY 2014
payment through CY
rates 2017)
------------------------------------------------------------------------
Skilled Nursing.............................. $113.01 $3.96
Home Health Aide............................. 51.18 1.79
Physical Therapy............................. 123.57 4.32
Occupational Therapy......................... 124.40 4.35
Speech-Language Pathology.................... 134.27 4.70
Medical Social Services...................... 181.16 6.34
------------------------------------------------------------------------

III. Provisions of the Proposed Rule and Responses to Comments

We received approximately 337 timely responses from the public,
many of which contained multiple comments on the CY 2015 HH PPS
proposed rule (79 FR 38366). Many of the comments were identical, but
submitted by multiple commenters. We received comments from various
trade associations, HHAs, individual registered nurses, physicians,
clinicians, therapists, therapy assistants, health care industry
organizations, and health care consulting firms. The following
sections, arranged by subject area, include a summary of the public
comments received, and our responses.

A. Monitoring for Potential Impacts--Affordable Care Act Rebasing
Adjustments and the Face-to-Face Encounter Requirement

1. Affordable Care Act Rebasing Adjustments
As we stated in the CY 2015 HH PPS proposed rule (79 FR 38370), we
do not have a sufficient amount of CY 2014 home health claims data to
analyze as part of our effort in monitoring the potential impacts of
the rebasing adjustments finalized in the CY 2014 HH PPS final rule (78
FR 72293). However, we analyzed 2012 home health agency cost report
data to determine whether the average cost per episode was higher using
2012 cost report data compared to the 2011 cost report data used in
calculating the rebasing adjustments. Specifically, we re-estimated the
cost of a 60-day episode using 2012 cost report and 2012 claims data,
rather than using 2011 cost report and 2012 claims data. To determine
the 2012 average cost per visit per discipline, we applied the same
trimming methodology outlined in the CY 2014 HH PPS proposed rule (78
FR 40284) and weighted the costs per visit from the 2012 cost reports
by size, facility type, and urban/rural location so the costs per visit
were nationally representative. The 2012 average number of visits was
taken from 2012 claims data. We estimate the cost of a 60-day episode
to be $2,413.82 using 2012 cost report data (Table 3).

Table 3--Average Costs per Visit and Average Number of Visits for a 60-Day Episode
----------------------------------------------------------------------------------------------------------------
2012 Average 2012 Average
Discipline costs per number of 2012 60-day
visit visits episode costs
----------------------------------------------------------------------------------------------------------------
Skilled Nursing................................................. $130.49 9.55 $ 1,246.18
Home Health Aide................................................ 61.62 2.60 160.21
Physical Therapy................................................ 160.03 4.80 768.14
Occupational Therapy............................................ 157.78 1.09 171.98
Speech-Language Pathology....................................... 172.08 0.22 37.86
Medical Social Services......................................... 210.36 0.14 29.45
-----------------------------------------------
Total....................................................... .............. .............. 2,413.82
----------------------------------------------------------------------------------------------------------------
Source: FY 2012 Medicare cost report data and 2012 Medicare claims data from the standard analytic file (as of
June 2013) for episodes ending on or before December 31, 2012 for which we could link an OASIS assessment.

Using the current claims data for CY 2013 (as of June 30, 2014), we
re-examined the 2012 visit distribution and re-calculated the 2013
estimated cost per episode using the updated 2013 visit profile. We
estimate the 2013 60-day episode cost to be $2,485.24 (Table 4).

[[Page 66037]]

Table 4--2013 Estimated Cost per Episode
----------------------------------------------------------------------------------------------------------------
2012 Average 2013 Average 2013 Estimated
Discipline costs per number of 2013 HH Market cost per
visit visits basket episode
----------------------------------------------------------------------------------------------------------------
Skilled Nursing................................. $130.49 9.28 1.023 $1,238.80
Home Health Aide................................ 61.62 2.41 1.023 151.92
Physical Therapy................................ 160.03 5.03 1.023 823.46
Occupational Therapy............................ 157.78 1.22 1.023 196.92
Speech-Language Pathology....................... 172.08 0.25 1.023 44.01
Medical Social Services......................... 210.36 0.14 1.023 30.13
---------------------------------------------------------------
Total....................................... .............. .............. .............. 2,485.24
----------------------------------------------------------------------------------------------------------------
Source: FY 2012 Medicare cost report data and 2013 Medicare claims data from the standard analytic file (as of
June 30, 2014) for episodes (excluding low-utilization payment adjusted episodes and partial-episode-payment
adjusted episodes) ending on or before December 31, 2013 for which we could link an OASIS assessment.

In the CY 2014 HH PPS final rule (78 FR 72277), using 2011 cost
report data, we estimated the 2012 60-day episode cost to be about
$2,507.83 ($2,453.71 * 0.9981 * 1.024) and the 2013 60-day episode cost
to be $2,565.51 ($2,453.71 * 0.9981 * 1.024 * 1.023). Using 2012 cost
report data, the 2012 and 2013 estimated cost per episode ($2,413.82
and $2,485.24, respectively) are lower than the episode costs we
estimated using 2011 cost report data for the CY 2014 HH PPS final
rule.\1\
---------------------------------------------------------------------------

\1\ The 2012 estimated cost per episode cited is based on FY
2012 cost report data and CY 2012 claims data (as of June 30, 2013)
and the 2013 estimated cost per episode is based on FY 2012 cost
report data and CY 2013 claims data (as of June 30, 2014).
---------------------------------------------------------------------------

In the CY 2014 HH PPS final rule, we stated that our analysis of
2011 cost report data and 2012 claims data indicated a need for a -3.45
percent rebasing adjustment to the national, standardized 60-day
episode payment rate each year for four years. However, as specified by
statute, the rebasing adjustment is limited to 3.5 percent of the CY
2010 national, standardized 60-day episode payment rate of $2,312.94
(74 FR 58106), or $80.95. We stated that given that a -3.45 percent
adjustment for CY 2014 through CY 2017 will result in larger dollar
amount reductions than the maximum dollar amount allowed under section
3131(a) of the Affordable Care Act of $80.95, we are limited to
implementing a reduction of $80.95 (approximately 2.8 percent for CY
2014) to the national, standardized 60-day episode payment amount each
year for CY 2014 through CY 2017. Our latest analysis of 2012 cost
report and 2013 claims data suggests that an even larger reduction (-
4.21 percent) than the reduction described in the CY 2014 final rule (-
3.45 percent) will be needed in order to align payments to costs. We
stated in the CY 2015 HH PPS proposed rule that we would continue to
monitor potential impacts of rebasing as more data become available (79
FR 38371).
Although we finalized the rebasing adjustments in the CY 2014 HH
PPS final rule and did not propose any changes to those adjustments, we
received a number of comments on the rebasing and on our analysis of
2012 cost report data in the CY 2015 HH PPS proposed rule. Those
comments and our responses are summarized below.
Comment: Commenters urged CMS to postpone or stop the
implementation of the rebasing reductions. Commenters expressed
concerns with the rebasing methodology, impact analysis, and process
outlined in the CY 2014 HH PPS proposed and final rules and stated that
a more comprehensive study is needed to evaluate the rebasing
reductions. Some commenters also stated that the findings on the study
on access to care mandated by section 3131(d) of the Affordable Care
Act were not fully considered prior to the implementation or rebasing
and urged CMS to take into account these findings and reconsider the
rebasing adjustments.
Response: We thank the commenters for their comments. We did not
propose changes to the rebasing adjustments for CY 2014 through CY 2017
finalized in the CY 2014 HH PPS final rule. The comments received
regarding the rebasing adjustments were nearly identical to the
comments submitted during the comment period for the CY 2014 HH PPS
proposed rule. Therefore, we encourage commenters to review our
responses to the comments we received on the rebasing adjustments in
the CY 2014 HH PPS final rule (78 FR 72282-72294).
Comment: Several commenters were concerned with the impact of the
rebasing adjustments and urged CMS to monitor the impact of the
reductions and provided suggestions for the impact and monitoring
analyses.
Response: As we noted in the CY 2015 HH PPS proposed rule,
sufficient claims data for CY 2014 is not available for analysis. We
plan to provide an update on our monitoring efforts once sufficient CY
2014 claims data become available. In their public comments on the CY
2015 HH PPS proposed rule, MedPAC stated that given the 12 percent or
higher margins for for-profit and non-profit agencies in 2012, they do
not expect the reductions to materially affect the operations of most
agencies and recommended to Congress that rebasing be implemented in a
shorter period, that the annual payment update be eliminated, and that
such changes to statute would help bring payments closer to costs than
the current approach to rebasing. MedPAC is required to conduct a study
and submit a report on the impact of the rebasing adjustments on access
to care, quality outcomes, the number of home health agencies, and
rural agencies, urban agencies, for-profit agencies and non-profit
agencies to be submitted no later than January 1, 2015.
Comment: A commenter stated that CMS did not indicate in the CY
2015 HH PPS proposed rule how many 2012 cost reports were audited and
how many were trimmed out (excluded) from the analysis. The commenter
requested that CMS include this information in the final rule for the
sake of transparency.
Response: None of the 2012 cost reports were audited. Of the 10,485
cost reports in the sample, which contained 10,310 unique provider
numbers, 6,135 cost reports were used in the results presented in the
CY 2015 HH PPS proposed rule (79 FR 38370-38371). We used same trimming
and weighting methodology described in the CY 2014 HH PPS proposed rule
(78 FR 40284-40286).
Comment: Commenters expressed concern with the reduction to the NRS
conversion factor. The commenter was concerned that reductions to
payments for NRS may impact patients with wounds and requested that CMS
re-

[[Page 66038]]

evaluate the utilization of and charges associated with surgical
dressings compared to other supplies in the NRS group and suggested CMS
consider a separate conversion factor for surgical dressings. Another
commenter stated that it is difficult to determine whether actual
hospital-based HHA NRS costs had been included into the total cost of
services measured. The commenter stated that there is a flaw in the
hospital-based cost report where the NRS cost data does not flow to the
total cost. The commenter recommended that CMS review the hospital
based cost reports for this problem and fix the NRS adjustment
equitably if that flaw exists.
Response: We researched whether hospital-based HHA costs for NRS
were included in our rebasing calculations in the CY 2014 HH PPS
proposed and final rules. We noted in the CY 2014 HH PPS final rule
that NRS costs for hospital-based HHAs are to be reported on CMS form
2552-10, worksheet H, line 12 (78 FR 72291). This data flows to
worksheet H3, part 1, line 15. However, line 15, columns 6 through 11
are shaded out and not currently populated. We are in the process of
``un-shading'' those columns for future data collection. Of the over
11,000 HHAs included in the Regulatory Impact Analysis in section V.,
less than 10 percent are facility-based HHAs. We believe that using NRS
cost data solely from freestanding HHAs, given the unavailability of
the hospital-based HHA NRS cost data for FY 2011, is appropriate. We
examined cost report data for both freestanding and hospital-based HHAs
(using instances where the hospital-based HHA submitted cost report
data using the older version of the Medicare hospital cost report (CMS
form 2552-96) that allows columns 6 through 11 on line 15 on worksheet
H6 part 1to be populated). We found that the average NRS cost per visit
varies substantially from year-to-year, with the five-year average NRS
cost per visit at $2.27.
Once the hospital-based cost report data becomes available, we will
analyze those costs and take them into consideration as we work to
address any findings from the home health study required by section
3131(d) of the Affordable Care Act, monitor the potential impact of the
rebasing adjustments and other recent payment changes, and develop
payment options to ensure ongoing access to care for vulnerable
populations. The work may include potential revisions to the NRS and
case-mix weights methodology to better reflect costs of treating
Medicare beneficiaries.
Comment: Commenters urged CMS to use the authority granted under
section 1871 of the Social Security Act to modify the rebasing
adjustments finalized in the CY 2014 HH PPS final rule. The commenter
stated that CMS has authority to modify final regulations if CMS finds
that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest. Commenters urged CMS
to modify payment rates in order to secure seniors' access to home
health care, ensure high quality of care, and preserve jobs. Another
commenter stated that section 1895 of the Social Security Act allows
CMS to implement a less aggressive approach to rebasing.
Response: Section 1871(b)(2)(C) of the Act cross-references section
553(b)(3)(B) of the Administrative Procedure Act. Both the Social
Security Act and the Administrative Procedure Act permit us to waive
the requirements of notice and a period for comment if, among other
things, the Secretary determines that notice and comment are
impracticable, unnecessary, or contrary to the public interest.
Normally, we only waive notice and comment when we believe there are
unusual circumstances that would warrant expedited implementation of a
rule, or when the rule changes are technical and/or involve no exercise
of discretion on the part of the Secretary. In the context of this
notice-and-comment rulemaking, it appears that the commenter is
requesting that we adjust our rebasing rates without having previously
announced our intention to do so. We do not believe that circumstances
have changed in a way that would require an immediate change to our
rebasing rate; and even if circumstances changed, we do not believe
that changing the rate without a period for notice and comment would be
in the public interest. We also note that calculation of the rates
pursuant to the rebasing provision at section 1895(b)(3)(A)(iii) of the
Act took place after a period of notice and comment in the CY 2014 HH
PPS rule (see 78 FR 72278 through 72281). Section 1895 of the Act
states that we must phase in any adjustment over a four-year period in
equal increments, not to exceed 3.5 percent of the amount (or amounts)
as of the date of enactment of the Affordable Care Act, and fully
implement the rebasing adjustments by CY 2017. We do not have the
authority to implement rebasing in another manner. Therefore, we will
move forward with the rebasing reductions finalized in the CY 2014 HH
PPS final rule.
2. Affordable Care Act Face-to-Face Encounter Requirement
Effective January 1, 2011, section 6407 the Affordable Care Act
requires that, as a condition for payment, prior to certifying a
patient's eligibility for the Medicare home health benefit, the
physician must document that the physician himself or herself, or an
allowed non-physician practitioner (NPP), as described below, had a
face-to-face encounter with the patient. The regulations at Sec.
424.22(a)(1)(v) currently require that that the face-to-face encounter
be related to the primary reason the patient requires home health
services and occur no more than 90 days prior to the home health start
of care date or within 30 days of the start of the home health care. In
addition, as part of the certification of eligibility, the certifying
physician must document the date of the encounter and include an
explanation (narrative) of why the clinical findings of such encounter
support that the patient is homebound, as defined in subsections
1814(a) and 1835(a) of the Act, and in need of either intermittent
skilled nursing services or therapy services, as defined in Sec.
409.42(c). The face-to-face encounter requirement was enacted, in part,
to discourage physicians certifying patient eligibility for the
Medicare home health benefit from relying solely on information
provided by the HHAs when making eligibility determinations and other
decisions about patient care.
In the CY 2011 HH PPS final rule, in which we implemented the face-
to-face encounter provision of the Affordable Care Act, some commenters
expressed concern that this requirement would diminish access to home
health services (75 FR 70427). We examined home health claims data from
before implementation of the face-to-face encounter requirement (CY
2010), the year of implementation (CY 2011), and the years following
implementation (CY 2012 and CY 2013), to determine whether there were
indications of access issues as a result of this requirement.
Nationally, utilization (as measured by the number of episodes) held
relatively constant over the first year of implementation (comparing CY
2010 and CY 2011) (see Table 5 below). Between CY 2010 and CY 2013,
there was a 1.8 percent decrease in number of episodes, however, there
was a 1.5 percent increase in the number of home health users
(beneficiaries with at least one home health episode). Also, the number
of HHAs providing at least one home health episode increased steadily
from CY 2010 through CY 2013 with an

[[Page 66039]]

aggregate increase of 8.9 percent (see Table 5 below).
Home health users as a percentage of Part A and/or Part B fee-for-
service (FFS) beneficiaries decreased slightly from 9.3 percent in CY
2010 to 9.0 percent in CY 2013. The number of episodes per Part A and/
or Part B FFS beneficiaries decreased slightly between CY 2010 and CY
2013, with 0.19 (or 19 episodes per 100 Medicare Part A and/or Part B
FFS beneficiaries) in CY 2010 and 0.17 (or 17 episodes per 100 Medicare
Part A and/or Part B FFS beneficiaries) in CY 2013. We note these
observed decreases between CY 2010 to CY 2013, for the most part, are
likely the result of an increase in FFS enrollment between CY 2010 and
CY 2013 of 4.6 percent. Newly eligible Medicare beneficiaries are
typically not of the age where home health services are needed and
therefore, without any changes in utilization, we will expect home
health users and the number of episodes per Part A and/or B FFS
beneficiaries to decrease with an increase in the number of newly
enrolled FFS beneficiaries.

Table 5--Home Health Statistics, CY 2010 Through CY 2013
----------------------------------------------------------------------------------------------------------------
2010 2011 2012 2013
----------------------------------------------------------------------------------------------------------------
Number of episodes.............................. 6,833,669 6,821,459 6,727,875 6,708,923
Beneficiaries receiving at least 1 episode (Home 3,431,696 3,449,231 3,446,122 3,484,579
Health Users)..................................
Part A and/or B FFS beneficiaries............... 36,818,078 37,686,526 38,224,640 38,505,609
Episodes per Part A and/or B FFS beneficiaries.. 0.19 0.18 0.18 0.17
Home health users as a percentage of Part A and/ 9.3% 9.2% 9.0% 9.0%
or B FFS beneficiaries.........................
HHAs providing at least 1 episode............... 10,916 11,446 11,746 11,889
----------------------------------------------------------------------------------------------------------------
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)--Accessed on May 14,
2014 and August 19, 2014. Medicare enrollment information obtained from the CCW Master Beneficiary Summary
File. Beneficiaries are the total number of beneficiaries in a given year with at least 1 month of Part A and/
or Part B Fee-for-Service coverage without having any months of Medicare Advantage coverage.
Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from
outlying areas (outside of 50 States and District of Columbia). Only episodes with a through date in the year
specified are included. Episodes with a claim frequency code equal to ``0'' (``Non-payment/zero claims'') and
``2'' (``Interim--first claim'') are excluded. If a beneficiary is treated by providers from multiple states
within a year the beneficiary is counted within each state's unique number of beneficiaries served.

Although home health utilization at the national level decreased
slightly from CY 2010 and CY 2013, the decrease in utilization did not
occur in all states. For example, California, New Jersey and Virginia
experienced an increase in the number of episodes from CY 2010 to CY
2013. Also, the number of episodes per Part A and/or Part B FFS
beneficiaries for these states increased or remained roughly the same
between CY 2010 through CY 2013 (see Table 6).

Table 6--Home Health Statistics for Select States With Increasing Numbers of Home Health Episodes Between CY 2010 and CY 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year AL CA MA NJ VA
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Episodes...................................... 2010 149,242 428,491 183,271 142,328 142,660
2011 151,131 451,749 186,849 143,127 149,154
2012 151,812 477,732 183,625 142,129 154,677
2013 148,972 508,838 186,871 143,674 160,105
Beneficiaries Receiving at Least 1 Episode (Home Health 2010 68,949 259,013 103,954 95,804 83,933
Users).................................................
2011 70,539 270,259 107,520 97,190 86,796
2012 71,186 281,023 106,910 96,534 89,879
2013 71,703 294,150 110,573 97,385 94,393
Part A and/or Part B FFS Beneficiaries.................. 2010 689,302 3,199,845 890,472 1,205,049 1,014,248
2011 717,413 3,294,574 934,312 1,228,239 1,055,516
2012 732,952 3,397,936 959,015 1,232,950 1,086,474
2013 739,868 3,444,078 976,814 1,245,275 1,119,886
Episodes per Part A and/or Part B FFS beneficiaries..... 2010 0.22 0.13 0.21 0.12 0.14
2011 0.21 0.14 0.20 0.12 0.14
2012 0.21 0.14 0.19 0.12 0.14
2013 0.20 0.15 0.19 0.12 0.14
Home Health Users as a Percentage of Part A and/or B FFS 2010 10.00% 8.09% 11.67% 7.95% 8.28%
beneficiaries..........................................
2011 9.83% 8.20% 11.51% 7.91% 8.22%
2012 9.71% 8.27% 11.15% 7.83% 8.27%
2013 9.69% 8.54% 11.32% 7.82% 8.43%
Providers Providing at Least 1 Episode.................. 2010 148 925 138 49 196
2011 150 1,013 150 48 209
2012 148 1,073 160 47 219
2013 150 1,157 165 46 224
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)--Accessed on May 14, 2014 and August 19, 2014. Medicare
enrollment information obtained from the CCW Master Beneficiary Summary File. Beneficiaries are the total number of beneficiaries in a given year with
at least 1 month of Part A and/or Part B Fee-for-Service coverage without having any months of Medicare Advantage coverage.

[[Page 66040]]

Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 States and
District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ``0''
(``Non-payment/zero claims'') and ``2'' (``Interim--first claim'') are excluded. If a beneficiary is treated by providers from multiple states within
a year the beneficiary is counted within each state's unique number of beneficiaries served.

The states with the highest utilization of Medicare home health (as
measured by the number of episodes per Part A and/or Part B FFS
beneficiaries) are Texas, Florida, Oklahoma, Mississippi, and Louisiana
(Table 7 and Figure 1 below). In aggregate, for CY 2010 through CY 2013
the number of episodes for these states decreased by 8.0 percent;
however, even with this decrease from CY 2010 through CY 2013, the five
states listed in Table 7 continue to be among the states with the
highest utilization of Medicare home health nationally (see Figure 1).
If we were to exclude the five states listed in Table 7 from the
national figures in Table 5, home health users (beneficiaries with at
least one home health episode) as a percentage of Part A and/or Part B
fee-for-service (FFS) beneficiaries would decrease from to 9.0 percent
to 8.1 percent for CY 2013 and the number of episodes per Part A and/or
Part B FFS beneficiaries would decrease from 0.17 (or 17 episodes per
100 Medicare Part A and/or Part B FFS beneficiaries) to 0.14 (or 14
episodes per 100 Medicare Part A and/or Part B FFS beneficiaries) for
CY 2013.
Texas, accounting for roughly 17 percent of HHA episodes in 2010,
experienced a 12 percent decrease in the number of episodes and a 9
percent decrease in the number of home health users between CY 2010 and
CY 2013 (see Table 7 below). We also note that Texas is one of the
states that has areas with suspect billing practices. A temporary
moratoria on enrollment of new HHAs, effective July 30, 2013, were put
in place for Miami, FL and Chicago, IL. In January of 2014, CMS
announced new temporary moratoria on enrollment of new HHAs in four
additional areas --Fort Lauderdale, FL; Detroit, MI; Dallas, TX; and
Houston, TX. If we were to exclude Texas from the national average (see
Table 5 above), there would be a 0.13 percent increase in number of
episodes between CY 2010 and CY 2013 rather than a 1.8 percent decrease
as observed at the national level. The number of home health users
would increase 2.8 percent compared to the national average with an
increase of 1.5 percent.

Table 7--Home Health Statistics for the States With the Highest Number of Home Health Episodes per Part A and/or Part B FFS Beneficiaries, CY 2010
Through CY 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Year TX FL OK MS LA
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Episodes...................................... 2010 1,127,852 689,183 208,555 153,169 256,014
2011 1,107,605 701,426 203,112 153,983 249,479
2012 1,054,244 691,255 196,887 148,516 230,115
2013 995,555 689,269 196,713 143,428 215,590
Beneficiaries Receiving at Least 1 Episode (Home Health 2010 366,844 355,181 68,440 55,132 77,976
Users).................................................
2011 363,474 355,900 67,218 55,818 77,677
2012 350,803 354,838 65,948 55,438 74,755
2013 333,396 357,099 66,502 55,453 73,888
Part A and/or Part B FFS Beneficiaries.................. 2010 2,500,237 2,422,141 533,792 465,129 544,555
2011 2,597,406 2,454,124 549,687 476,497 561,531
2012 2,604,458 2,451,790 558,500 480,218 568,483
2013 2,535,611 2,454,216 568,815 483,439 574,654
Episodes per Part A and/or Part B FFS beneficiaries..... 2010 0.45 0.28 0.39 0.33 0.47
2011 0.43 0.29 0.37 0.32 0.44
2012 0.40 0.28 0.35 0.31 0.40
2013 0.39 0.28 0.35 0.30 0.38
Home Health Users as a Percentage of Part A and/or Part 2010 14.67% 14.66% 12.82% 11.85% 14.32%
B FFS Beneficiaries....................................
2011 13.99% 14.50% 12.23% 11.71% 13.83%
2012 13.47% 14.47% 11.81% 11.54% 13.15%
2013 13.15% 14.55% 11.69% 11.47% 12.86%
Providers Providing at Least 1 Episode.................. 2010 2,352 1,348 240 53 213
2011 2,472 1,426 252 51 216
2012 2,549 1,430 254 48 213
2013 2,600 1,357 262 48 210
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)--Accessed on May 14, 2014 and August 19, 2014. Medicare
enrollment information obtained from the CCW Master Beneficiary Summary File. Beneficiaries are the total number of beneficiaries in a given year with
at least 1 month of Part A and/or Part B Fee-for-Service coverage without having any months of Medicare Advantage coverage.
Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 States and
District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ``0''
(``Non-payment/zero claims'') and ``2'' (``Interim--first claim'') are excluded. If a beneficiary is treated by providers from multiple states within
a year the beneficiary is counted within each state's unique number of beneficiaries served.

[[Page 66041]]

[GRAPHIC] [TIFF OMITTED] TR06NO14.000

For CY 2011, in addition to the implementation of the Affordable
Care Act face-to-face encounter requirement, HHAs were also subject to
new therapy reassessment requirements, payments were reduced to account
for increases in nominal case-mix, and the Affordable Care Act mandated
that the HH PPS payment rates be reduced by 5 percent to pay up to, but
no more than 2.5 percent of total HH PPS payments as outlier payments.
The estimated net impact to HHAs for CY 2011 was a decrease in total HH
PPS payments of 4.78 percent. Therefore, any changes in utilization
between CY 2010 and CY 2011 cannot be solely attributable to the
implementation of the face-to-face encounter requirement. For CY 2012
we recalibrated the case-mix weights, including the removal of two
hypertension codes from scoring points in the HH PPS Grouper and
lowering the case-mix weights for high therapy cases estimated net
impact to HHAs, and reduced HH PPS rates in CY 2012 by 3.79 percent to
account for additional growth in aggregate case-mix that was unrelated
to changes in patients' health status. The estimated net impact to HHAs
for CY 2012 was a decrease in total HH PPS payments of 2.31 percent.
Again, any changes in utilization between CY 2011 and CY 2012 cannot be
solely attributable to the implementation of the face-to-face encounter
requirement. Given that a decrease in the number of episodes from CY
2010 to CY 2013 occurred in states that have the highest home health
utilization (number of episodes per Part A and/or Part B FFS
beneficiaries) and not all states experienced declines in episode
volume during that time period, we believe that the implementation of
the face-to-face encounter requirement could be considered a
contributing factor. We will continue to monitor for potential impacts
due to the implementation of the face-to-face encounter requirements
and other policy changes in the future. Independent effects of any one
policy may be difficult to discern in years where multiple policy
changes occur in any given year.

B. Changes to the Face-to-Face Encounter Requirements

1. Background on Statutory and Regulatory Requirements
As a condition for payment, section 6407 of the Affordable Care Act
requires that, prior to certifying a patient's eligibility for the
Medicare home health benefit, the physician must document that the
physician himself or herself or an allowed non-physician practitioner
(NPP) had a face-to-face encounter with the patient. Specifically,
sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, as amended by the
Affordable Care Act, state that, in addition to the certifying
physician, a nurse practitioner or clinical nurse specialist, as those
terms are defined in section 1861(aa)(5) of the Act, working in
collaboration with the physician in accordance with state law, or a
certified nurse-midwife (as defined in section 1861(gg) of the Act) as
authorized by state law, or a physician assistant (as defined in
section 1861(aa)(5) of the Act) under the supervision of the

[[Page 66042]]

physician may perform the face-to-face encounter.
The goal of the Affordable Care Act provision is to achieve greater
physician accountability in certifying a patient's eligibility and in
establishing a patient's plan of care. We believe this goal is better
achieved if the face-to-face encounter occurs close to the start of
home health care, increasing the likelihood that the clinical
conditions exhibited by the patient during the encounter are related to
the primary reason the patient needs home health care. The certifying
physician is responsible for determining whether the patient meets the
eligibility criteria (that is, homebound status and need for skilled
services) and for understanding the current clinical needs of the
patient such that the physician can establish an effective plan of
care. As such, CMS regulations at Sec. 424.22(a)(1)(v) require that
the face-to-face encounter be related to the primary reason the patient
requires home health services and occur no more than 90 days prior to
the home health start of care date or within 30 days of the start of
the home health care. In addition, current regulations require that, as
part of the certification of eligibility, the certifying physician must
document the date of the encounter and include an explanation
(narrative) of why the clinical findings of such encounter support that
the patient is homebound, as defined in sections 1835(a) and 1814(a) of
the Act, and in need of either intermittent skilled nursing services,
physical therapy, or speech-language pathology services, as defined in
Sec. 409.42(c).
The ``Requirements for Home Health Services'' describes certifying
a patient's eligibility for the Medicare home health benefit, and as
stated in the ``Content of the Certification'' under Sec. 424.22
(a)(1), a physician must certify that:
The individual needs or needed intermittent skilled
nursing care, physical therapy, and/or speech-language pathology
services as defined in Sec. 409.42(c).
Home health services are or were required because the
individual was confined to the home (as defined in sections 1835(a) and
1814(a) of the Act), except when receiving outpatient services.
A plan for furnishing the services has been established
and is or will be periodically reviewed by a physician who is a doctor
of medicine, osteopathy, or podiatric medicine (a doctor of podiatric
medicine may perform only plan of treatment functions that are
consistent with the functions he or she is authorized to perform under
state law).\2\
---------------------------------------------------------------------------

\2\ The physician cannot have a financial relationship as
defined in Sec. 411.354 of the chapter, with that HHA, unless the
physician's relationship meets one of the exceptions in section 1877
of the Act, which sets forth general exceptions to the referral
prohibition related to both ownership/investment and compensation;
exceptions to the referral prohibition related to ownership or
investment interests; and exceptions to the referral prohibition
related to compensation arrangements.
---------------------------------------------------------------------------

Home health services will be or were furnished while the
individual is or was under the care of a physician who is a doctor of
medicine, osteopathy, or podiatric medicine.
A face-to-face patient encounter occurred no more than 90
days prior to the home health start of care date or within 30 days of
the start of the home health care and was related to the primary reason
the patient requires home health services. This also includes
documenting the date of the encounter and including an explanation of
why the clinical findings of such encounter support that the patient is
homebound (as defined in sections 1835(a) and 1814(a) of the Act) and
in need of either intermittent skilled nursing services or therapy
services as defined in Sec. 409.42(c). The documentation must be
clearly titled and dated and the documentation must be signed by the
certifying physician.
CMS regulations at Sec. 424.22(a)(1)(i) also require that, for
instances where the physician orders skilled nursing visits for
management and evaluation of the patient's care plan,\3\ the physician
must include a brief narrative that describes the clinical
justification of this need and the narrative must be located
immediately before the physician's signature. If the narrative exists
as an addendum to the certification form, in addition to the
physician's signature on the certification form, the physician must
sign immediately after the narrative in the addendum.
---------------------------------------------------------------------------

\3\ Skilled nursing visits for management and evaluation of the
patient's care plan are reasonable and necessary where underlying
conditions or complications require that only a registered nurse can
ensure that essential unskilled care is achieving its purpose. For
skilled nursing care to be reasonable and necessary for management
and evaluation of the patient's plan of care, the complexity of the
necessary unskilled services that are a necessary part of the
medical treatment must require the involvement of skilled nursing
personnel to promote the patient's recovery and medical safety in
view of the patient's overall condition (reference Sec. 409.33 and
section 40.1.2.2 in Chapter 7 of the Medicare Benefits Policy Manual
(Pub. 100-02)).
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[[Page 66043]]

2. Changes to the Face-to-Face Encounter Narrative Requirement and Non-
Coverage of Associated Physician Certification/Re-Certification Claims
Each year, the CMS' Office of Financial Management (OFM), under the
Comprehensive Error Rate Testing (CERT) program, calculates the
Medicare Fee-for-Service (FFS) improper payment rate. For the FY 2013
report period (reflecting claims processed between July 2011 and June
2012), the national Medicare FFS improper payment rate was calculated
to be 10.1 percent.\4\ For that same report period, the improper
payment rate for home health services was 17.3 percent, representing a
projected improper payment amount of approximately $3 billion.\5\ The
improper payments identified by the CERT program represent instances in
which a health care provider fails to comply with the Medicare coverage
and billing requirements and are not necessarily a result of fraudulent
activity.\6\
---------------------------------------------------------------------------

\4\ U.S. Department of Health and Human Services, ``FY 2013
Agency Financial Report'', accessed on April, 23, 2014 at: https://www.hhs.gov/afr/2013-hhs-agency-financial-report.pdf.
\5\ U.S. Department of Health and Human Services, ``The
Supplementary Appendices for the Medicare Fee-for-Service 2013
Improper Payment Rate Report'', accessed on April, 23, 2014 at:
https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/Downloads/November2013ReportPeriodAppendixFinal12-13-2013_508Compliance_Approved12-27-13.pdf.
\6\ The CERT improper payment rate is not a ``fraud rate,'' but
is a measurement of payments made that did not meet Medicare
requirements. The CERT program cannot label a claim fraudulent.
---------------------------------------------------------------------------

The majority of home health improper payments were due to
``insufficient documentation'' errors. ``Insufficient documentation''
errors occur when the medical documentation submitted is inadequate to
support payment for the services billed or when a specific
documentation element that is required (as described above) is missing.
Most ``insufficient documentation'' errors for home health occurred
when the narrative portion of the face-to-face encounter documentation
did not sufficiently describe how the clinical findings from the
encounter supported the beneficiary's homebound status and need for
skilled services, as required by Sec. 424.22(a)(1)(v).
The home health industry continues to voice concerns regarding the
implementation of the Affordable Care Act face-to-face encounter
documentation requirement. The home health industry cites challenges
that HHAs face in meeting the face-to-face encounter documentation
requirements regarding the required narrative, including a perceived
lack of established standards for compliance that can be adequately
understood and applied by the physicians and HHAs. In addition, the
home health industry conveys frustration with having to rely on the
physician to satisfy the face-to-face encounter documentation
requirements without incentives to encourage physician compliance.
Correspondence received to date has expressed concern over the
``extensive and redundant'' narrative required by regulation for face-
to-face encounter documentation purposes when detailed evidence to
support the physician certification of homebound status and medical
necessity is available in clinical records. In addition, correspondence
stated that the narrative requirement was not explicit in the
Affordable Care Act provision requiring a face-to-face encounter as
part of the certification of eligibility and that a narrative
requirement goes beyond Congressional intent.
While we do not agree that the narrative requirement goes beyond
Congressional intent, we agree that there should be sufficient evidence
in the patient's medical record to demonstrate that the patient meets
the Medicare home health eligibility criteria. Therefore, in an effort
to simplify the face-to-face encounter regulations, reduce burden for
HHAs and physicians, and to mitigate instances where physicians and
HHAs unintentionally fail to comply with certification requirements, we
proposed that:
(1) The narrative requirement in regulation at Sec.
424.22(a)(1)(v) would be eliminated. The certifying physician would
still be required to certify that a face-to-face patient encounter,
which is related to the primary reason the patient requires home health
services, occurred no more than 90 days prior to the home health start
of care date or within 30 days of the start of the home health care and
was performed by a physician or allowed non-physician practitioner as
defined in Sec. 424.22(a)(1)(v)(A), and to document the date of the
encounter as part of the certification of eligibility.
For instances where the physician is ordering skilled nursing
visits for management and evaluation of the patient's care plan, the
physician would still be required to include a brief narrative that
describes the clinical justification of this need as part of the
certification/re-certification of eligibility as outlined in Sec.
424.22(a)(1)(i) and Sec. 424.22(b)(2). This requirement was
implemented in the CY 2010 HH PPS final rule (74 FR 58111) and is not
changing. We note that this requirement predates the Affordable Care
Act, and is a long-established policy of CMS.
(2) In determining whether the patient is or was eligible to
receive services under the Medicare home health benefit at the start of
care, we proposed to review only the medical record for the patient
from the certifying physician or the acute/post-acute care facility (if
the patient in that setting was directly admitted to home health) used
to support the physician's certification of patient eligibility, as
described in paragraphs (a)(1) and (b) of the section. If the patient's
medical record, used by the physician in certifying eligibility, was
not sufficient to demonstrate that the patient was eligible to receive
services under the Medicare home health benefit, payment would not be
rendered for home health services provided.
(3) Physician claims for certification/recertification of
eligibility for home health services (G0180 and G0179, respectively)
would not be covered if the HHA claim itself was non-covered because
the certification/recertification of eligibility was not complete or
because there was insufficient documentation to support that the
patient was eligible for the Medicare home health benefit. However,
rather than specify this in our regulations, this proposal would be
implemented through future sub-regulatory guidance. We believed that
these proposals were responsive to home health industry concerns
regarding the face-to-face encounter requirements articulated above. We
invited comment on these proposals and the associated change in the
regulations text at Sec. 424.22 the CY 2015 HH PPS proposed rule (79
FR 38376).
The following is a summary of the comments we received regarding
(1) the proposed elimination of the face-to-face encounter narrative
requirement as part of the certification of eligibility; and (2) the
proposal to review only the medical record for the patient from the
certifying physician or the acute/post-acute care facility (if the
patient in that setting was directly admitted to home health), used to
support the physician's certification of patient eligibility, in
determining whether the patient is or was eligible to receive services
under the Medicare home health benefit at the start of care.
Comment: A few commenters urged CMS to remove the face-to-face
requirement entirely. Commenters went on to note that since the intent
of the face-to-face encounter is to combat fraud, CMS should be able to
determine which HHAs are providing care by fraudulent means and should
investigate those HHAs.

[[Page 66044]]

Response: As we note above, as a condition for payment, section
6407 of the Affordable Care Act requires that, prior to certifying a
patient's eligibility for the Medicare home health benefit, the
physician must document that the physician himself or herself or an
allowed NPP had a face-to-face encounter with the patient. As such, we
do not have the legal authority to eliminate the face-to-face encounter
requirement. We also note above that the goal of this provision was to
achieve greater physician accountability in certifying a patient's
eligibility, increasing communication between the physician and home
health agency to improve patient care, and in establishing a patient's
plan of care. CMS's Center for Program Integrity (CPI) is currently
engaged in a variety of activities aimed at reducing fraud and abuse.
Such activities include provider/contractor audits, policy reviews, and
the identification and monitoring of program vulnerabilities. CPI is
actively collaborating with the U.S. Department of Justice, the
Department of Health & Human Services' Office of Inspector General,
state law enforcement agencies, other federal entities, and other CMS
component(s) for the purposes of detecting, deterring, monitoring and
combating fraud and abuse, as well as taking action against those that
commit or participate in fraudulent or other unlawful activities.
Comment: Several commenters stated that CMS overstepped its
statutory authority by requiring the face-to-face encounter narrative
as part of the certification of patient eligibility for the home health
benefit.
Response: We disagree with the commenters. We believe that our
policy is consistent with the text, structure, and purpose of the
statute. As a condition for payment, section 6407 of the Affordable
Care Act requires that, prior to certifying a patient's eligibility for
the Medicare home health benefit, the physician must ``document'' that
the physician himself or herself or an allowed NPP had a face-to-face
encounter with the patient. The statutory text does not specify what
the statutory term ``document'' means and we believe it is reasonable
to interpret the requirement to ``document'' the face-to-face encounter
as requiring the certifying physician to explain why the Medicare
beneficiary is homebound and in need of skilled home health services.
This interpretation is supported by the structure and purpose of the
statute. Medicare payment for home health services is intended for
individuals who are confined to the home and need skilled home health
services. The face-to-face requirement and the documentation
requirement help ensure that individuals do not receive home health
services unnecessarily and that Medicare makes payment appropriately
(that is, when the patient is homebound and needs skilled home health
services). Nothing in the text of the statute indicates that the
current required explanation is outside the scope of the Secretary's
legal authority. In addition, this is similar to the long-standing
Medicare policy for skilled nursing visits for management and
evaluation of the patient's care plan (where underlying conditions or
complications require that only a registered nurse can ensure that
essential unskilled care is achieving its purpose), which was
previously accepted by the home health community.
Comment: Nearly all commenters were supportive of the proposal to
eliminate the face-to-face encounter narrative as part of the
certification of eligibility and urged CMS to finalize the proposal.
Commenters cited challenges in getting certifying physicians, whom the
HHA has no control over, to document the narrative sufficiently. Other
commenters noted that policies surrounding the narrative requirement
contained confusing nuances and reviews of narrative sufficiency were
too subjective. Some commenters noted instances where medical necessity
and patient eligibility for the Medicare home health benefit were
clearly demonstrated in the medical record; however, the entire claim
was denied because the certifying physician's narrative was deemed
insufficient.
In contrast, in its comments, MedPAC stated that the narrative
should continue to be a requirement as part of the certification of
eligibility for Medicare home health services. MedPAC stated that
eliminating the narrative increases the risk of unnecessary or
unauthorized home health care services. MedPAC suggested that CMS keep
the current narrative requirement in effect for at least another year
while it considers other potential improvements. Another commenter also
disagreed with the proposed elimination of the face-to-face encounter
narrative as part of the certification of eligibility stating that the
elimination of the narrative may increase confusion about the Medicare
home health eligibility requirements.
Response: We thank the vast majority of the commenters for their
support of this proposal. As explained in the proposed rule, we
proposed to eliminate the narrative requirement in an effort to
simplify the face-to-face encounter regulations, reduce burden for HHAs
and physicians, and to mitigate instances where physicians and HHAs
unintentionally fail to comply with certification requirements. We
believe that the current narrative requirement can be useful for HHAs
and medical review auditors, and is a permissible interpretation of
section 6407 of the Affordable Care Act. However, as the proposed rule
reflects, we acknowledge the concerns expressed by stakeholders
regarding application of the narrative requirement. Balancing the
considerations raised by stakeholders and commenters in light of our
experience, we are finalizing our proposal to eliminate the narrative
requirement. We will continue to evaluate whether further policy
changes are warranted in the future.
Comment: A few commenters asked that CMS affirm that a narrative
for instances where the physician is ordering skilled nursing for
management and evaluation of the patient's care plan (that is,
instances where the patient's underlying conditions or complications
require that only a registered nurse can ensure that essential
unskilled care is achieving its purpose) should be a rare occurrence
and asked how physicians and HHAs should identify cases that would
require a narrative. Some commenters requested that CMS affirm in the
final rule that while CMS proposed to eliminate the face-to-face
encounter narrative, a narrative will still be required for instances
where the physician is ordering skilled nursing visits for the
management and evaluation of the patient's care plan. Several
commenters recommended that CMS eliminate all narrative requirements
for home health for consistency and to promote a better understanding
of the certification/re-certification requirements by physicians.
Response: Instances where a physician is ordering skilled nursing
for the management and evaluation of the patient's care plan (when the
patient's underlying conditions and/or complications require a
registered nurse to ensure that non-skilled care is achieving its
purpose), should be rare and therefore a narrative that explains the
need for such services as part of the certification/re-certification of
patient eligibility for the Medicare home health benefit should also be
rare. Analysis of CY 2012 home health claims data showed that only 1.5
percent of all home health visits were for management & evaluation of
the patient's care plan (see Table 8 below).

[[Page 66045]]

Table 8--Percentage of Home Health Visits by HCPCS Code, CY 2012
------------------------------------------------------------------------
Percent of
Type of visit total
------------------------------------------------------------------------
G0154--Direct skilled services provided by a RN/LPN........ 67.6
G0162--Skilled services by a RN for management and 1.5
evaluation of the plan of care (the patient's underlying
conditions or complications requires an RN to ensure that
essential non-skilled care achieves its purpose)..........
G0163--Skilled services of a RN/LPN for the observation and 10.5
assessment of the patient's condition (the change in the
patient's condition requires skilled nursing personnel to
identify and evaluate the patient's need for possible
modification of treatment)................................
G0164--Skilled services of a RN/LPN, in the training and/or 20.4
education of a patient or family member...................
------------------------------------------------------------------------
Source: CY 2012 Medicare claims data for episodes ending on or before
December 31, 2012 (as of June 30, 2013) for which we had a linked
OASIS assessment.
Note(s): RN = Registered Nurse, LPN = Licensed Practical Nurse.

We note that section 40.1.2.2 in Chapter 7 of the Medicare Benefits
Policy Manual provides information on how to identify whether the
patient is receiving skilled nursing services for management and
evaluation of the patient's care plan. Skilled nursing services in such
instances can be ``reasonable and necessary where underlying conditions
or complications require that only a registered nurse can ensure that
essential unskilled care is achieving its purpose. For skilled nursing
care to be reasonable and necessary for management and evaluation of
the patient's plan of care, the complexity of the necessary unskilled
services that are a necessary part of the medical treatment must
require the involvement of skilled nursing personnel to promote the
patient's recovery and medical safety in view of the patient's overall
condition.'' \7\ Section 40.1.2.2 also provides several examples in
which skilled nursing services for management and evaluation of the
patient's care plan could be considered reasonable and necessary.
---------------------------------------------------------------------------

\7\ Medicare Benefit Policy Manual, (CMS Pub. 100-02), Ch. 7,
sec. 40.1.2.2. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c07.pdf.
---------------------------------------------------------------------------

As indicated above in Table 8, instances where the physician is
ordering skilled nursing visits for management and evaluation of the
patient's care plan should be infrequent. Because the purpose of these
visits require a skilled nurse to ensure that unskilled care is
achieving its purpose, we believe that it is still appropriate for the
physician to include a brief narrative that describes the clinical
justification of this need as part of the certification/re-
certification of eligibility as outlined in Sec. 424.22(a)(1)(i) and
Sec. 424.22(b)(2).
Comment: Several commenters stated that CMS should halt current
medical review activities with regard to the face-to-face encounter
narrative and reopen any past denials that were made based on an
insufficient face-to-face encounter narrative by making the
implementation of the elimination of the face-to-face encounter
narrative retroactive.
Response: The changes finalized in CY 2015 HH PPS final rule will
become effective for episodes that begin on or after January 1, 2015.
Although we are eliminating the narrative requirement prospectively,
the narrative requirement continues to apply to services furnished
during episodes that begin before January 1, 2015.
Comment: One commenter stated that for claims currently undergoing
retrospective review, CMS should find HHAs ``without fault'' under 42
U.S.C. 1395gg and section 1870 of the Act in receiving payments where
the physician has provided the narrative, although perhaps not
sufficient, in addition to meeting all other certification
requirements. In finding the HHAs ``without fault'' CMS would simply be
acknowledging that the nature of the earlier face-to-face guidance
could lead to a provider acting in good faith in submitting a claim
that might not meet the documentation standards. One commenter stated
that CMS should issue clarifying guidance, to be applied to claims
currently being reviewed, that explains what constitutes a compliant or
sufficient narrative.
Response: Providers are required to submit documentation adequate
to justify payment under Medicare. Where we deny a claim due to
insufficient documentation of the face-to-face encounter, we are also
inherently determining that the provider is not without fault because
the provider has not met its burden to submit documentation adequate to
justify payment. The Medicare Financial Management Manual addresses the
``without fault'' clause of section 1395gg of the Act and states that a
provider is not without fault if it fails to provide the documentation
necessary to determine that the billed-for services are covered.\8\ We
believe that we have provided sufficient education and guidance to
providers on the requirements for sufficiently documenting the face-to-
face encounter as part of the certification of eligibility.
---------------------------------------------------------------------------

\8\ Medicare Financial Management Manual, (CMS Pub. 100-06), Ch.
3, sec. 90.1(E). Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/fin106c03.pdf
---------------------------------------------------------------------------

CMS has issued several educational articles and a set of Q&As to
help aide physicians and HHAs in complying with the face-to-face
encounter narrative requirement. The most recent article issued--MLN
Matters[supreg] SE1405: Documentation Requirements for Home Health
Prospective Payment System (HH PPS) Face-to-Face Encounter--explains
what constitutes a sufficient face-to-face encounter narrative and
includes several examples. Other articles and a set of Q&As on the
face-to-face encounter requirement and physician certification of
eligibility can be found on the Home Health Agency (HHA) center Web
page at: https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.html under ``spotlights''.
Comment: Several commenters stated that CMS should educate its
contractors to ensure that there are consistent and standardized audit
practices. Other commenters stated that if CMS reviews the certifying
physician's and/or facility's medical record for the patient, CMS
should adequately prepare physicians to implement this new policy by
educating physicians on the requirements for home health eligibility,
how to sufficiently document patient eligibility, and the Medicare
definition of confined to the home.
Response: We use several methods to ensure consistency in medical
reviews, including contractor oversight and the use of inter-rater
reliability to ensure that all reviewers are interpreting the policy
the same. We offer a range of educational resources through online
manuals and Web site postings for HHAs and physicians who order these
services. When appropriate, we also provide direct guidance and
education to Medicare providers and suppliers. We encourage HHAs to
work with their designated MAC to address any issues that arise in the
claims payment process. We agree with commenters who suggested that we
educate physicians regarding any policy changes finalized in this final
rule and provide general education to physicians on certifying
beneficiaries for Medicare home health services. We will do so via,

[[Page 66046]]

for example, open door forums, email listserv announcements, and
MedLearn articles.
Comment: A few commenters stated that the certifying physician
would not have, nor should be required to have, sufficient
documentation within his/her medical record for the patient to support
his/her certification that the patient is eligible for the Medicare
home health benefit. Several commenters stated that HHAs should not be
liable for documentation errors made by physicians, whom they have
little direct control over and some commenters stated that it is
neither reasonable for the HHA to obtain all the documentation needed
from the certifying physician and/or the acute/post-acute care facility
that may have been used to certify patient eligibility and/or lead to
the referral for home care. A few commenters stated that CMS' proposals
to base reimbursement of one provider on documentation maintained by
another, separate provider is unprecedented. Several commenters stated
that if CMS begins reviewing the certifying physician's records for the
patient, physician's will cease to refer patients to home health out of
fear of patient record audits and frustration with administrative
burden.
Response: In accordance with the statutory language at sections
1814(a)(2) and 1835(a)(2) of the Act, physicians are required to have,
and thus be able to provide, material that appropriately supports their
certification and recertification of Medicare home health
beneficiaries, as provided by regulations. When we proposed to require
a face-to-face encounter narrative, comments, which were summarized and
addressed in the CY 2011 HH PPS final rule (75 FR 70431), communicated
to CMS that ``the HHA has no control over the quality of the
physician's documentation and no method to enforce proper physician
documentation''. We stated in our response that:

``it is important to reiterate that to be eligible for
Medicare's [home health] benefit, the patient must be under the care
of a physician, and it is ultimately the responsibility of the HHA
that this criterion is met. We have always held the HHA responsible
for ensuring that there is a physician-signed plan of care,
physician-signed orders, and a physician-signed certification.
Therefore, we will also hold the agencies responsible for the
certifying physician's encounter documentation. By statute, this
documentation is a requirement for payment just as a physician-
signed certification of eligibility is a requirement for payment''
(75 FR 70430).

We also stated in the CY 2011 HH PPS final rule that: ``we would
expect that a physician who performs a medically necessary physician
service, which also satisfies the face-to-face encounter requirement,
would maintain medical record documentation concerning the encounter,
and the clinical findings associated with that encounter would be
consistent with the physician's certification documentation'' (75 FR
70431). While we stated that the HHA was ``held harmless'' if the
certification of eligibility, including the face-to-face encounter
narrative, was sufficient, we noted that the certifying physician was
still expected to fulfill his or her responsibility for ensuring
appropriate medical record documentation associated with the
certification and/or encounter and any associated Medicare billing (75
FR 70431). Since we proposed to eliminate the face-to-face encounter
narrative, with respect to which commenters were overwhelmingly
supportive, the only other source that would substantiate the
certification of eligibility is the certifying physician's and/or the
acute/post-acute care facility's medical record for the patient.
We do not agree that requiring documentation from the certifying
physician's and/or acute/post-acute care facility's medical record for
the patient to substantiate the certification of eligibility is
unprecedented. For any Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS) item to be covered by Medicare:

``the patient's medical record must contain sufficient
documentation of the patient's medical condition to substantiate the
necessity for the type and quantity of items ordered and for the
frequency of use or replacement (if applicable). . . . However,
neither a physician's order nor a certificate of medical necessity
(CMN) nor a DME information form (DIF) nor a supplier prepared
statement nor a physician attestation by itself provides sufficient
documentation of medical necessity, even though it is signed by the
treating physician or supplier. There must be information in the
patient's medical record that supports the medical necessity for the
item and substantiates the answers on the CMN (if applicable) or DIF
(if applicable) or information on a supplier prepared statement or
physician attestation (if applicable).'' \9\
---------------------------------------------------------------------------

\9\ Medicare Program Integrity Manual (CMS Pub. 100-08) Ch.5,
sec. 5.7. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/pim83c05.pdf.

The analysis in section III.A in this final rule shows that since
the implementation of the face-to-face encounter requirement there has
been little change in home health utilization. As such, we would not
expect the elimination of the narrative and the review of documentation
from the certifying physician's and/or post-acute/acute care facility's
medical record for the patient to have a substantial impact on
utilization for those beneficiaries who are truly eligible to receive
services under the Medicare home health benefit. We will continue to
monitor for potential impacts due to the face-to-face encounter
requirements and other policy changes in the future.
Comment: Commenters were generally opposed to using only the
certifying physician's and/or acute/post-acute care facility's medical
record for the patient to determine initial patient eligibility for the
home health benefit. Commenters generally went on to state that all
medical necessity and eligibility determinations should be based on
whether the full patient record, regardless of who holds it,
establishes that the patient is homebound and in need of skilled care.
Other commenters suggested that CMS adopt a policy that allows the
certifying physician documentation that supports the certification of
eligibility for home health services to be maintained in the medical
record of the HHA or allow information from the HHA to be incorporated
into the certifying physician's medical record for the patient. One
commenter noted that when MAC and RAC reviews are conducted, it can be
years after the service was actually provided and it could be difficult
to obtain information from the facility/certifying physician years
later as the medical record for the patient may have been moved off-
site for storage.
Response: In accordance with the statutory language at sections
1814(a)(2) and 1835(a)(2) of the Act, a physician is required to
certify and re-certify the patient's eligibility for the home health
benefit. This is also a condition for Medicare payment per the
regulations at Sec. 424.22. Without a valid certification/re-
certification of eligibility, there can be no payment made to the HHA.
Section 1833(e) of the Act further states that: ``No payment shall be
made to any provider of services or other person under this part unless
there has been furnished such information as may be necessary in order
to determine the amounts due such provider or other person under this
part for the period with respect to which the amounts are being paid or
for any prior period.'' Similarly, section 1815(a) of the Act states
that: ``. . . no such payments shall be made to any provider unless it
has furnished such information as the Secretary may request in order to
determine the amounts due such provider under this part for the period

[[Page 66047]]

with respect to which the amounts are being paid or any prior period.''
Since the certification/re-certification of eligibility is a
requirement for payment and a physician, independent from the HHA as
outlined in Sec. 424.22(d), must complete the certification/ re-
certification of eligibility, only the certifying physician's and/or
the acute/post-acute care facility's medical record for the patient
that was used as the basis for the certification of eligibility can
demonstrate whether the certification/re-certification of eligibility
is valid.
We agree with the suggestions made by the commenters that the
certifying physician and/or acute/post-acute care facility should
provide the documentation that substantiates the patient's eligibility
to the HHA upon request. The HHA must provide the documentation from
the certifying physician and/or acute/post-acute care facility that
substantiates the patient's eligibility for the Medicare home health
benefit to CMS and/or its contractors upon request. We also agree with
commenters that it would be permissible for the HHA to communicate with
and provide information to the certifying physician about the patient's
homebound status and need for skilled care and for the certifying
physician to incorporate this information into his or her medical
record for the patient. However, the certifying physician must review
and sign off on anything incorporated into his or her medical record
for the patient that is used to support his/her certification/re-
certification of patient eligibility for the home health benefit. In
addition, any information from the HHA (including the comprehensive
assessment) that is incorporated into the certifying physician's and/or
the acute/post-acute care facility's medical record for the patient (if
the patient was directly admitted to home health) and used to support
the certification of patient eligibility for the home health benefit,
must corroborate the certifying physician's and/or the acute/post-acute
care facility's own documentation/medical record entries, including the
diagnoses and the patient's condition reported on the comprehensive
assessment.
Comment: Commenters questioned how the process of reviewing the
certifying physician and/or acute/post-acute care facility medical
record for the patient would be operationalized. Specifically,
commenters asked if medical review auditors would contact the
certifying physician and/or acute/post-acute care facility directly to
obtain records for review and if HHAs would be penalized if certifying
physician and/or acute/post-acute care facility patient records are not
readily available for review. Some commenters questioned whether
medical record reviews would happen upon request, such as a MAC or RAC
additional documentation request, or if the HHA would be responsible
for obtaining the supporting documentation from the certifying
physician and/or acute/post-acute care facility and, if so, whether the
documentation should be obtained upon referral. A few commenters stated
that if HHAs are responsible for securing supporting documentation, it
could lead to delays in accepting patients, which in turn could lead to
issues in complying with other regulations, such as the timeframe
required for completing the initial assessment.
Response: After reviewing all of the public comments received, we
believe that the best process is for the certifying physician and/or
the acute/post-acute care facility (if the patient in that setting was
directly admitted to home health) to provide the documentation used as
the basis for the certification of home health eligibility, upon
request, to the home health agency, review entities, and/or CMS. The
HHA will obtain the documentation from the certifying physician and/or
acute/post-acute care facility that substantiates the certification of
patient eligibility for its own medical record for the patient and must
be able to provide it to CMS and its review entities upon request. If
the documentation used as the basis for the certification of
eligibility is not sufficient to demonstrate that the patient is or was
eligible to receive services under the Medicare home health benefit,
payment will not be rendered for home health services provided.
Obtaining documentation from the certifying physician and/or acute/
post-acute care facility should not lead to delays in accepting
patients. We require certifications to be obtained at the time the plan
of care is established or as soon thereafter as possible.\10\ This
allows flexibility for HHAs to develop the plan of care in consultation
with the physician, if needed.
---------------------------------------------------------------------------

\10\ Medicare General Information, Entitlement, and Eligibility
Manual (CMS Pub. 100-01) Ch. 4, sec. 30.1. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/ge101c04.pdf.
---------------------------------------------------------------------------

The plan of care requirements in the Medicare Conditions of
Participation (CoPs) at Sec. 484.18(a) states that the plan of care
developed in consultation with the agency staff covers all pertinent
diagnoses, including mental status, types of services and equipment
required, frequency of visits, prognosis, rehabilitation potential,
functional limitations, activities permitted, nutritional requirements,
medications and treatments, any safety measures to protect against
injury, instructions for timely discharge or referral, and any other
appropriate items. If a physician refers a patient under a plan of care
that cannot be completed until after an evaluation visit, the physician
is consulted to approve additions or modifications to the original
plan. Orders for therapy services include the specific procedures and
modalities to be used and the amount, frequency, and duration. The
therapist and other agency personnel participate in developing the plan
of care.
The Medicare CoPs, at Sec. 484.55(a), require the completion of an
initial assessment within 48 hours of referral, or within 48 hours of
the patient's return home, or on the physician-ordered start of care
date. The initial assessment visit must be done to determine the
immediate care and support needs of the patient and to determine
eligibility for the Medicare home health benefit, including homebound
status. The Medicare CoPs, at Sec. 484.55(b), require a comprehensive
assessment to be completed in a timely manner, consistent with the
patient's immediate needs, but no later than 5 calendar days after the
start of care, and for eligibility for the Medicare home health benefit
to be determined, including homebound status. We would expect that the
findings from initial assessment and/or comprehensive assessment of the
patient would be communicated to the certifying physician. The
certifying physician can incorporate this information into his/her
medical record for the patient and use it to develop the plan of care
and to support his/her certification of patient eligibility. The
certifying physician must review and sign off on anything incorporated
it into his or her medical record for the patient that is used to
substantiate the certification/ re-certification of patient eligibility
for the home health benefit.
Also, per the regulations at Sec. 424.22(a)(1)(v), the face-to-
face encounter itself, can occur up to 30 days after the start of care.
As such, there may be instances where the certification of patient
eligibility and associated supporting documentation may not be
available until after the patient has been accepted by the HHA and
services have commenced. As noted above, the certification must be
obtained at the time the plan of care is established or as soon
thereafter as possible. Therefore, it is not acceptable for HHAs to
wait until the end of the 60-day episode of care to obtain a completed
certification of

[[Page 66048]]

patient eligibility and supporting documentation from the certifying
physician and/or the acute/post-acute care facility (if the patient was
directly admitted to home health).
Comment: Commenters stated that most of the issues with the face-
to-face encounter narrative stemmed from a misunderstanding by
providers and physicians on what is considered a sufficient narrative.
Therefore, if the certifying physician's and/or acute/post-acute care
facility's medical record for the patient is reviewed to determine
initial patient eligibility for the home health benefit, then CMS
should define what it would consider sufficient documentation to
substantiate the certification of eligibility. Some commenters stated
that it is impossible for the HHA to ensure that the documentation in
the certifying physician and/or acute/post-acute care facility medical
record for the patient is sufficiently detailed to support the
certification of patient eligibility. A few commenters stated that some
physicians are reluctant or resistant to providing additional
documentation or changing previous practices in order to comply with
new requirements.
Response: HHAs should obtain as much documentation from the
certifying physician's medical records and/or the acute/post-acute care
facility's medical records (if the patient was directly admitted to
home health) as they deem necessary to assure themselves that the
Medicare home health patient eligibility criteria have been met. As
previously noted, we have issued several educational articles and a set
of Q&As to help aide physicians and HHAs in complying with the face-to-
face encounter narrative requirement and similarly could be used as a
guide on what would be considered adequate documentation in the
certifying physician's and/or acute/post-acute care facility's medical
record for the patient to substantiate eligibility for the Medicare
home health benefit. The most recent article issued--MLN
Matters[supreg] SE1405: Documentation Requirements for Home Health
Prospective Payment System (HH PPS) Face-to-Face Encounter--explains
what constitutes a sufficient face-to-face encounter narrative and
includes several examples. Other articles, including SE1405, and a set
of Q&As on the face-to-face encounter requirement and physician
certification of eligibility can be found on the Home Health Agency
(HHA) center Web page at: https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.html under ``spotlights''.
The Medicare Financial Management Manual requires providers to
provide the documentation necessary to determine that the billed-for
services are covered.\11\ Home health services cannot be covered
without a valid patient certification/re-certification of eligibility,
in accordance with our regulations at Sec. 424.22. The certifying
physician and/or the acute/post-acute care facility medical record for
the patient must contain information that justifies the referral for
Medicare home health services, including the need for the skilled
services initially ordered and the patient's homebound status. This
information can be found most often in clinical and progress notes and
discharge summaries. In addition, the certifying physician's and/or
acute/post-acute care facility's medical record for the patient must
contain the actual clinical note for the face-to-face encounter visit
that demonstrates that the visit occurred within the required
timeframe, was related to the primary reason the patient requires home
health services, and was performed by either: (1) The certifying
physician; (2) a physician, with privileges, who cared for the patient
in an acute or post-acute care facility from which the patient was
directly admitted to home health; or (3) an allowed NPP as set out in
Sec. 424.22(a)(1)(v)(A).
---------------------------------------------------------------------------

\11\ Medicare Financial Management Manual, (CMS Pub. 100-06),
Ch. 3, sec. 90.1(E). Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/fin106c03.pdf
---------------------------------------------------------------------------

It is permissible for the HHA to communicate with and provide
information to the certifying physician about the patient's homebound
status and need for skilled care and for the certifying physician to
incorporate this information into his or her medical record for the
patient. The certifying physician must review and sign off on anything
incorporated it into his or her medical record for the patient that is
used to support his/her certification/re-certification of patient
eligibility for the home health benefit. In addition, any information
from the HHA (including the comprehensive assessment) that is
incorporated into the certifying physician's and/or the acute/post-
acute care facility's medical record for the patient (if the patient
was directly admitted to home health) and used to support the
certification of patient eligibility for the home health benefit, must
corroborate the certifying physician's and/or the acute/post-acute care
facility's own documentation/medical record entries, including the
diagnoses and the patient's condition reported on the comprehensive
assessment. With respect to DMEPOS, it has been our longstanding policy
that records from suppliers or healthcare professionals with a
financial interest in the claim outcome are not considered sufficient
by themselves for the purpose of determining that a DMEPOS item is
reasonable and necessary. We believe the same safeguards are necessary
for home health patient eligibility determinations and consistent with
the statutory intent in sections 1814(a), 1835(a) and 1877 of the Act,
which require a physician, who does not have financial relationship
with the HHA, to certify the patient's eligibility for home health
services.
We want to remind certifying physicians and acute/post-acute care
facilities of their responsibility to provide the medical record
documentation that supports the certification of patient eligibility
for the Medicare home health benefit. Certifying physicians who show
patterns of non-compliance with this requirement, including those
physicians whose records are inadequate or incomplete for this purpose,
may be subject to increased reviews, such as through provider-specific
probe reviews.
Comment: A few commenters questioned whether a certification
statement will still be required, if the certification statement can be
added to the plan of care, and what exactly constitutes a sufficient
certification of eligibility. One commenter recommended that CMS
consider a signed and dated order for home health services for an
eligible patient by an eligible practitioner as satisfying the
certification requirements.
Response: As a reminder, the statute at sections 1814(a)(2)(C) and
1835(a)(2)(A) outlines the certification and re-certification
requirements for Medicare home health services. These requirements are
also reflected in regulations at Sec. 424.22(a) and (b). A physician
will still be required to certify patient eligibility for the Medicare
home health benefit. Specifically for a certification of eligibility to
be sufficient, a physician must certify that:
The individual needs or needed intermittent skilled
nursing care, physical therapy, and/or speech-language pathology
services as defined in Sec. 409.42(c).
Home health services are or were required because the
individual was confined to the home (as defined in sections 1835(a) and
1814(a) of the Act), except when receiving outpatient services.
A plan for furnishing the services has been established
and is or will be

[[Page 66049]]

periodically reviewed by a physician who is a doctor of medicine,
osteopathy, or podiatric medicine (a doctor of podiatric medicine may
perform only plan of treatment functions that are consistent with the
functions he or she is authorized to perform under state law).\12\
---------------------------------------------------------------------------

\12\ The physician cannot have a financial relationship as
defined in Sec. 411.354 of the chapter, with that HHA, unless the
physician's relationship meets one of the exceptions in section 1877
of the Act, which sets forth general exceptions to the referral
prohibition related to both ownership/investment and compensation.
---------------------------------------------------------------------------

Home health services will be or were furnished while the
individual is or was under the care of a physician who is a doctor of
medicine, osteopathy, or podiatric medicine.
A face-to-face patient encounter occurred no more than 90
days prior to the home health start of care date or within 30 days of
the start of the home health care, was related to the primary reason
the patient requires home health services, and was performed by the
certifying physician, a physician, with privileges, who cared for the
patient in an acute or post-acute care facility from which the patient
was directly admitted to home health, or an allowed NPP defined in
Sec. 424.22(a)(1)(v). The certifying physician must also document the
date of the encounter as part of the certification.
For instances where the physician orders skilled nursing visits for
management and evaluation of the patient's care plan,\13\ the
certifying physician must include a brief narrative that describes the
clinical justification of this need and the narrative must be located
immediately before the physician's signature. If the narrative exists
as an addendum to the certification form, in addition to the
physician's signature on the certification form, the physician must
sign immediately after the narrative in the addendum.
---------------------------------------------------------------------------

\13\ Skilled nursing visits for management and evaluation of the
patient's care plan are reasonable and necessary where underlying
conditions or complications require that only a registered nurse can
ensure that essential unskilled care is achieving its purpose. For
skilled nursing care to be reasonable and necessary for management
and evaluation of the patient's plan of care, the complexity of the
necessary unskilled services that are a necessary part of the
medical treatment must require the involvement of skilled nursing
personnel to promote the patient's recovery and medical safety in
view of the patient's overall condition (reference Sec. 409.33 and
section 40.1.2.2 in Chapter 7 of the Medicare Benefits Policy Manual
(Pub. 100-02)).
---------------------------------------------------------------------------

When there is a continuous need for home health care after an
initial 60-day episode of care, a physician is also required to
recertify the patient's eligibility for the home health benefit. In
accordance with Sec. 424.22(b), a recertification is required at least
every 60 days, preferably at the time the plan is reviewed, and must be
signed and dated by the physician who reviews the plan of care. In
recertifying the patient's eligibility for the home health benefit, the
recertification must indicate the continuing need for skilled services
and estimate how much longer the skilled services will be required. The
need for occupational therapy may be the basis for continuing services
that were initiated because the individual needed skilled nursing care,
physical therapy, or speech-language pathology services. Again, for
instances where the physician ordering skilled nursing visits for
management and evaluation of the patient's care plan, the physician
must include a brief narrative that describes the clinical
justification of this need and the narrative must be located
immediately before the physician's signature. If the narrative exists
as an addendum to the recertification form, in addition to the
physician's signature on the recertification form, the physician must
sign immediately after the narrative in the addendum.
Comment: One commenter strongly believed that allowing a face-to-
face encounter to occur up to 90 days prior to the start of home health
care was not appropriate, stating that if a physician saw the patient
90 days ago and did not order home health care at that time, then it is
unclear why is home health being ordered at a later date. Several
commenters recommended that CMS eliminate the face-to-face encounter
requirement altogether for instances where the patient was admitted
directly from an acute/post-acute care facility since the patient would
have seen a physician.
Response: We did not propose to alter the timeframes during which a
face-to-face encounter can occur nor did we propose to eliminate the
face-to-face requirement for instances where the patient was admitted
directly from an acute/post-acute care facility. We refer the
commenters to the CY 2011 HH PPS final rule (75 FR 70428-70429), where
we outlined our rationale on why the face-to-face encounter timeframe
of up to 90 days prior and no more than 30 days after the start of home
health care was finalized. We believe that sections 1814(a)(2)(C) and
1835(a)(2)(A) of the Act do not provide the Secretary with the
authority to eliminate the face-to-face encounter requirement
altogether for instances where the patient was admitted directly from
an acute/post-acute care facility. However, since we are finalizing the
elimination of the face-to-face narrative requirement as part of the
certification of eligibility for home health services, and, as
commenters' noted, an encounter with a physician would have certainly
occurred when a patient is admitted directly from an acute/post-acute
care facility, documenting the date of the face-to-face encounter
should not be burdensome. Although a home health patient would have
seen a physician if they were admitted directly from an acute/post-
acute care facility, the certification of eligibility still requires
that the encounter be related to the primary reason for home health
care. Therefore, we believe that documentation of a face-to-face
encounter as part of the certification of eligibility should still be
required for patients admitted into home health care directly from an
acute/post-acute care facility.
Comment: Several commenters, including MedPAC, asked that CMS
develop a standardized form for use in certifying patient eligibility
for the home health benefit and/or making referrals to home health.
MedPAC noted that CMS concurred with three recommendations in a recent
audit by the Office of Inspector General (OIG), including the
consideration of a standardized form for the face-to-face encounter
narrative to simplify compliance. Other commenters asked that CMS
consider requiring the use of CMS-485 form again.
Response: We do not believe that a standard certification/
recertification of eligibility form is necessary given the elimination
of the face-to-face narrative. The regulations at 42 CFR 424.22 clearly
articulate what elements need to be contained in a certification/re-
certification form created by an HHA. We are pursuing development of an
electronic clinical template that would allow electronic health records
vendors, in all 50 states, to assist physicians in thoroughly
documenting patient eligibility for the Medicare home health benefit.
In order to facilitate adoption of suggested clinical elements by the
provider community, we are currently collaborating with the Office of
the National Coordinator for Health IT (ONC) and the electronic
Determination of Coverage (eDoC) workgroup in developing the
interoperability standards necessary for an electronic clinical
template. We do not believe that we should require the use of the old
CMS-485 form. The CMS-485 form was discontinued over a decade ago to
provide HHAs with more plan of care flexibility. We encourage HHAs and
physicians to work together in developing formats for the home health
plan of care that best meets their needs.

[[Page 66050]]

Comment: We received several comments advocating for us to allow
other types of clinicians to certify eligibility and order home health
services, such as physician assistants, nurse practitioners, and
advanced-practice registered nurses.
Response: These comments are outside the scope of this rule. We
remind the commenters that the statute (sections 1814(a) and 1835(b) of
the Act) require a physician to certify patient eligibility for the
Medicare home health benefit. We do not have the authority to allow for
someone other than a Doctor of Medicine, Osteopathy or Podiatry to
certify patient eligibility for the Medicare home health benefit. A
change to the statute would require an act of the Congress.
Comment: Some commenters recommended statutory changes.
Response: We remind commenters that only the Congress (not CMS) has
the authority to make statutory changes.
Final Decision: We are finalizing our proposal to eliminate the
face-to-face encounter narrative as part of the certification of
patient eligibility for the Medicare home health benefit, effective for
episodes beginning on or after January 1, 2015. The certifying
physician will still be required to certify that a face-to-face patient
encounter, which is related to the primary reason the patient requires
home health services, occurred no more than 90 days prior to the home
health start of care date or within 30 days of the start of the home
health care and was performed by a physician or allowed non-physician
practitioner as defined in Sec. 424.22(a)(1)(v)(A), and to document
the date of the encounter as part of the certification of eligibility.
For instances where the physician is ordering skilled nursing visits
for management and evaluation of the patient's care plan, the physician
will still be required to include a brief narrative that describes the
clinical justification of this need as part of the certification/re-
certification of eligibility as outlined in Sec. 424.22(a)(1)(i) and
Sec. 424.22(b)(2).
In determining whether the patient is or was eligible to receive
services under the Medicare home health benefit at the start of care,
we will require documentation in the certifying physician's medical
records and/or the acute/post-acute care facility's medical records (if
the patient was directly admitted to home health) to be used as the
basis for certification of home health eligibility. We will require the
documentation to be provided upon request to the home health agency,
review entities, and/or CMS. Criteria for patient eligibility are
described at Sec. 424.22(a)(1) and Sec. 424.22(b). HHAs should obtain
as much documentation from the certifying physician's medical records
and/or the acute/post-acute care facility's medical records (if the
patient was directly admitted to home health) as they deem necessary to
assure themselves that the Medicare home health patient eligibility
criteria have been met and must be able to provide it to CMS and its
review entities upon request. If the documentation used as the basis
for the certification of eligibility is not sufficient to demonstrate
that the patient is or was eligible to receive services under the
Medicare home health benefit, payment will not be rendered for home
health services provided.
Again, we want to remind certifying physicians and acute/post-acute
care facilities of their responsibility to provide the medical record
documentation that supports the certification of patient eligibility
for the Medicare home health benefit. Certifying physicians who show
patterns of non-compliance with this requirement, including those
physicians whose records are inadequate or incomplete for this purpose,
may be subject to increased reviews, such as through provider-specific
probe reviews.
The following is a summary of the comments we received regarding
the proposal to non-cover physician claims for certification/re-
certification of patient eligibility for Medicare home health services
when the HHA claim itself was non-covered because the certification/
recertification of eligibility was not complete or because there was
insufficient documentation to support that the patient was eligible for
the Medicare home health benefit.
Comments: A few commenters appreciated the proposal to non-cover
physician claims for certification/re-certification of patient
eligibility for Medicare-covered home health services when the HHA
claim itself was non-covered because the certification/recertification
of eligibility was not complete or because there was insufficient
documentation to support that the patient was eligible for the Medicare
home health benefit. Commenters who supported this proposal thanked CMS
for linking physician billing to HHA billing as a first step in
encouraging more physician accountability.
Response: We thank the commenters for their support. We agree that
this is an important first step in reminding physicians that
coordination and collaboration between the physician and the HHA is
essential in providing quality patient care. Coordination and
collaboration should include sharing pertinent patient information with
one another, especially with regard to the patient's skilled needs and
homebound status. Both entities--the physician who is ultimately
responsible for the patient while he/she is receiving home health
services and the HHA providing such services--should be held
accountable and compensated for their services when appropriate.
Comment: Most commenters generally disagreed with the proposal to
non-cover physician claims for certification/re-certification of
patient eligibility for Medicare home health services when the HHA
claim itself was non-covered because the certification/recertification
of eligibility was not complete or because there was insufficient
documentation to support that the patient was eligible for the Medicare
home health benefit. One commenter questioned how CMS will identify
``Part B claims for certification/re-certification'' and stated that
the face-to-face encounter visit could occur during one of several
Evaluation & Management (E&M) visits. Several commenters stated that
while they support encouraging physicians to engage in the planning and
oversight of home health services, they are concerned that some
physicians, with limited understanding of the regulations, may be
reluctant to refer to home health because of concerns about denials of
reimbursement. Other commenters stated that physician claims for
certification/recertification should not be denied because physicians
are ``in good faith'' certifying the patient's eligibility for the home
health benefit and billing for certification/recertification also
includes activities performed to ensure the initial implementation of
the plan of care. A few commenters suggested that, at a minimum,
finalizing this proposal should be delayed until it can be proposed as
part of the annual changes to the physician fee schedule.
Response: Physician certification or re-certification claims are
Part B physician claims paid for under the Physician Fee Schedule.
These claims are claims billed using HCPCS code G0180 (certification)
or G0179 (re-certification). These claims are not Evaluation and
Management claims and are billed when the patient is not present. The
descriptions of these two codes indicate that they are used to bill for
certification or re-certification of patient eligibility ``for
Medicare-covered home health services under a home health plan of care
(patient not present), including contacts with home health

[[Page 66051]]

agency and review of reports of patient status required by physicians
to affirm the initial implementation of the plan of care that meets
patient's needs, per certification period.'' As underlined above, we
note that these codes are for physician certification or re-
certification for Medicare-covered home health services. If there are
no Medicare-covered home health services, these codes should not be
billed or paid. As such, if the HHA claim is denied, the corresponding
physician claim should not be covered because there is no longer a
corresponding claim for Medicare-covered home health services.
Physicians still have the option of billing Part B for E&M visits
provided, transition care management, and other services as long as
they follow the required billing instructions. We believe that
including this proposal in the CY 2015 HH PPS proposal rule is
sufficient and there is no need to re-propose this policy in next
year's Physician Fee Schedule proposed rule. We received over 300
comments on the CY 2015 HH PPS proposed rule, many of which were from
physician associations, such as the American College of Physicians,
American Academy of Home Care Medicine, American Medical Association,
and the Society of Hospital Medicine, among others.
Comment: Commenters stated that non-coverage of physician claims
for certification/re-certification when the HHA claim itself was non-
covered would most likely not result in a change in physician
practices/behaviors due to the small payment amounts for such claims.
HHAs will still encounter issues with obtaining the necessary
certification/re-recertification and supporting documentation form the
certifying physician.
Response: While the non-coverage of physician claims for
certification/re-certification of patient eligibility for Medicare-
covered home health services following the denial of a HHA claim may
not serve as a sufficient incentive for encouraging certifying
physicians to work collaboratively with HHAs and to provide the
necessary documentation to substantiate the certification of
eligibility, certifying physicians who show patterns of non-compliance
with providing sufficient documentation, including those physicians
whose records are inadequate or incomplete for this purpose, may be
subject to increased reviews, such as through provider-specific probe
reviews. Claims subject to increased review may include services
unrelated to the home health claim being reviewed or the beneficiary
who was referred for home health services.
Final Decision: We are finalizing this proposal as proposed.
Physician claims for certification/recertification of eligibility for
home health services (G0180 and G0179, respectively) will not be
covered if the HHA claim itself was non-covered because the
certification/recertification of eligibility was not complete or
because there was insufficient documentation to support that the
patient was eligible for the Medicare home health benefit. This
proposal will be implemented through future sub-regulatory guidance.
3. Proposed Clarification on When Documentation of a Face-to-Face
Encounter Is Required
In the CY 2011 HH PPS final rule (75 FR 70372), in response to a
commenter who asked whether the face-to-face encounter is required only
for the first episode, we stated that the Congress enacted the face-to-
face encounter requirement to apply to the physician's certification,
not recertifications. In sub-regulatory guidance (face-to-face
encounter Q&As on the CMS Web site at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/Home-Health-Questions-Answers.pdf), response to Q&A #11 states that the face-to-
face encounter requirement applies to ``initial episodes'' (the first
in a series of episodes separated by no more than a 60-day gap). The
distinction between what is considered a certification (versus a
recertification) and what is considered an initial episode is important
in determining whether the face-to-face encounter requirement is
applicable.
Recent inquiries question whether the face-to-face encounter
requirement applies to situations where the beneficiary was discharged
from home health with goals met/no expectation of return to home health
care and readmitted to home health less than 60 days later. In this
situation, the second episode will be considered a certification, not a
recertification, because the HHA will be required to complete a new
Start of Care (SOC) OASIS to initiate care. However, for payment
purposes, the second episode is considered a subsequent episode,
because there was no gap of 60 days or more between the first and
second episodes of care. Therefore, in order to determine when
documentation of a patient's face-to-face encounter is required under
sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act, we proposed to
clarify that the face-to-face encounter requirement is applicable for
certifications (not recertifications), rather than initial episodes. A
certification (versus recertification) is considered to be any time
that a new SOC OASIS is completed to initiate care. Because we proposed
to clarify that a certification is considered to be any time that a new
SOC OASIS is completed to initiate care, we will also revise Q&A #11 on
the CMS Web site (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/Home-Health-Questions-Answers.pdf) to
reflect this proposed clarification. If a patient was transferred to
the hospital and remained in the hospital after day 61 (or after the
first day of the next certification period), once the patient returns
home, a new SOC OASIS must be completed. Therefore, this new episode
will not be considered continuous and a face-to-face encounter needs to
be documented as part of the certification of patient eligibility.\14\
---------------------------------------------------------------------------

\14\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/OASIS/downloads/OASISConsiderationsforPPS.pdf
---------------------------------------------------------------------------

Comment: One commenter stated that they were confused by the
proposal and were seeking clarification as to whether CMS was proposing
to require documentation of a face-to-face encounter for all
certification episodes, initial and re-certifications.
Response: We are not requiring documentation of a face-to-face
encounter for all certification periods. Documentation of a face-to-
face encounter is only required for certifications and not re-
certifications. As previously noted, a certification (versus
recertification) is considered to be any time that a new SOC OASIS is
completed to initiate care. A recertification is any second or later
episode of continuous home health care (where a recertification/follow-
up OASIS is completed).\15\
---------------------------------------------------------------------------

\15\ We note that for instances where the patient was
hospitalized and then returns to home health during the last 5 days
of an episode of care, the requirement to complete a resumption of
care OASIS could overlap with the time period requiring completion
of a recertification/follow-up OASIS. In these instances, only the
resumption of care OASIS is necessary and the subsequent episode of
care would still be considered ``continuous'' and thus require a re-
certification of patient eligibility. If the patient receives a re-
certification assessment during days 56-60, is hospitalized, and
returns home on day 61 following, if the HHRG remains the same then
the second episode of care would be considered continuous and thus
be considered a re-certification. However, if the HHRG is different,
this would result in a new Start of Care (SOC) OASIS and thus be
considered a new certification.
---------------------------------------------------------------------------

Comment: A few commenters were supportive of the proposed
clarification on when documentation of a face-to-face encounter is
required. One commenter stated that their agency has been obtaining
these since the inception of the face-to-face requirement and that the

[[Page 66052]]

proposed clarification would not present a change. The commenter goes
on to state that the proposed clarification helps to ensure that the
patient continues to have real oversight from the community physician
that is overseeing the patient's care.
Response: We thank the commenters for their support of the proposed
clarification. We have heard, anecdotally, from several HHAs that they
are already in compliance with this proposed clarification and, as
such, this clarification will pose no additional burden for those HHAs.
We agree that equating a certification with any time a SOC OASIS is
completed to initiate care will further encourage physician
accountability in certifying a patient's eligibility for the Medicare
home health benefit and in establishing and overseeing the patient's
plan of care.
Comment: Several other commenters focused their comments solely on
instances where a patient was discharged and then readmitted during the
same 60-day episode of care. Commenters stated that CMS should not
finalize its proposal as these episodes are currently subject to
partial episode payment (PEP) adjustments and that the PEP adjustment
is an appropriate safeguard to prevent inappropriate utilization. A few
commenters asked CMS to clarify whether instances where the patient is
returning to home health post-discharge with care initiated with a new
SOC OASIS, but during (what would have been) the same 60-day episode of
care, would require documentation of a new physician face-to-face
encounter. A few commenters expressed concerns with the current PEP
policy and stated that some HHAs are not discharging patients that have
finished their course of treatment so that those episodes will not
become PEPs if the patient is discharged and returns to home care
within (what would have been) the 60-day episode of care.
Response: A Partial Episode Payment (PEP) is applied to home health
episodes that either end in discharge and are then followed by
readmission to the same home health agency (HHA) within (what would
have been) the original 60-day episode, or result in a transfer to a
HHA that is different than the HHA that provided the initial home
health episode. The purpose of this clarification is to ensure that
HHAs understand when they must document that a face-to-face encounter
occurred. For instances where a patient was discharged and then
readmitted during (what would have been) the same 60-day episode of
care, the second episode would be considered a certification as it
would be initiated with a SOC OASIS and would require documentation of
a face-to-face encounter. Depending on when the face-to-face encounter
occurred, the face-to-face encounter from the PEP episode could be used
for the new certification as long as it was performed within the
required timeframe and is still related to the primary reason the
patient requires home health services. The average number of days
between a PEP episode and a subsequent episode of care was 17.5 days,
with the 25th percentile at 5 days and the 75th percentile at 24 days
in CY 2012 and approximately 60 percent of the time there was a
hospitalization between a PEP episode and the subsequent episode of
care. For those instances where the patient was hospitalized between
the PEP episode and the subsequent episode of care, the patient would
have seen a physician, so documenting the face-to-face encounter as
part of the certification of eligibility for the subsequent episode of
care should be easily accomplished.
PEP episodes are paid a rate which is proportional to the days of
service provided during the episode. In CY 2012 only 2.2 percent of
episodes were PEP episodes. Table 9 below compares the number of days
in between the last visit and the ``through'' date on the claim for
PEPs and Non-PEP episodes. The distribution below for non-PEP episodes
does not indicate that there is a wide-spread issue with HHAs refusing
to discharge patients that have otherwise met all goals long before the
end of the 60-day episode in hopes of avoiding PEPs. However, we will
continue to monitor PEP episodes and will consider whether a refinement
to the PEP policy is necessary in the future.

Table 9--Distribution of Days Between the Last Episode Visit and Episode
Through Date for Non-PEP Episodes (n = 3,796,143) and PEP Episodes
(8,105) at least 55 days in Length, CY 2012
------------------------------------------------------------------------
Non-PEP PEP
Distribution point episodes Episodes
------------------------------------------------------------------------
10th Percentile............................... 1.0 1.0
25th Percentile............................... 1.0 1.0
50th Percentile (Median)...................... 2.0 1.0
Mean Average.................................. 4.7 6.9
75th Percentile............................... 4.0 7.0
90th Percentile............................... 7.0 24.0
99th Percentile............................... 52.0 51.0
------------------------------------------------------------------------
Source: Abt Associates analysis of 100% CY 2012 Medicare Home Health
claims data.

Comment: One commenter asked that CMS confirm that over 800,000
episodes fit into a category of admissions shortly following discharges
with goals met because that number seemed high.
Response: In the CY 2015 HH PPS proposed rule we noted, in the
Collection of Information section, that: ``we estimate that of the
6,562,856 episodes in the CY 2012 home health Datalink file, 3,096,680
SOC assessments were performed on initial home health episodes. If this
proposal is implemented, an additional 830,287 episodes would require
documentation of a face-to-face encounter for subsequent episodes that
were initiated with a new SOC OASIS assessment'' (79 FR 38412). This
includes instances where patients finished a 60-day episode of care,
were discharged, and then were re-admitted before 60 days lapsed
without having home health care. In addition, this estimate represents
a ``worst-case'' scenario as it does not account for instances where
HHAs already consider anytime a new SOC OASIS is completed as a
certification and are thus already in compliance. Home Health Compare,
via Medicare.gov, reports national and state-level data on how often
home health patients had to be admitted to the hospital and how often
patients receiving home health care needed urgent, unplanned care in
the ER without being admitted. Nationally, for CY 2013, 12 percent of
home health patients receiving home health care needed urgent,
unplanned care in the emergency room and 16 percent of home health
patients had to be admitted to the hospital. Subsequent episodes
initiated with a SOC OASIS represent 12.7 percent of all home health
episodes in the CY 2012 Datalink file. Most commenters focused on
instances where the initial episode of care was a PEP (that is, the
patient transferred to another HHA or was discharged before the end of
a 60-day episode and then re-admitted during what would have been the
same 60-day episode of care), which were only 2.2 percent of episodes
in CY 2012.
This clarification was intended to mostly respond to instances of
patients being discharged after the end of a 60-day episode of care and
then re-admitted without a 60-day gap in care before the start of the
next episode. For claims processing purposes (to categorize episodes
into ``early'' versus ``late'' for case-mix adjustment), these episodes
are considered subsequent episodes rather than initial episodes of
care. Sub-regulatory guidance (face-to-face encounter Q&As on the CMS
Web site at: https://www.cms.gov/Medicare/

[[Page 66053]]

Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/Home-Health-
Questions-Answers.pdf) stated that face-to-face encounter requirement
applies to ``initial episodes''. We received several questions from the
MACs and providers asking whether the face-to-face encounter was
required for instances where the patient was discharged at the end of a
60-day episode of care and then re-admitted, sometimes up to 50 days
later and for reasons completely unrelated to the previous episode of
care. This prompted us to propose a clarification in the CY 2015 HH PPS
proposed rule that would make it clear that documentation of a face-to-
face encounter is required for each certification and a certification
is any time a SOC OASIS is completed to initiate care.
Comment: One commenter stated that while it is understandable to
categorize the completion of a SOC OASIS as a certification, thus
requiring documentation of a face-to-face encounter, concerns exist
that this will increase burden without any direct benefit. Several
commenters stated that for subsequent episodes initiated with a SOC
OASIS, a certification (which requires documentation of a face-to-face
encounter) versus a recertification should be differentiated based on
whether the reason for home care changed. Several commenters stated
that a new face-to-face encounter should only be required when the
second admission to home health services is for a wholly different
reason than presented in the original admission. One commenter stated
that a subsequent episode should only be considered a certification
(which requires documentation of a face-to-face encounter) when a new
physician is the certifying physician or if a new home health agency is
providing the care.
Response: If the patient is hospitalized during a 60-day episode of
care and is expected to return to home health during the same 60-day
episode of care, the HHA has the option to complete a transfer OASIS
without discharging the patient. If the patient returns to home heath
during that same 60-day home health episode, a resumption of care OASIS
would be completed upon return, and depending on when the patient
returned to home health, a re-certification/follow-up OASIS would be
completed during the last 5 days of the episode. The subsequent episode
would be considered continuous for re-certification purposes and
documentation of a face-to-face encounter would not be required. More
often than not, the primary reason for home care is changing between
episodes of care when the subsequent episode of care is initiated with
a SOC OASIS, regardless of whether the patient remains with the same
HHA or is receiving care from another HHA. As such, we are clarifying
that documentation that face-to-face encounter occurred is required for
every certification and that a certification (versus recertification)
is considered to be any time that a new SOC OASIS is completed to
initiate care.
When comparing the primary reason for home health care (the primary
diagnosis (item M1020) on the OASIS) at the ICD-9-CM three-digit
category level, subsequent episodes initiated with a SOC OASIS had a
different primary diagnosis (primary reason for home care) than the
previous episode of care approximately 73 percent of the time. The
subsequent episode's primary diagnosis was different from the previous
episodes' primary diagnosis approximately 70 percent of the time when
the subsequent episode of care was with the same HHA, and 80 percent of
the time when the subsequent episode of care with a different HHA. Just
examining the subsequent episodes of care that follow a PEP, we found
that subsequent episodes of care initiated with a SOC OASIS had a
different primary diagnosis than the previous episode of care
approximately 72 percent of the time. The subsequent episode's primary
diagnosis was different from the previous PEP episodes' primary
diagnosis approximately 66 percent of the time when the subsequent
episode of care was with the same HHA, and 76 percent of the time when
the subsequent episode of care with a different HHA.
As we noted above, for CY 2012, approximately 60 percent of the
time there was a hospitalization between a PEP episode and the
subsequent episode of care. Therefore, we determined whether there was
an intervening hospitalization between the PEP episode and the episode
that follows (observed in the 60 days prior to the subsequent episode's
start) and if so, whether there were differences in the clinical and
functional levels between the PEP episode and the subsequent episode of
care (Table 10 and Table 11 below). Overall, clinical levels only
matched in 53 percent of instances. Functional levels matched in 63
percent of instances. Clinical levels are higher in 24 percent of the
episodes that follow PEP episodes and lower in 22 percent of episodes.
Functional levels are higher in approximately 20 percent of episodes
that follow PEP episodes and lower in 17 percent of episodes.

Table 10--Cross-Tabulation of Clinical Level Between a Partial Episode Payment (PEP) Episode and Episodes That
Follow by Intervening Hospitalization Presence, CY 2012
----------------------------------------------------------------------------------------------------------------
No intervening hospitalization [Total Intervening hospitalization [Total
episodes = 81,719] episodes = 30,416]
-----------------------------------------------------------------------------
Low Medium High Low Medium High
----------------------------------------------------------------------------------------------------------------
Low............................... 12.3% 7.1% 5.4% 9.2% 6.9% 5.1%
Medium............................ 7.8% 12.2% 11.4% 6.7% 12.8% 12.7%
High.............................. 4.8% 9.8% 29.1% 4.1% 10.8% 31.7%
----------------------------------------------------------------------------------------------------------------
Source: Abt Associates analysis of 100% Medicare Home Health claims, CY 2012.
Note(s): Low = Clinical level 1; Medium = Clinical level 2; High = Clinical level 3 as described in section
III.C of this rule.

Table 11--Cross-Tabulation of Functional Level Between a Partial Episode Payment (PEP) Episode and Episodes That
Follow by Intervening Hospitalization Presence, CY 2012
----------------------------------------------------------------------------------------------------------------
No intervening hospitalization [Total Intervening hospitalization [Total
episodes = 81,719] episodes = 30,416]
-----------------------------------------------------------------------------
Low Medium High Low Medium High
----------------------------------------------------------------------------------------------------------------
Low............................... 6.6% 7.8% 1.4% 6.4% 8.4% 1.4%

[[Page 66054]]

Medium............................ 6.9% 38.6% 10.3% 8.3% 40.6% 10.4%
High.............................. 1.1% 8.5% 18.8% 1.0% 8.1% 15.3%
----------------------------------------------------------------------------------------------------------------
Source: Abt Associates analysis of 100% Medicare Home Health claims, CY 2012.
Note(s): Low = Functional level 1; Medium = Functional level 2; High = Functional level 3 as described in
section III.C of this rule.

Final Decision: In order to determine when documentation of a
patient's face-to-face encounter is required under sections
1814(a)(2)(C) and 1835 (a)(2)(A) of the Act, we are clarifying that the
face-to-face encounter requirement is applicable for certifications
(not re-certifications), rather than initial episodes. A certification
(versus recertification) is considered to be any time that a new Start
of Care OASIS is completed to initiate care.

C. Recalibration of the HH PPS Case-Mix Weights

As stated in the CY 2015 proposed rule, for CY 2012, we removed two
hypertension codes from our case-mix system and recalibrated the case-
mix weights in a budget neutral manner. When recalibrating the case-mix
weights for the CY 2012 HH PPS final rule, we used CY 2005 data in the
four-equation model used to determine the clinical and functional
points for a home health episode and CY 2007 data in the payment
regression model used to determine the case-mix weights. We estimated
the coefficients for the variables in the four-equation model using CY
2005 data to maintain the same variables we used for CY 2008 when we
implemented the four-equation model, thus minimizing substantial
changes. Due to a noticeable shift in the number of therapy visits
provided as a result of the 2008 refinements, at the time, we decided
to use CY 2007 data in the payment regression. As part of the CY 2012
recalibration, we lowered the high therapy weights and raised the low
or no therapy weights to address MedPAC's concerns that the HH PPS
overvalues therapy episodes and undervalues non-therapy episodes (March
2011 MedPAC Report to the Congress: Medicare Payment Policy, p. 176).
These adjustments better aligned the case-mix weights with episode
costs estimated from cost report data. The CY 2012 recalibration,
itself, was implemented in a budget neutral manner. However, we noted
that in the CY 2012 HH PPS final rule, we also finalized a 3.79 percent
reduction to payments in CY 2012 and a 1.32 percent reduction for CY
2013 to account for the nominal case-mix growth identified through CY
2009.
For CY 2014, as part of the rebasing effort mandated by the
Affordable Care Act, we reset the case-mix weights, lowering the
average case-mix weight to 1.0000. To lower the case-mix weights to
1.0000, each case-mix weight was decreased by the same factor (1.3464),
thereby maintaining the same relative values between the weights. This
``resetting'' of the case-mix weights was done in a budget neutral
manner, inflating the national, standardized 60-day episode rate as the
starting point for rebasing by the same factor (1.3464) that was used
to decrease the weights. In the CY 2014 HH PPS final rule, we also
finalized reductions ($80.95) to the national, standardized 60-day
episode payment amount each year from CY 2014 through CY 2017 to better
align payments with costs (78 FR 72293), as required by the Affordable
Care Act.
For CY 2015, we proposed to recalibrate the case-mix weights,
adjusting the weights relative to one another, using more current data
and aligning payments with current utilization data in a budget neutral
manner. We also proposed to recalibrate the case-mix weights annually
in subsequent payment updates based on the methodology finalized in the
2008 refinements (72 FR 25359-25392) and the CY 2012 HH PPS final rule
(76 FR 68526), with minor changes as described below. To generate the
CY 2015 case-mix weights, we used CY 2013 home health claims data (as
of June 30, 2014) and used the same methodology finalized in the CY
2012 HH PPS final rule, except where noted below. Similar to the CY
2012 recalibration, some exclusion criteria were applied to the CY 2013
home health claims data used to generate the CY 2015 case-mix weights.
Specifically, we excluded Request for Anticipated Payment (RAP) claims,
claims without a matched OASIS, claims where total minutes equal 0,
claims where the payment amount equals 0, claims where paid days equal
0, claims where covered visits equal 0, and claims without a HIPPS
code. In addition, the episodes used in the recalibration were normal
episodes. PEP, LUPA, outlier, and capped outlier (that is, episodes
that are paid as normal episodes, but would have been outliers had the
HHA not reached the outlier cap) episodes were dropped from the data
file.\16\ We note that for the CY 2015 recalibration, a 100 percent
sample of CY 2013 claims data as of June 30, 2014 with linked OASIS
data was used.\17\
---------------------------------------------------------------------------

\16\ At a later point, when normalizing the weights, PEP
episodes are included in the analysis.
\17\ Note, for the last recalibration (CY 2012 recalibration),
only a 20 percent sample of data was used.
---------------------------------------------------------------------------

Similar to the CY 2012 recalibration, the first step in the CY 2015
recalibration was to re-estimate the four-equation model used to
determine the clinical and functional points for an episode. The
dependent variable for the CY 2015 recalibration is the same as the CY
2012 recalibration, wage-weighted minutes of care. The wage-weighted
minutes of care are determined using the CY 2012 Bureau of Labor
Statistics national hourly wage plus fringe rates for the six home
health disciplines and the minutes per visit from the claim.\18\
---------------------------------------------------------------------------

\18\ Note, wage information for sub-disciplines is also used
(e.g., RNs versus RNs and LPNs combined).
---------------------------------------------------------------------------

The CY 2012 four-equation model contained the same variables and
restrictions as the four-equation model used in the CY 2008 refinements
(https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Reports/Downloads/Coleman_Final_April_2008.pdf). The
CY 2012 model was estimated using CY 2005 data, same data used in the
CY 2008 refinements, thereby minimizing changes in the points for the
CY 2012 four-equation model. For the CY 2015 four-equation model, we
re-examined all of the four-equation or ``leg'' variables for each of
the 51 grouper variables in the CY 2008 model. Therefore, a grouper
variable that may have dropped out of the model

[[Page 66055]]

in one of the four equations in CY 2008 may be in the CY 2015 four-
equation model and vice versa. Furthermore, the specific therapy
indicator variables that were in the CY 2012 four-equation model were
dropped in the CY 2015 four-equation model so that the number of
therapy visits provided had less of an impact on the process used to
create the case-mix weights.
The steps used to estimate the four-equation model are similar to
the steps used in the CY 2008 refinements. They are as follows: \19\
---------------------------------------------------------------------------

\19\ All the regressions mentioned in steps 1-4 are estimated
with robust standard errors clustered at the beneficiary ID level.
This is to account for beneficiaries appearing in the data multiple
times. When that occurs, the standard errors can be correlated
causing the p-value to be biased downward. Clustered standard errors
account for that bias.
---------------------------------------------------------------------------

(1) We estimated a regression model where the dependent variable is
wage-weighted minutes of care. Independent variables were indicators
for which equation or ``leg'' the episode is in. The four legs of the
model are leg 1: early episodes 0-13 therapy visits, leg 2: early
episodes 14+ therapy visits, leg 3: Later episodes 0-13 therapy visits,
and leg 4: later episodes 14+ therapy visits.\20\Also, independent
variables for each of the 51 grouper variables for each leg of the
model are included.
---------------------------------------------------------------------------

\20\ Early episodes are defined as the 1st or 2nd episode in a
sequence of adjacent covered episodes. Later episodes are defined as
the 3rd episode and beyond in a sequence of adjacent covered
episodes. Episodes are considered to be adjacent if they are
separated by no more than a 60-day period between claims.
---------------------------------------------------------------------------

(2) Once the four-equation model is estimated, we drop all grouper
variables with a coefficient less than 5. We re-estimate the model and
continue to drop variables and re-estimate until there are no grouper
variables with a coefficient of 5 or less.
(3) Taking the final iteration of the model in the previous step,
we drop all grouper variables with a p-value greater than 0.10. We then
re-estimate the model.
(4) Taking the model in the previous step, we begin to apply
restrictions to certain coefficients. Within a grouper variable we
first look across the coefficients for leg1 and leg3. We performed an
equality test on those coefficients. If the coefficients are not
significantly different from one another (using a p-value of 0.05), we
set a restriction for that grouper variable such that the coefficients
are equal across leg1 and leg3. We run these tests for all grouper
variables for leg1 and leg3. We also run these tests for all grouper
variables for leg2 and leg4.\21\ After all restrictions are set, we re-
run the regression again taking those restrictions into account.
(5) Taking the model from step 4, we drop variables that have a
coefficient less than 5 and re-estimate the model a final time. Using
complete 2013 claims data as of June 30, 2014, there were no grouper
variables with a negative coefficient at this step.
---------------------------------------------------------------------------

\21\ In the CY 2008 rule, there was a further step taken to
determine if the coefficients of a grouper variable are equal across
all 4 legs. This step was not taken at this time.
---------------------------------------------------------------------------

The results from the final four-equation model are used to
determine the clinical and functional points for an episode and place
episodes in the different clinical and functional levels. We take the
coefficients from the four equation model, divide them by 10, and round
to the nearest integer to determine the points associated with each
variable. The points for each of the grouper variables for each leg of
the model, updated with complete CY 2013 data as of June 30, 2014, are
shown in Table 12. The points for the clinical variables are added
together to determine an episode's clinical score. The points for the
functional variables are added together to determine an episode's
functional score.

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In updating the four-equation model with 2013 data (the last update
to the four-equation model used 2005 data), there were a number of
changes to the point values for the variables in the four-equation
model. These changes reflect the change in the relationship between the
grouper variables and resource use since 2005. The CY 2015 four-
equation model resulted in 124 point-giving variables being used in the
model (as compared to the 164 variables for the 2012 recalibration).
There were 21 variables that were added to the model and 63 variables
that were dropped from the model due to the absence of additional
resources associated with the variable. The points for 57 variables
increased in the CY 2015 four-equation model and the points for 25
variables in decreased in the CY 2015 four-equation model. There were
17 variables with the same point values.
Since there were a number of changes to the point values associated
with the four-equation model, we are redefining the clinical and
functional thresholds so that they would be reflective of the new
points associated with the CY 2015 four-equation model. Specifically,
after estimating the points for each of the variables and summing the
clinical and functional points for each episode, we looked at the
distribution of the clinical score and functional score, breaking the
episodes into different steps. The categorizations for the steps are as
follows:
Step 1: First and second episodes, 0-13 therapy visits.
Step 2.1: First and second episodes, 14-19 therapy visits.
Step 2.2: Third episodes and beyond, 14-19 therapy visits.
Step 3: Third episodes and beyond, 0-13 therapy visits.
Step 4: Episodes with 20+ therapy visits
Similar to the methodology used in the CY 2008 refinements, we then
divide the distribution of the clinical score for episodes within a
step such that a third of episodes are classified as low clinical
score, a third of episodes are classified as medium clinical score, and
a third of episodes are classified as high clinical score. The same
approach is then done looking at the functional score. It was not
always possible to evenly divide the episodes within each step into
thirds due to many episodes being clustered around one particular
score.\22\ Also, we looked at the average resource use associated with
each clinical and functional score and used that to guide where we
placed our thresholds. We tried to group scores with similar average
resource use within the same level (even if it meant that more or less
than a third of episodes were placed within a level). The new
thresholds, based off of the CY 2015 four-equation model, points are
shown in Table 13.
---------------------------------------------------------------------------

\22\ For Step 1, 55% of episodes were in the medium functional
level (All with score 15).
For Step 2.1, 60.7% of episodes were in the low functional level
(Most with score 3, some with score 0).
For Step 2.2, 58.3% of episodes were in the low functional level
(All with score 0).
For Step 3, 52.1% of episodes were in the medium functional
level (all with score 10).
For Step 4, 41.7% of episodes were in the medium functional
level (almost all with score 3).

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Once the thresholds were determined and each episode was assigned a
clinical and functional level, the payment regression was estimated
with an episode's wage-weighted minutes of care as the dependent
variable. Independent variables in the model were indicators for the
step of the episode as well as the clinical and functional levels
within each step of the episode. Like the four-equation model, the
payment regression model is also estimated with robust standard errors
that are clustered at the beneficiary level. Table 14 shows the
regression coefficients for the variables in the payment regression
model updated with complete CY 2013 data. The R-squared value for the
payment regression model is 0.4680 (an increase from 0.3769 for the CY
2012 recalibration).

Table 14--Payment Regression Model
------------------------------------------------------------------------
New payment
Variable description regression
coefficients
------------------------------------------------------------------------
Step 1, Clinical Score Medium........................... $24.36
Step 1, Clinical Score High............................. 61.06
Step 1, Functional Score Medium......................... 81.65
Step 1, Functional Score High........................... 121.95
Step 2.1, Clinical Score Medium......................... 56.47
Step 2.1, Clinical Score High........................... 177.00
Step 2.1, Functional Score Medium....................... 26.09
Step 2.1, Functional Score High......................... 91.13
Step 2.2, Clinical Score Medium......................... 91.83
Step 2.2, Clinical Score High........................... 206.75
Step 2.2, Functional Score Medium....................... 6.22
Step 2.2, Functional Score High......................... 88.98
Step 3, Clinical Score Medium........................... 11.00
Step 3, Clinical Score High............................. 89.06
Step 3, Functional Score Medium......................... 50.88
Step 3, Functional Score High........................... 86.69
Step 4, Clinical Score Medium........................... 74.96
Step 4, Clinical Score High............................. 241.95
Step 4, Functional Score Medium......................... 35.12
Step 4, Functional Score High........................... 91.41
Step 2.1, 1st and 2nd Episodes, 14 to 19 Therapy Visits. 447.08
Step 2.2, 3rd+ Episodes, 14 to 19 Therapy Visits........ 456.36
Step 3, 3rd+ Episodes, 0-13 Therapy Visits.............. -65.98
Step 4, All Episodes, 20+ Therapy Visits................ 872.95
Intercept............................................... 378.43
------------------------------------------------------------------------
Source: CY 2013 Medicare claims data for episodes ending on or before
December 31, 2013 (as of June 30, 2014) for which we had a linked
OASIS assessment.

The method used to derive the CY 2015 case-mix weights from the
payment regression model coefficients is the same as the method used to
derive the CY 2012 case-mix weights. This method is described below.
(1) We used the coefficients from the payment regression model to
predict each episode's wage-weighted minutes of care (resource use). We
then divided these predicted values by the mean of the dependent
variable (that is, the

[[Page 66061]]

average wage-weighted minutes of care across all episodes used in the
payment regression). This division constructs the weight for each
episode, which is simply the ratio of the episode's predicted wage-
weighted minutes of care divided by the average wage-weighted minutes
of care in the sample. Each episode was then aggregated into one of the
153 home health resource groups (HHRGs) and the ``raw'' weight for each
HHRG was calculated as the average of the episode weights within the
HHRG.
(2) The weights associated with 0 to 5 therapy visits were then
increased by 3.75 percent, the weights associated with 14-15 therapy
visits were decreased by 2.5 percent, and the weights associated with
20+ therapy visits were decreased by 5 percent. These adjustments to
the case-mix weights are the same as the ones used in the CY 2012
recalibration (76 FR 68557) and were done to address MedPAC's concerns
that the HH PPS overvalues therapy episodes and undervalues non-therapy
episodes (March 2011 MedPAC Report to the Congress: Medicare Payment
Policy, p. 176). These adjustments better aligned the case-mix weights
with episode costs estimated from cost report data.
(3) After the adjustments in step (2) were applied to the raw
weights, the weights were further adjusted to create an increase in the
payment weights for the therapy visit steps between the therapy
thresholds. Weights with the same clinical severity level, functional
severity level, and early/later episode status were grouped together.
Then within those groups, the weights for each therapy step between
thresholds were gradually increased. We did this by interpolating
between the main thresholds on the model (from 0-5 to 14-15 therapy
visits, and from 14-15 to 20+ therapy visits). We used a linear model
to implement the interpolation so the payment weight increase for each
step between the thresholds (such as the increase between 0-5 therapy
visits and 6 therapy visits and the increase between 6 therapy visits
and 7-9 therapy visits) was constant. This interpolation is the
identical to the process finalized in the CY 2012 final rule (76 FR
68555).
(4) The interpolated weights were then adjusted so that the average
case-mix for the weights was equal to 1.\23\ This last step creates the
final CY 2015 case-mix weights shown in Table 15.
---------------------------------------------------------------------------

\23\ When computing the average, we compute a weighted average,
assigning a value of one to each normal episode and a value equal to
the episode length divided by 60 for PEPs.

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To ensure the changes to the case-mix weights are implemented in a
budget neutral manner, we proposed to apply a case-mix budget
neutrality factor to the CY 2015 national, standardized 60-day episode
payment rate (see section III.D.4. of this final rule). The case-mix
budget neutrality factor is calculated as the ratio of total payments
when CY 2015 case-mix weights are applied to CY 2013 utilization
(claims) data to total payments when CY 2014 case-mix weights are
applied to CY 2013 utilization data. This produces a final case-mix
budget neutrality factor for CY 2015 of 1.0366, based on CY 2013 claims
data as of June 30, 2014. The case-mix budget neutrality factor
(1.0366) also takes into account the re-grouping of episodes according
to the point values from the four-equation model and new clinical and
functional thresholds described in section III.C, which contributes
0.0090 to the case-mix budget neutrality factor.
Section 1895(b)(3)(B)(iv) of the Act gives us the authority to
implement payment reductions for nominal case-mix growth (that is,
changes in case-mix that are not related to actual changes in patient
characteristics over time). Previously, we accounted for nominal case-
mix growth from 2000 to 2009 through case-mix reductions implemented
from 2008 through 2013 (76 FR 68528-68543). In the CY 2013 HH PPS
proposed rule, we stated that we found that 15.97 percent of the total
case-mix change was real from 2000 to 2010 (77 FR 41553). In the CY
2014 HH PPS final rule, we used 2012 claims data to rebase payments (78
FR 72277). Since we were resetting the payment amounts with 2012 data,
we did not take into account any additional nominal case-mix growth.
For the proposed rule, we examined case-mix growth from CY 2012 to CY
2013 using CY 2012 and preliminary CY 2013 claims data. For this final
rule, in updating our analysis with CY 2013 claims data as of June 30,
2014, we estimate that case-mix increased by 2.76 percent between CY
2012 and CY 2013. In applying the 15.97 percent estimate of real case-
mix growth to the total estimated case-mix growth from CY 2012 to CY
2013 (2.76 percent), we estimate that 2.32 percent (2.76-(2.76 *
0.1597)) of the case-mix growth is nominal (that is, case-mix growth
that is unrelated to changes in patient acuity).
We estimate that the case-mix budget neutrality factor of 1.0366
would have to be reduced to 1.0134 to account for nominal case-mix
growth ((1.0366-0.0276) + (0.0276*0.1597) = 1.0134). While we
considered adjusting the case-mix budget neutrality factor to take into
account the growth in nominal case-mix (2.32 percent), which would
result in a case-mix budget neutrality adjustment of 1.0134 rather than
1.0366, we will apply the full 1.0366 case-mix budget neutrality factor
to the national, standardized 60-day episode payment rate. We will
continue to monitor case-mix growth and may consider whether to propose
nominal case-mix reductions in future rulemaking.
The following is a summary of the comments and our responses to
comments on the CY 2015 proposed case-mix weights and methodology:
Comment: Commenters stated that CMS has not provided complete
technical information on the nature and basis for the revisions to the
case-mix weights and variables in the model and therefore, the
recalibration of the weights cannot be sufficiently evaluated.
Commenters stated that unlike previous recalibrations, CMS has not
provided the technical report on the proposed recalibration of the
weights and that CMS did not publish the data or the analysis used to
support its conclusions. Commenters stated that a full technical report
on the methodology and regression analysis would be valuable in
understanding the reliability and validity of the recalibration and
would allow stakeholders to conduct their own evaluations as well. A
commenter recommended that CMS make all technical reports and analyses
regarding the recalibration of the case-mix weights publicly available
immediately in order to permit stakeholders to review the significant
changes described in the proposed rule.
Response: As stated in the CY 2015 proposed rule, the methodology
used to recalibrate the weights is identical to the methodology used in
the CY 2012 recalibration except for the minor exceptions noted in the
proposed rule. We encourage commenters to refer to the CY 2012 proposed
and final rule and the CY 2012 technical report on our home page at
https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.html for additional information about the recalibration
methodology.
Comment: Commenters stated that the recalibration of the high
volume therapy episodes will lead to financial incentives to increase
therapy visits even though CMS has indicated that therapy visit volume
should have less impact on the weights. They stated that the changes to
the proposed case-mix weights contradict what was said previously
regarding undervalue of clinical elements and over-value of the therapy
component. Commenters presented their analyses comparing the CY 2014
weights to the CY 2015 weights and payments associated with each of the
HHRGs. Commenters stated that under the CY 2015 proposed case-mix
weights, a majority of the HHRGs with low therapy visits will have
losses and a large number of the high therapy groups and all of the 20+
therapy episodes will receive substantial increases to their weights.
Commenters stated that these results seem to contradict the adjustment
discussion in the CY 2015 proposed rule.
Response: We note that the CY 2015 recalibration is based on 2013
claims data, which is six to eight years more current than the claims
data used in the CY 2012 recalibration. The 2013 data also reflects the
2008 refinements to the HH PPS, which included the change from one
therapy threshold to multiple therapy thresholds and the change from 80
HHRGs to 153 HHRGs. Given the time difference in the data used for the

[[Page 66067]]

two recalibrations, one would expect differences in the resulting case-
mix weights. However, comparing the CY 2015 proposed case-mix weights
to the CY 2014 final weights; we observed that over 60% of normal
episodes would have a case-mix weight change of 5 percent or less.
Furthermore, few episodes have an increase in their case-mix weight
that exceeds 5 percent (14.2 percent) and very few episodes have an
increase in their case-mix weight that exceeds 10 percent (0.4
percent).
The changes in case-mix weights can be mostly attributed to shifts
in utilization patterns between 2005/2007 and 2013. Over that six to
eight year time period, we find a notable shift across all therapy
groups away from the use of home health aides and a shift to either
more nursing or more therapy care (see Tables 16 and 17 below). While
some of the low therapy groups did add more skilled nursing visits,
most of the therapy groups added more occupational therapy (OT) and
speech-language pathology (SLP), which have substantially higher Bureau
of Labor Statistics (BLS) average hourly wage values compared to
skilled nursing ($39/hr for skilled nursing versus $55 for OT and $60
for SLP).

Table 16--Summary Statistics--Episodes From 2013
[Only normal episodes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of All All
Therapy group episodes Nursing Aides PT OT SLP MSS therapy visits
--------------------------------------------------------------------------------------------------------------------------------------------------------
0-5................................................ 2,951,379 8.9 2.1 0.6 0.1 0.0 0.1 0.7 11.8
6.................................................. 224,325 6.0 1.3 5.2 0.6 0.1 0.1 6.0 13.3
7-9................................................ 664,911 6.5 1.5 6.9 0.9 0.2 0.2 7.9 16.0
10................................................. 184,871 6.8 1.7 8.5 1.3 0.2 0.2 10.0 18.6
11-13.............................................. 532,875 7.1 2.0 10.0 1.7 0.3 0.2 12.0 21.2
14-15.............................................. 249,627 7.3 2.4 11.6 2.4 0.4 0.2 14.5 24.3
16-17.............................................. 267,500 6.5 2.5 13.5 2.5 0.4 0.2 16.4 25.6
18-19.............................................. 173,769 7.0 2.6 13.8 4.0 0.6 0.2 18.4 28.2
20+................................................ 328,295 8.1 3.5 14.9 7.9 1.9 0.3 24.8 36.6
----------------------------------------------------------------------------------------------------
Total.......................................... 5,577,552 7.9 2.1 5.1 1.2 0.2 0.1 6.5 16.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Data on episodes with a through date in 2013 using complete CY 2013 claims data as of June 30, 2014.

Table 17--Summary Statistics--Episodes From 2007 (File Used in CY 2012 Recalibration)
[Only normal episodes]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of All All
Therapy group episodes Nursing Aides PT OT SLP MSS therapy visits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average number of visits for Normal episodes with a
through date in 2007
0-5................................................ 520,639 9.3 3.6 0.6 0.1 0.0 0.1 0.7 13.7
6.................................................. 28,349 5.5 1.7 5.3 0.6 0.1 0.2 6.0 13.4
7-9................................................ 59,156 5.9 2.1 6.9 0.9 0.1 0.2 7.9 16.1
10................................................. 47,798 7.2 2.8 8.9 1.0 0.1 0.2 10.0 20.1
11-13.............................................. 107,970 7.2 3.5 10.5 1.2 0.1 0.2 11.9 22.7
14-15.............................................. 38,188 7.3 4.0 12.1 2.1 0.3 0.2 14.5 25.9
16-17.............................................. 29,322 7.2 4.4 13.6 2.5 0.4 0.2 16.5 28.4
18-19.............................................. 17,679 7.4 4.4 14.4 3.5 0.5 0.2 18.4 30.5
20+................................................ 39,395 7.4 5.2 16.3 7.1 1.5 0.3 24.9 37.9
Total.......................................... 888,496 8.3 3.5 4.7 0.9 0.1 0.1 5.7 17.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Data on episodes ending in 2007 using a 20% sample of 2007 data from the home health Datalink file.

In addition, while the average number of total visits per episode
has decreased overall, it decreased disproportionately more for the no/
low therapy group (which constitute over 50 percent of all episodes)
compared to the remaining groups (see Table 18 below). These
utilization changes result in changes to the weights observed by the
commenters, specifically, the decreases in the case-mix weights for the
low or no therapy groups and increases in the case-mix weights for the
high therapy groups.

Table 18--Percent Change in the Average Number of Visits by Therapy
Group, 2007 and 2013
------------------------------------------------------------------------
Percent
change in
Therapy group visits
from 2007
to 2013
------------------------------------------------------------------------
0-5........................................................ -13.92
6.......................................................... 0.18
7-9........................................................ 0.32
10......................................................... -7.38
11-13...................................................... -6.63
14-15...................................................... -6.14
16-17...................................................... -9.89
18-19...................................................... -7.73
20+........................................................ -3.46
------------------------------------------------------------------------

We would like to clarify that the adjustments applied to the case-
mix weights are not in addition to the

[[Page 66068]]

adjustments applied in 2012, but rather are the same adjustments as the
ones applied to the 2012 data. In other words, the 3.75 percent
increases to the weights associated with 0 to 5 therapy visits, the 2.5
percent decreases to the weights associated with 14-19 therapy visits,
and 5 percent decreases to the weights associated with 20+ therapy
visits are applied to the raw weights resulting from 2013 claims data.
We did not take the CY 2012 case-mix weights and further adjust them.
Therefore, one should not expect to see higher weights for low or no
therapy episodes and lower weights for high therapy episodes when
comparing the CY 2015 proposed case-mix weights to the CY 2014 weights,
which have the same relative values as the 2012 case-mix weights.
We note that by removing the therapy indicator variables from the
four equation model and moving away from the use of therapy visits in
the model that the case-mix weights for high therapy groups were lower
than what they would have been if the therapy indicator variables were
included in the model. We also note that the final case-mix weights for
the highest therapy HHRGs (those groups of episodes with 20 or more
therapy visits) slightly decreased when comparing the CY 2015 final
case-mix weights, based on complete CY 2013 data as of June 30, 2014,
to the CY 2015 proposed case-mix weights, based on preliminary CY 2013
data as of December 31, 2013.
Comment: One commenter was supportive of the recalibration proposal
and agreed that the proposed recalibration strikes an appropriate
balance between discouraging inappropriate use of therapy while
addressing concerns that non-therapy services are undervalued.
Response: We thank the commenter for their support.
Comment: A commenter stated that the increase in therapy visits was
due to therapists providing clinically necessary skilled care, not due
to manipulating the therapy reimbursement process. Another commenter
questioned whether CMS utilized multiple years of OASIS data to
consider the change in functional status of those patients who receive
low numbers of therapy visits versus those receiving 20 or more therapy
visits and if the change noted at both ends of the spectrum of therapy
utilization are appropriately reflected in the recalibration effort.
Another commenter stated that CMS' proposed changes do not appear to be
based on any reasoned consideration of why the visit time data is the
way it is.
Response: The case-mix weights are driven by the 2013 claims data
with the same adjustments finalized in CY 2012 to better align payment
for high and no/low therapy episodes with cost. The proposed
recalibration of the case-mix weights used the methodology proposed and
finalized in CY 2012, with a few noted differences outlined above and
in the CY 2015 HH PPS proposed rule. We did not set the weights based
on what levels of services we thought were appropriate. Any changes in
the case-mix weights for CY 2015 are driven by utilization patterns
observed in CY 2013 claims data.
Comment: A commenter stated that the case-mix weights appear to
decrease payments for third or later episodes of care. The commenter
stated that many home health providers serve patients with multiple
chronic conditions and that the patients often have significant medical
issues. The commenter stated that reducing payments for such episodes
of care will likely have an impact on how home health providers will
treat patients with chronic conditions. The commenter asked for more
clarifications regarding what practice or utilization changes we are
trying to achieve and if we could explain if there are particular types
of patients we believe should not be receiving third episodes of home
health care and/or if there are certain patients who should receive a
different approach to care that would be less costly than the care
delivered at present.
Response: We reiterate that CY 2015 the case-mix weights are
reflective of the utilization patterns observed in the CY 2013 claims
data. We have not manipulated the case-mix weights to encourage certain
patterns of care for the third or later episodes. The case-mix weights
are driven by the mix of services provided, the costs of services
provided as determined by the BLS hourly rates, the length of the
visits, and the number of visits provided. Any decreases in the case-
mix weights for third or later episodes of care reflect less average
resources associated with those episodes using 2013 claims data than
the average resources associated with third and later episodes using
2007 data, which was the data used in the 2012 recalibration.
We note that when comparing the visit distribution in 2013 versus
2007 for third and later episodes, we observe large decreases in the
total visit count in 2013 versus 2007 for these episodes (see Table 19
and Table 20). As shown in Table 21, the number of total visits for the
third and later episodes, on average, decreased significantly, ranging
from -8.30 percent to -19.01 percent, for the various therapy groups.
The decreases in the case-mix weights for third or later episode
episodes for CY 2015 versus CY 2014 may be due to the decrease in total
visits for these episodes between 2007 and 2013.

Table 19--Average Number of Visits for Third and Later Episodes of Care (Not Including 20+ Therapy Visit Episodes Which May Be Early or Late), CY 2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of All All
Therapy group episodes Nursing Aides PT OT SLP MSS therapy visits
--------------------------------------------------------------------------------------------------------------------------------------------------------
0-5................................................ 1,424,148 9.2 3.2 0.2 0.0 0.0 0.1 0.3 12.7
6.................................................. 38,406 7.8 2.6 4.9 0.8 0.2 0.1 6.0 16.5
7-9................................................ 125,743 8.2 2.9 6.7 1.0 0.3 0.1 7.9 19.1
10................................................. 37,482 8.4 2.9 8.5 1.2 0.3 0.1 10.0 21.4
11-13.............................................. 120,115 8.4 3.2 10.2 1.5 0.3 0.1 12.0 23.7
14-15.............................................. 68,540 8.3 3.5 12.1 1.9 0.5 0.1 14.5 26.3
16-17.............................................. 77,730 7.2 3.6 13.9 2.0 0.4 0.1 16.4 27.3
18-19.............................................. 41,557 7.6 3.6 14.2 3.5 0.6 0.1 18.3 29.7
-------------
Total.......................................... 1,933,721 8.9 3.2 2.8 0.5 0.1 0.1 3.3 15.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Data on normal episodes of care with a through date in 2013 using complete CY 2013 claims data as of June 30, 2014.

[[Page 66069]]

Table 20--Average Number of Visits for Third and Later Episodes of Care (Not Including 20+ Therapy Visit Episodes Which May Be Early or Late), CY 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of All All
Therapy group episodes Nursing Aides PT OT SLP MSS therapy visits
--------------------------------------------------------------------------------------------------------------------------------------------------------
0-5................................................ 227,934 9.6 5.9 0.2 0.0 0.0 0.1 0.2 15.7
6.................................................. 3,068 7.7 4.1 5.0 0.8 0.2 0.1 6.0 18.0
7-9................................................ 7,458 8.1 4.6 6.7 1.1 0.2 0.2 8.0 20.8
10................................................. 9,510 9.0 5.2 8.7 1.1 0.2 0.1 10.0 24.3
11-13.............................................. 21,620 9.0 5.8 10.4 1.3 0.2 0.1 11.9 26.8
14-15.............................................. 7,736 8.6 6.4 12.4 1.8 0.3 0.1 14.5 29.6
16-17.............................................. 6,481 8.2 7.0 14.1 1.9 0.4 0.1 16.5 31.8
18-19.............................................. 2,982 8.8 6.7 14.9 3.0 0.5 0.2 18.4 34.0
-------------
Total.......................................... 292,873 9.4 5.9 2.6 0.4 0.1 0.1 3.1 18.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Data on normal episodes of care ending in 2007 using a 20% sample of 2007 data from the home health Datalink file.

Table 21--Percent Change in the Average Number of Visits by Therapy
Group for Third and Later Episodes of Care, 2007 and 2013
------------------------------------------------------------------------
Percent
change in
Therapy group visits from
2007 to
2013
------------------------------------------------------------------------
0-5........................................................ -19.01
6.......................................................... -8.38
7-9........................................................ -8.30
10......................................................... -11.75
11-13...................................................... -11.44
14-15...................................................... -11.28
16-17...................................................... -14.18
18-19...................................................... -12.72
------------------------------------------------------------------------

Comment: A commenter stated that the points for the case-mix
variables seem to be decreasing for the low therapy episodes and
increasing for the high therapy episodes, motivating agencies to
provide more therapy visits to boost reimbursement. The commenter
stated that the data used to determine the case-mix points was swayed
by the payment system which rewards high therapy utilization. Other
commenters stated that many diagnosis codes are losing case-mix points
and that there doesn't seem to be a reason behind the loss of points.
Another commenter implied that there doesn't seem to be a balance in
the shift in points and was concerned with the impact of the scoring
variables being eliminated and others decreasing or increasing points.
Another commenter stated that there is not sufficient detail to explain
the Agency's rationale for the large scale changes to the case-mix
point values in the proposed rule and questioned what message CMS is
sending to agencies based on the changes to the case-mix variable
table. The commenter stated that there is no longer an emphasis on
diabetes, heart failure, COPD, or depression, but that there seems to
be an emphasis on orthopedic and neurological diagnoses, particularly
when 14 or more therapy visits are ordered. A commenter stated that the
change in the case-mix points sends a message that there is little or
no benefit to home health agencies in caring for chronically ill
patients with common medical diagnoses unless those patients are
receiving 14 or more therapy visits and urged CMS to reconsider
adoption and implementation of the proposed case-mix point tables and
new thresholds until CMS has sought more input from clinicians and
agencies and has re-evaluated the messages the new case-mix table will
send to the home health community.
Response: We reiterate that the points for the case-mix variables
are driven by the utilization patterns observed in the CY 2013 claims
data. The changes to the weights are not surprising given the different
data used for the CY 2012 recalibration versus the data used for the CY
2015 recalibration. We used 2005 data to estimate the four equation
model for the CY 2012 recalibration and we used 2013 data to estimate
the four equation model for the CY 2015 recalibration. (The 2012
payment regression was based on a 2007 sample that was assigned to
severity levels based on the point values from a 4-equation model using
2005 data that eliminated certain hypertension codes). The different
point estimates across the two models indicate that the case-mix
variables have a different relationship to resource use in 2013
compared to 2005. A decrease in the number of points (for 2013 compared
to 2005) for a variable means that the variable is associated with less
resource use on average in 2013 compared to 2005. An increase in the
number of points for a variable means that the variable is associated
with more resource use on average in 2013 compared to 2005. Certain
variables did drop out of the 4-equation model in in the CY 2015
recalibration versus the CY 2012 recalibration. For many of those
variables, the CY 2012 recalibration estimated only a small number of
points associated with the variables and therefore those variables were
already on the verge of being dropped from the model in CY 2012. While
some variables did drop out of the model, the potential change in
points associated with those variables was not very large, so that
individually those variables had minimal impact on episodes' resource
use. Some of the variables that dropped out of the model experienced
increases in the number of episodes with the variable reported on OASIS
between 2005 and 2013. The increase in episodes reporting a particular
variable may have decreased the difference in resources for episodes
that coded the variable versus those that did not and, therefore, may
have caused the variable to become insignificant or to have minimal
impact on resource costs, leading to its elimination from the model.
When evaluating the points associated with each leg of the model,
it is important to examine the thresholds for each leg. For example,
the clinical thresholds described in the proposed rule have fewer
points associated with them for the 0 to 13 therapy visit episodes.
Therefore, while there may be fewer points associated with some of the
variables within the 0 to 13 therapy visit legs, there is also a lower
threshold for the clinical levels. In order to determine the
thresholds, we put episodes into five groups (early episodes, 0 to 13
therapy visits, early episodes, 14-19 therapy visits, late episodes, 0
to 13 therapy visits, late episodes, 14-19 therapy visits, and 20+
therapy visit episodes) for both the clinical and the functional
dimensions. We then attempt to divide the episodes within each group
into thirds in order to set the thresholds. Therefore, regardless of
the points, on average, the most resource-intensive episodes will be
placed in the highest clinical or functional level. It is also

[[Page 66070]]

worth noting that, with the CY 2015 recalibration, additional variables
received points in the estimation of the 4-equation model that did not
receive points in the CY 2012 recalibration. Again, the outcomes of the
models are guided by the data and reflect recent (2013) utilization
patterns. This approach increases payments for the HHRGs where
resources are being provided where they were not previously and
decreases payment for the HHRGs where resources are not being provided
where they were previously. The intent is to create payments that more
accurately reflect the costs that agencies incur.
Comment: A commenter also stated that this is the third year in a
row that the HH PPS has had different case-mix weights and that this
may be an indicator of uncertainty by CMS. Another commenter stated
that the recalibration of the weights is being recommended after having
just recently been changed the prior year and that there is no
consistency in the change.
Response: We would like to clarify that fundamentally we have not
changed the weights since CY 2012. We previously recalibrated the case-
mix weights in 2012 and did not change the weights in CY 2013. For CY
2014, while we lowered the case-mix weights to an average case-mix
weight of 1.0000, we did not adjust the weights relative to one
another. We instead decreased each case-mix weight by the same factor
(1.3464). In the CY 2015 proposed rule, we proposed to recalibrate the
case-mix weights with more current data, adjusting the weights relative
to one another. To the greatest extent possible, we are attempting to
use recent data to calibrate the payment models to ensure payments
accurately reflect current resource use in home health episodes.
Comment: A commenter found the data CMS is basing its proposals on
to be puzzling and mentioned that the payment system does not allow for
reporting of time devoted to patient care that is not visit time. The
commenter stated that dementia and brain disorders involve significant
time outside of the visit.
Response: Section 1861(m) of the Act defines home health services
as ``items and services furnished to an individual [. . .] provided on
a visiting basis in a place of residence used as such individual's home
. . .'' (emphasis added). Under certain circumstances, services may be
provided via a telecommunications system, but these services do not
substitute for in-person home health services and are not considered a
home health visit for purposes of home health eligibility or payment
(see section 1895(e)(1) of the Act). In addition, the commenter
provided no supporting data explaining why home health services for
patients suffering from dementia and brain disorders would require
reimbursement exceeding the typical case management/care coordination
functions that are inherent in managing patients in the home. We also
note that while the case-mix recalibration does not include time
outside of the visit, the base rate should capture other expenses
related to patient care, such as travel costs, etc. An assumption since
the original development of the HH PPS, supported by internal studies
of cost report data, has been that visit time is approximately
proportional to the total cost of caring for a patient during an
episode.
Comment: Commenters expressed concerns with the effects the
recalibrated weights will have when coupled with the rebasing
reductions. A commenter stated that the combination of the recalibrated
case-mix weights and the change in base rate brings about the
equivalent of about a three point reduction in payments. A commenter
stated that it makes sense to update case-mix points when statistical
analyses warrant it but that it seems that most adjustments in recent
years were done to reduce payments to home health agencies. A commenter
stated that the changes in the case-mix points and thresholds for
scoring the episode constitute a further reduction in payment beyond
the required reduction and recalibration of the case-mix weights for CY
2015.
Response: The CY 2015 case-mix recalibration is done in a budget
neutral manner. While we recalibrated the CY 2015 case-mix weights to
an average case-mix weight of 1.00, we also proposed an increase to the
base rate of 2.37 percent in order to ensure that there are no changes
in aggregate payments due to the recalibration. The weights are only
changing relative to one another and do not result in an overall
reduction in HH PPS payments due to the recalibration of the case-mix
weights.
Comment: A commenter stated that case-mix weights are continuing to
be recalibrated to 1.000 but that many payments to home health do not
result in the episodic payment including Partial Episode Payments,
payments for low utilization payment adjustment episodes, outliers, and
others.
Response: We believe the commenter is implying that the case-mix
recalibration is not budget neutral given that LUPA, outlier episodes,
etc. are not included in the case-mix weight recalibration. We note the
LUPA episodes are paid on a per-visit basis and are not paid using the
case-mix weights. Therefore, they were not included when performing the
recalibration. We note that all episodes, including partial episode
payment episodes and outlier episodes, are included when calculating
the budget neutrality factor in order to ensure that total payments
would be the same when comparing the CY 2015 weights to the CY 2014
weights. However, outliers are not included in the data when doing the
case-mix recalibration because outlier episodes contain utilization
patterns that are atypical. The outliers' utilization presumably
reflects unusually high patient need for services that is not easily
predictable in statistical data. In addition, due to the concentration
of outlier episodes in suspect billing areas, we question some of the
utilization data for outlier episodes. We would also like to note that
outlier episodes receive additional payment when the imputed cost
exceeds a certain threshold and therefore, receive additional payment
outside of the case-mix system.
Comment: A commenter stated that the R-squared value of the payment
regression model has increased from the 2012 payment regression model
even though variables were dropped from the four-equation model. The
commenter stated that less variables in the four-equation model should
weaken the R-squared value.
Response: We do note that while the R-squared value for the payment
regression increased for the CY 2015 payment regression model when
compared to the CY 2012 payment regression model, the R-squared value
for the CY 2015 four-equation model did decrease when compared to the
R-squared value for the CY 2012 four-equation model, from 0.462 to
0.427. However, we point out that for the CY 2015 four-equation model
and payment regression model, we used 2013 data. For the CY 2012 four-
equation model, we used 2005 data and for the CY 2012 payment
regression model, we used data from 2007. R-squared values will change
depending on what data are used and cannot be directly compared.
Comment: Commenters supported the idea of recalibrating the weights
with newer data but expressed concerns with the resulting proposed
weights. Commenters stated their concerns with the continued use of
therapy thresholds in the case-mix system. Commenters recommended that
the therapy thresholds be eliminated from the payment system and that
home health services be paid solely based on patient characteristics. A
commenter stated that

[[Page 66071]]

though CMS has made efforts to reduce payments for therapy episodes,
the incentives of the therapy thresholds, with more visits receiving
higher payments, still remain in effect. The commenter stated that the
adjustments to the case-mix weights would not be necessary if the
therapy thresholds were eliminated.
Response: We recognize the issues around the use of the therapy
thresholds and the use of therapy utilization in the payment system. We
are currently looking into findings of the home health study authorized
by section 3131(d) of the Affordable Care Act and payment reform
options, including alternate ways to explain the amount of therapy
resources without using therapy utilization variables. Further research
is needed to find alternatives that will compensate for some of the
loss of the explanatory power associated with the removal of the
therapy utilization variables.
Comment: Several commenters were concerned about the implications
for agencies of adjusting to several successive recalibrations.
Commenters said recalibrations cause instability for HHAs, with one
saying recalibrations were inconsistent with one another. A commenter
was concerned that multiple recalibrations make calculations with the
case mix weights useless as a comparative tool over time. This
commenter also cited problems with calculations from including therapy
utilization and by the constant annual revision to the various OASIS
items or diagnoses included/excluded.
Response: We note that other post-acute payment systems, such as
the inpatient rehabilitation facility PPS and acute inpatient PPS,
recalibrate their case-mix weights annually. The differences in the
recalibration results for the CY 2012 recalibration and the CY 2015
recalibration largely result from the six to eight year difference in
the data used. We expect future annual recalibrations to have less
significant changes in the case-mix points and values. With regard to
the use of therapy utilization in our methodology, as stated in our
response above, we are looking into alternate ways to explain the
amount of therapy resources. Since the 2008 refinements, there have
been no changes to the payment items on the OASIS. In addition, besides
last year's changes to the ICD-9-CM codes included into the case-mix
system (effective January 1, 2014 and therefore not reflected in the CY
2013 data used to recalibration the CY 2015 case-mix weights) and the
removal of the hypertension codes in 2012, we did not make significant
changes to the diagnoses included or excluded in the case-mix system.
We also note in 2013, changes in the rules for using the payment
diagnosis field were simulated and the simulations showed impacts in
payment of less than one percent.
Comment: A commenter stated that to the extent that CMS is pursuing
the adjustments to the weights for 2015, the agency should analyze the
payment-to-cost ratios for the proposed payment weights before and
after the manual adjustment, similar to the analysis conducted during
the CY 2012 recalibration. The commenter stated that this additional
analysis would allow CMS to assess whether these adjustments equalize
the financial incentives for therapy and non-therapy episodes. Another
commenter urged CMS to adjust the CY 2015 case-mix weights to ensure
appropriate use of therapy visits and move reimbursement for therapy-
based episodes towards actual costs incurred. Commenters recommended
that CMS conduct a thorough validation review of the proposed case-mix
weight recalibration and evaluate the potential impact on utilization,
spending, access to care, and other relevant matters. Other commenters
urged CMS to re-examine the case-mix recalibration and refine it to
control for variables that might skew outcomes and ensure that the end
result does not create rewards for high therapy resource use that may
be inappropriate. A commenter suggested that CMS revisit the case-mix
weight recalibration to accomplish its stated intention or
alternatively provide a detailed explanation how the recalibrated case-
mix weights are consistent with its intent. The commenter also stated
that there has been no testing to determine whether the adjustments
will achieve the desired outcomes. The commenter recommended that CMS
retain the current case-mix weights until an approach to recalibration
that actually achieves the desired outcomes can be developed and
tested. The commenter stated that the changes to the payment system
don't seem to have achieved the desired impact.
Response: We performed an analysis of the payment-to-cost ratio for
episodes with varying levels of therapy visits. This analysis used cost
report data to estimate episode cost and showed that the payment to
cost ratios across the varying levels of therapy visits for the
recalibrated weights were similar to the payment to cost ratios for the
current weights. The analysis also justified the need for the continued
adjustments (finalized in CY 2012) to be applied to the raw weights to
lower the case-mix weights for high therapy episodes. The payment-to-
cost ratios across the individual therapy visits were all relatively
similar to each other, with some exceptions in the tails of the
distribution, and indicated that there may not be a strong incentive to
provide unnecessary amounts of therapy visits. The goal of the
recalibration is to better align payment with current costs and we
believe the recalibration achieves this.
Comment: Commenters expressed their support for CMS' decision to
apply a full case-mix budget neutrality factor rather than a reduced
case-mix budget neutrality factor which would take into account nominal
case-mix growth. However, they expressed concern about the uncertainty
for providers in planning for projected rates in CY 2015 and beyond
given the possibility of case-mix reductions in the future. Commenters
urged CMS to closely collaborate with the industry and stakeholders to
ensure that the appropriate analysis is conducted in evaluating case-
mix growth before proposing case-mix reductions in the future. Another
commenter suggested that CMS perform a comprehensive study of
individual patient clinical records before asserting that case-mix
growth has occurred by anything other than necessary clinical care
being provided. Another commenter urged CMS to use their enforcement
authority to conduct targeted claims reviews and deny payment for
claims where the case-mix weight is not supported by the plan of care
rather than cut the national standardized episode rate for all
agencies. Yet another commenter stated that case-mix change should not
be measured using 1999 data as a baseline and that HHAs are providing
better care for a more needy clinical population. Other commenters
questioned the methodology used to determine real and nominal case-mix.
Response: While we appreciate the commenters' suggestion about the
clinical record review, we note that our resources are not sufficient
to conduct a review of patient records and/or claims on a scale that
would be required to counteract the broad-based uptrend in case-mix
weights; therefore, we cannot perform the review as suggested. However,
we note that the MACs, in conjunction with supplemental review
contractors, perform medical review of claims. When they perform
medical review, they review the plan of care and OASIS and make
adjustments to HHRGs if they deem that the documentation is not
sufficient to support what was billed by the agency. Furthermore, we
note that our statistical methods using available administrative data
are

[[Page 66072]]

feasible and sufficiently reliable to utilize for the purpose of case-
mix reductions.
With regard to the comments about patient severity, as stated in
the CY 2012 proposed rule, a detailed analysis of Medicare Expenditure
Panel Survey (MEPS) data (which is independent of our real case-mix
model) was performed to examine the severity of the Medicare home
health population. The trends in health status from 2000 to 2008 were
analyzed. The analysis showed a slight increase in the overall health
status of the Medicare home health population, and in particular, the
percent of home health Medicare beneficiaries experiencing ``extreme''
or ``quite a bit'' of work-limiting pain decreased substantially, from
56.6 percent in 2000 to 45.4 percent in 2008 (p = 0.039). While we
recognize that there are some limitations to this analysis, we conclude
that the results of this analysis provide no evidence of an increase in
patient severity from 2000 to 2008.
In addition, we would like to note that during the CY 2012
rulemaking, we incorporated HCC data, which is used by CMS to risk-
adjust payments to managed care organization in the Medicare program,
in our model to assess real case-mix growth. Our findings of real and
nominal case-mix growth, even when incorporating HCC data, were
consistent with past results. Most of the case-mix change was
identified as nominal case-mix change. We will continue to solicit
suggestions for other data that can be incorporated into our analysis
of real and nominal growth and solicit suggestions on possible ways to
improve our models. We plan to continue to monitor real and nominal
case-mix growth and may propose additional case-mix reductions as
necessary.
Comment: One commenter stated that CMS has adjusted payments in
2008 to 2013 based on an analysis of changes in coding not related to
changes in patient severity, but that CMS has not proposed a coding
adjustment for 2015. The commenter stated that given the history of
coding increases not attributable to severity, CMS should analyze the
nominal case-mix change in the reported average case-mix for more
recent years and implement additional payment reductions as warranted.
Response: We agree and we will continue to monitor nominal case-mix
growth and propose case-mix adjustments, as necessary. We also note
that annually recalibrating (and normalizing the weights to 1.00) may
minimize nominal case-mix growth in future years.
Comment: Another commenter stated that CMS should address and
eliminate fraudulent activities in a targeted manner that does not
burden the whole industry for the actions of a small number of bad
actors. The commenter stated that CMS should target bad actors rather
than continue to implement across the board reductions that could
reduce the number and quality of home health providers.
Response: For a variety of reasons, as we have noted in previous
regulations, we have not proposed targeted reductions for nominal case-
mix change. Many agencies have small patient populations, which would
make it practically impossible to reliably measure nominal case-mix
change at the agency level. Further, we believe changes and
improvements in coding practices have been widespread, making it
difficult to clearly categorize agencies into high and low coding-
change groups. As discussed in the CY 2012 final rule, when performing
an independent review of our case-mix measurement methodology, Dr.
David Grabowski and his team at Harvard University agreed with our
reasons for not proposing targeted reductions, stating their concerns
about the small sample size of many agencies and their findings of
significant nominal case-mix increases across different classes of
agencies.
We note that although we have stated in past regulations that a
targeted system would be administratively burdensome, the reasons we
have just presented go beyond administrative complexity. We do not
agree that agency-specific case-mix levels can precisely differentiate
agencies with inappropriate coding practices from other agencies that
are coding appropriately. System wide, case-mix levels have risen over
time while data on patient characteristics indicate little change in
patient severity over time. That is, the main problem is not the level
of case-mix reached over a period of time, but the amount of change in
the billed case-mix not attributable to underlying changes in actual
patient severity. We will continue to monitor nominal case-mix growth
and determine whether case-mix reductions are needed.
Comment: Commenters questioned why CMS has not expanded the
recalibration analysis to include additional variables that impact the
cost of home health services to Medicare beneficiaries, such as those
examined in the home health study and associated with low-income
beneficiaries, beneficiaries in medically underserved areas, and those
with varying levels of severity of illness. Commenters urged CMS to
incorporate findings from the access study into the case-mix system for
CY 2015. A commenter expressed disappointment that CMS continued to
rely on the current case-mix system rather than testing and
implementing new models. The commenter stated that the current case-mix
system and proposed adjustments have reached a level of complexity that
make it challenging to determine the accuracy of the proposed technical
refinements. The commenter stated that the inaccuracies in the current
system, resulting from the limitations of the current OASIS variables
and the use of average costs that do not represent the full costs of
treating more complex patients, continue to result in underpayment for
patients whose resource use and cost of care are not fully captured in
the case-mix weights. Another commenter suggested that CMS work with
the industry to develop the case-mix methodology.
Response: We are currently doing follow-on work to the home health
study to explore findings and recommendations from the home health
study on access to care for vulnerable populations. Under this
contract, we are also exploring payment reform options to better
capture costs associated with the various types of home health
patients. However, the project is in its preliminary stages and will
take some time to complete. We plan to provide updates on the follow on
study and payment reform work in future rulemaking and plan to consult
with stakeholders once further progress has been made.
Comment: While outside the scope of the rule, some commenters
provided suggestions for our payment reform work.
Response: We thank the commenter for their input. We will take
their comments into consideration for our payment reform work.
Final Decision: We are finalizing the points for the case-mix
variables, the revised thresholds for the clinical and functional
levels, and the case-mix weights for CY 2015 shown in the tables above.
We are also finalizing our proposal to recalibrate the case-mix weights
every year with more current data. We will continue to monitor case-mix
growth and may consider whether to propose nominal case-mix reductions
in future rulemaking.

[[Page 66073]]

D. CY 2015 Home Health Rate Update

1. CY 2015 Home Health Market Basket Update
Section 1895(b)(3)(B) of the Act requires that the standard
prospective payment amounts for CY 2015 be increased by a factor equal
to the applicable HH market basket update for those HHAs that submit
quality data as required by the Secretary. The home health market
basket percentage increase for CY 2015 is based on IHS Global Insight
Inc.'s (IGI) third quarter 2014 forecast with historical data through
the second quarter of 2014. The home health market basket percentage
increase for CY 2015 is 2.6 percent. The HH market basket was rebased
and revised in CY 2013. A detailed description of how we derive the HH
market basket is available in the CY 2013 HH PPS final rule (77 FR
67080, 67090).
For CY 2015, section 3401(e) of the Affordable Care Act, requires
that, in CY 2015 (and in subsequent calendar years), the market basket
percentage under the HH prospective payment system as described in
section 1895(b)(3)(B) of the Act be annually adjusted by changes in
economy-wide productivity. The statute defines the productivity
adjustment, described in section 1886(d)(3)(B)(xi)(II) of the Act, to
be equal to the 10-year moving average of change in annual economy-wide
private nonfarm business multifactor productivity (MFP) (as projected
by the Secretary for the 10-year period ending with the applicable
fiscal year, calendar year, cost reporting period, or other annual
period)(the ``MFP adjustment''). The Bureau of Labor Statistics (BLS)
is the agency that publishes the official measure of private nonfarm
business MFP. Please see https://www.bls.gov/mfp to obtain the BLS
historical published MFP data. We note that the proposed methodology
for calculating and applying the MFP adjustment to the HHA payment
update is similar to the methodology used in other Medicare provider
payment systems as required by section 3401 of the Affordable Care Act.
Please refer to the CY 2015 HH PPS proposed rule (79 FR 38384 through
38386) for more detailed information regarding the computation of the
MFP adjustment.
We did not receive any comments on our proposal related to the
computation of the statutorily-required productivity adjustment.
Therefore, we are finalizing our proposal to adjust the HH market
basket percentage increase by the MFP adjustment as discussed in the
proposed rule. The CY 2015 HH market basket percentage of 2.6 percent
will be reduced by the MFP adjustment (the 10-year moving average of
MFP for the period ending December 31, 2015) of 0.5 percent, which is
based on IGI's third quarter 2014 forecast. The resulting MFP-adjusted
HH market basket update is equal to 2.1 percent, or 2.6 percent less
0.5 percentage point.
Section 1895(b)(3)(B) of the Act requires that the home health
market basket percentage increase be decreased by 2 percentage points
for those HHAs that do not submit quality data as required by the
Secretary. For HHAs that do not submit the required quality data for CY
2015, the home health market basket update will be 0.1 percent (2.1
percent minus 2.0 percentage points).
2. Home Health Care Quality Reporting Program (HH QRP)
a. General Considerations Used for Selection of Quality Measures for
the HH QRP
The successful development of the Home Health Quality Reporting
Program (HH QRP) that promotes the delivery of high quality healthcare
services is one of our paramount concerns in administering the home
health program. We seek to adopt measures for the HH QRP that promote
more efficient and safer care. Our measure selection activities for the
HH QRP take into consideration input we receive from the Measure
Applications Partnership (MAP), convened by the National Quality Forum
(NQF) as part of a pre-rulemaking process that we have established and
are required to follow under section 1890A of the Act. The MAP is a
public-private partnership comprised of multi-stakeholder groups
convened for the primary purpose of providing input to CMS on the
selection of certain categories of quality and efficiency measures, as
required by section 1890A(a)(3) of the Act. By February 1st of each
year, the NQF must provide that input to CMS.
More details about the pre-rulemaking process can be found at
https://www.qualityforum.org/map.
MAP reports to view and download are available at https://www.qualityforum.org/Setting_Priorities/Partnership/MAP_Final_Reports.aspx.
Our measure development and selection activities for the HH QRP
take into account national priorities, such as those established by the
National Priorities Partnership (https://www.qualityforum.org/Setting_Priorities/NPP/National_Priorities_Partnership.aspx), the
Department of Health & Human Services (HHS) Strategic Plan (https://www.hhs.gov/secretary/about/priorities/priorities.html, the National
Quality Strategy (NQS) (https://www.ahrq.gov/workingforquality/reports.htm), and the CMS Quality Strategy (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.html). To the extent
practicable, we have sought to adopt measures that have been endorsed
by the national consensus organization under contract to endorse
standardized healthcare quality measures under section 1890 of the Act,
recommended by multi-stakeholder organizations, and developed with the
input of patients, providers, purchasers/payers, and other
stakeholders. At this time, the NQF is the national consensus
organization that is under contract with HHS to provide review and
endorsement of quality measures.
b. Background and Quality Reporting Requirements
Section 1895(b)(3)(B)(v)(II) of the Act states that ``each home
health agency shall submit to the Secretary such data that the
Secretary determines are appropriate for the measurement of health care
quality. Such data shall be submitted in a form and manner, and at a
time, specified by the Secretary for purposes of this clause.''
In addition, section 1895(b)(3)(B)(v)(I) of the Act states that
``for 2007 and each subsequent year, in the case of a home health
agency that does not submit data to the Secretary in accordance with
subclause (II) with respect to such a year, the home health market
basket percentage increase applicable under such clause for such year
shall be reduced by 2 percentage points.'' This requirement has been
codified in regulations at Sec. 484.225(i). HHAs that meet the quality
data reporting requirements are eligible for the full home health (HH)
market basket percentage increase. HHAs that do not meet the reporting
requirements are subject to a 2 percentage point reduction to the HH
market basket increase.
Section 1895(b)(3)(B)(v)(III) of the Act further states that
``[t]he Secretary shall establish procedures for making data submitted
under subclause (II) available to the public. Such procedures shall
ensure that a home health agency has the opportunity to review the data
that is to be made public with respect to the agency prior to such data
being made public.''
Medicare home health regulations, as codified at Sec. 484.250(a),
require HHAs to submit OASIS assessments and Home Health Care Consumer
Assessment of

[[Page 66074]]

Healthcare Providers and Systems Survey[supreg] (HHCAHPS) data to meet
the quality reporting requirements of section 1895(b)(3)(B)(v) of the
Act. We provide quality measure data to HHAs via the Certification and
Survey Provider Enhanced Reports (CASPER reports) which are available
on the CMS Health Care Quality Improvement System (QIES). A subset of
the HH quality measures has been publicly reported on the Home Health
Compare (HH Compare) Web site since 2003. The CY 2012 HH PPS final rule
(76 FR 68576), identifies the current HH QRP measures. The selected
measures that are made available to the public can be viewed on the HH
Compare Web site located at https://www.medicare.gov/HHCompare/Home.asp.
As stated in the CY 2012 and CY 2013 HH PPS final rules (76 FR 68575
and 77 FR 67093, respectively), we finalized that we will also use
measures derived from Medicare claims data to measure HH quality.
In the CY 2014 HH PPS final rule, we finalized a proposal to add
two claims-based measures to the HH QRP, and also stated that we would
begin reporting the data from these measures to HHAs beginning in CY
2014. These claims based measures are: (1) Rehospitalization during the
first 30 days of HH; and (2) Emergency Department Use without Hospital
Readmission during the first 30 days of HH. Also in this rule, we
finalized our proposal to reduce the number of process measures
reported on the CASPER reports by eliminating the stratification by
episode length for 9 process measures. While no timeframe was given for
the removal of these measures, we have scheduled their removal from the
CASPER folders in October 2014. In addition, five short stay measures
which had previously been reported on HH Compare were recently removed
from public reporting and replaced with non-stratified ``all episodes
of care'' versions of these measures.
Comment: One commenter urged CMS to only adopt quality measures
that have been endorsed by the Measure Applications Partnership (MAP)
and National Quality Forum (NQF).
Response: To the extent practicable, we seek to adopt measures that
have been endorsed by a consensus based entity, such as NQF. We also
intend to continue seeking input from the MAP as part of the pre-
rulemaking process.
Comment: One commenter asked CMS to comment on the timeframe for
the public release of the two ``post-acute 30 day measures.''
Response: We believe the commenter is requesting information about
the status of public reporting for the two HH claims based measures
titled ``Rehospitalization during the First 30 Days of HH'' and
``Emergency Department Use without Readmission during the First 30 Days
of HH'' that were finalized in the CY 2014 HH PPS final rule (78 FR
72256). In the CY 2014 HH PPS final rule, we stated that ``these
measures will be added to HH Compare for public reporting in CY 2015''
(78 FR 72298.).
c. OASIS Data Submission and OASIS Data for Annual Payment Update
(1) Regulatory Authority
The HH conditions of participation (CoPs) at Sec. 484.55(d)
require that the comprehensive assessment must be updated and revised
(including the administration of the OASIS) no less frequently than:
(1) The last 5 days of every 60 days beginning with the start of care
date, unless there is a beneficiary-elected transfer, significant
change in condition, or discharge and return to the same HHA during the
60-day episode; (2) within 48 hours of the patient's return to the home
from a hospital admission of 24-hours or more for any reason other than
diagnostic tests; and (3) at discharge.
It is important to note that to calculate quality measures from
OASIS data, there must be a complete quality episode, which requires
both a Start of Care (initial assessment) or Resumption of Care OASIS
assessment and a Transfer or Discharge OASIS assessment. Failure to
submit sufficient OASIS assessments to allow calculation of quality
measures, including transfer and discharge assessments, is a failure to
comply with the CoPs.
HHAs do not need to submit OASIS data for those patients who are
excluded from the OASIS submission requirements. As described in the
December 23, 2005 Medicare and Medicaid Programs: Reporting Outcome and
Assessment Information Set Data as Part of the Conditions of
Participation for Home Health Agencies final rule (70 FR 76202), we
define the exclusion as those patients:
Receiving only non-skilled services;
For whom neither Medicare nor Medicaid is paying for HH
care (patients receiving care under a Medicare or Medicaid Managed Care
Plan are not excluded from the OASIS reporting requirement);
Receiving pre- or post-partum services; or
Under the age of 18 years.
As set forth in the CY 2008 HH PPS final rule (72 FR 49863), HHAs
that become Medicare-certified on or after May 31 of the preceding year
are not subject to the OASIS quality reporting requirement nor any
payment penalty for quality reporting purposes for the following year.
For example, HHAs certified on or after May 31, 2013 are not subject to
the 2 percentage point reduction to their market basket update for CY
2014. These exclusions only affect quality reporting requirements and
do not affect the HHAs' reporting responsibilities as announced in the
December 23, 2005 final rule, ``Medicare and Medicaid Programs;
Reporting Outcome and Assessment Information Set Data as Part of the
Conditions of Participation for Home Health Agencies'' (70 FR 76202).
(2) HH QRP Requirements for CY 2015 Payment and Subsequent Years
In the CY 2014 HH PPS Final rule (78 FR 72297), we finalized a
proposal to consider OASIS assessments submitted by HHAs to CMS in
compliance with HH CoPs and Conditions for Payment for episodes
beginning on or after July 1, 2012, and before July 1, 2013 as
fulfilling one portion of the quality reporting requirement for CY
2014. In addition, we finalized a proposal to continue this pattern for
each subsequent year beyond CY 2014. OASIS assessments submitted for
episodes beginning on July 1st of the calendar year 2 years prior to
the calendar year of the Annual Payment Update (APU) effective date and
ending June 30th of the calendar year 1 year prior to the calendar year
of the APU effective date fulfill the OASIS portion of the HH QRP
requirement.
(3) Establishing a ``Pay-for-Reporting'' Performance Requirement for
Submission of OASIS Quality Data
Section 1895(b)(3)(B)(v)(I) of the Act states that ``for 2007 and
each subsequent year, in the case of a home health agency that does not
submit data to the Secretary in accordance with subclause (II) with
respect to such a year, the home health market basket percentage
increase applicable under such clause for such year shall be reduced by
2 percentage points.'' This ``pay-for-reporting'' requirement was
implemented on January 1, 2007. However, to date, the quantity of OASIS
assessments each HHA must submit to meet this requirement has never
been proposed and finalized through rulemaking or through the sub-
regulatory process. We believe that this matter should be addressed for
several reasons.
We believe that defining a more explicit performance requirement
for

[[Page 66075]]

the submission of OASIS data by HHAs would better meet section
5201(c)(2) of the Deficit Reduction Act of 2005 (DRA), which requires
that ``each home health agency shall submit to the Secretary such data
that the Secretary determines are appropriate for the measurement of
health care quality. Such data shall be submitted in a form and manner,
and at a time, specified by the Secretary for purposes of this
clause.''
In February 2012, the Department of Health & Human Services Office
of the Inspector General (OIG) performed a study to: (1) Determine the
extent to which HHAs met federal reporting requirements for the OASIS
data; (2) to determine the extent to which states met federal reporting
requirements for OASIS data; and (3) to determine the extent to which
the CMS was overseeing the accuracy and completeness of OASIS data
submitted by HHAs. In a report entitled, ``Limited Oversight of Home
Health Agency OASIS Data,''\24\ the OIG stated their finding that ``CMS
did not ensure the accuracy or completeness of OASIS data.'' The OIG
recommended that we ``identify all HHAs that failed to submit OASIS
data and apply the 2 percent payment reduction to them''. We believe
that establishing a performance requirement for submission of OASIS
quality data would be responsive to the recommendations of the OIG.
---------------------------------------------------------------------------

\24\ https://oig.hhs.gov/oei/reports/oei-01-10-00460.asp
---------------------------------------------------------------------------

In response to these requirements and the OIG report, we designed a
pay-for-reporting performance system model that could accurately
measure the level of an HHA's submission of OASIS data. The performance
system is based on the principle that each HHA is expected to submit a
minimum set of two ``matching'' assessments for each patient admitted
to their agency. These matching assessments together create what is
considered a ``quality episode of care'', consisting ideally of a Start
of Care (SOC) or Resumption of Care (ROC) assessment and a matching End
of Care (EOC) assessment. However, it was determined that there are
several scenarios that could meet this ``matching assessment
requirement'' of the new pay-for-reporting performance requirement.
These scenarios or ``quality assessments,'' are defined as assessments
that create a quality episode of care during the reporting period or
could create a quality episode if the reporting period were expanded to
an earlier reporting period or into the next reporting period.
Seven types of assessments submitted by an HHA fit this definition
of a quality assessment. These are:
A Start of Care (SOC) or Resumption of Care (ROC)
assessment that has a matching End of Care (EOC) assessment. EOC
assessments are assessments that are conducted at transfer to an
inpatient facility (with or without discharge), death, or discharge
from HH care. These two assessments (the SOC or ROC assessment and the
EOC assessment) create a regular quality episode of care and both count
as quality assessments.
A SOC/ROC assessment that could begin an episode of care,
but occurs in the last 60 days of the performance period. This is
labeled as a ``Late SOC/ROC'' quality assessment.
An EOC assessment that could end an episode of care that
began in the previous reporting period, (that is, an EOC that occurs in
the first 60 days of the performance period.) This is labeled as an
``Early EOC'' quality assessment.
A SOC/ROC assessment that is followed by one or more
follow-up assessments, the last of which occurs in the last 60 days of
the performance period. This is labeled as an ``SOC/ROC Pseudo
Episode'' quality assessment.
An EOC assessment is preceded by one or more follow-up
assessments, the last of which occurs in the first 60 days of the
performance period. This is labeled an ``EOC Pseudo Episode'' quality
assessment.
A SOC/ROC assessment that is part of a known one-visit
episode. This is labeled as a ``One-Visit episode'' quality assessment.
SOC, ROC, and EOC assessments that do not meet any of
these definitions are labeled as ``Non-Quality'' assessments.
Follow-up assessments (that is, where the M0100 Reason for
Assessment = `04' or `05') are considered ``Neutral'' assessments and
do not count toward or against the pay for reporting performance
requirement.
Compliance with this performance requirement can be measured
through the use of an uncomplicated mathematical formula. This pay for
reporting performance requirement metric has been titled as the
``Quality Assessments Only'' (QAO) formula because only those OASIS
assessments that contribute, or could contribute, to creating a quality
episode of care are included in the computation. The formula based on
this definition is as follows:
[GRAPHIC] [TIFF OMITTED] TR06NO14.011

Our ultimate goal is to require all HHAs to achieve a pay-for-
reporting performance requirement compliance rate of 90 percent or
more, as calculated using the QAO metric illustrated above. However, we
proposed to implement this performance requirement in an incremental
fashion over a 3 year period. We proposed to require each HHA to reach
a compliance rate of 70 percent or better during the first reporting
period \25\ that the new pay-for-reporting performance requirement is
implemented. We further proposed to increase the pay-for-reporting
performance requirement by 10 percent in the second reporting period,
and then by an additional 10 percent in the third reporting period
until a pay-for-reporting performance level of 90 percent is reached.
---------------------------------------------------------------------------

\25\ The term ``reporting period'' is defined as the submission
of OASIS assessments for episodes between July 1 (of the calendar
year two years prior to the calendar year of the APU effective date)
through the following June 30th (of the calendar year one year prior
to the calendar year of the APU effective date) each year.
---------------------------------------------------------------------------

To summarize, we proposed to implement the pay-for-reporting
performance requirement beginning with all episodes of care that occur
on or after July 1, 2015, in accordance with the following schedule:
For episodes beginning on or after July 1st, 2015 and
before June 30th, 2016, HHAs must score at least 70 percent on the QAO
metric of pay-for-reporting performance or be subject to a 2 percentage
point reduction to their market basket update for CY 2017.
For episodes beginning on or after July 1st, 2016 and
before June 30th, 2017, HHAs must score at least 80 percent on the QAO
metric of pay-for-reporting performance or be subject to a 2 percentage
point reduction to their market basket update for CY 2018.

[[Page 66076]]

For episodes beginning on or after July 1st, 2017, and
thereafter, and before June 30th, 2018 and thereafter, HHAs must score
at least 90 percent on the QAO metric of pay-for-reporting performance
or be subject to a 2 percentage point reduction to their market basket
update for CY 2019, and each subsequent year thereafter.
We solicited public comment on our proposal to implement the pay-
for-reporting performance requirement, as described previously, for the
HH QRP. We received the following comments in response to our proposal:
Comment: MedPAC submitted a comment in which they expressed full
support for the proposal to establish a minimum requirement for
submission of OASIS assessments. MedPAC stated that ``the requirement
for submission of OASIS data to receive a full payment update has been
in effect for many years, and agencies should have many years of
experience with the transmission of this data'' and suggested that CMS
consider phasing in the requirement at a faster rate, given the
familiarity of HHAs with these processes. MedPAC recommended raising
the threshold to 90 percent in the second year. Another commenter, who
stated support for this proposal, suggested increasing the compliance
thresholds to 75 percent, 85 percent and 95 percent (instead of the 70
percent, 80 percent and 90 percent threshold that were proposed).
Another commenter suggested that CMS should carefully monitor
compliance rates over the next two years to determine if a 90 percent
compliance rate is a realistic goal.
Several commenters supported our proposal to establish a minimum
requirement for submission of OASIS assessments for a variety of
reasons. One commenter stated a belief that this proposal demonstrates
CMS' efforts to obtain more complete patient data sets. Another
commenter expressed an opinion that the proposed OASIS minimum
reporting requirement is a program integrity reform and cost cutting
measure that is preferable to the across the board payment cuts
established by CMS in previous HH PPS rules.
Response: We thank MedPAC and other commenters who support our
proposal to establish a pay-for-reporting performance requirement for
the HH QRP. We agree that the requirements for OASIS reporting have
been in effect for many years. The HH CoPs which are codified at 42 CFR
484.55 and mandate use of the OASIS data set when evaluating adult non-
maternity patients receiving skilled services were established in 1999
(64 FR 3764 through 3784). OASIS reporting was first implemented on
July 19, 1999 and in 2007, OASIS reporting became mandatory for quality
reporting purposes under section 1895(b)(3)(B)(v)(I) of the Act. HHAs
have been required to submit OASIS data as a condition of payment of
their Medicare claims since 2010. As HHAs have been required to report
OASIS data for the past 15 years as a CoP in the Medicare program and
as a condition of payment of their Medicare claims for the past 4
years, our establishment of a minimum threshold for OASIS reporting
should not place any new or additional burden on HHAs.
Our ultimate goal is to require all HHAs to achieve a pay-for-
reporting performance requirement compliance rate of 90 percent or
more, as calculated using the QAO metric described and in this section.
In the proposed rule, we proposed to require each HHA to reach a
compliance rate of 70 percent or better during the first reporting
period that the new pay-for-reporting performance requirement is
implemented. We believe that use of the 70 percent standard is one that
is attainable by any HHA, whether it is a large corporate entity or
very small family run business. We had further proposed to increase the
performance requirement by 10 percent in the second reporting period,
and then by an additional 10 percent in the third reporting period
until a pay-for-reporting performance requirement of 90 percent is
reached, because we believed that this schedule would promote
successful performance by all HHAs.
However, after carefully considering the comments submitted, we
have reconsidered our proposal for implementation of a ``pay-for-
performance'' performance requirement over a 3 year period. MedPAC
suggested that CMS consider phasing in the OASIS reporting requirement
at a faster rate, given the familiarity that HHAs have with the OASIS
process. MedPAC recommended raising the threshold to 90 percent in the
second year.
We agree with MedPAC's contention that HHAs have been statutorily
required to report OASIS for a number of years and therefore should
have many years of experience with the collection of OASIS data and
transmission of this data to CMS. Given the length of time that HHAs
have been mandated to report OASIS data, we believe that HHAs will
adapt quickly to the implementation of the ``pay-for-reporting''
performance requirement, if phased in over a 2 year period. On the
other hand, the ``pay-for-reporting'' performance requirement is a new
reporting requirement that can have a significant financial impact any
HHA that is not able to meet the requirements.
We believe that it is best to proceed with the establishment of the
70 percent reporting requirement during the first reporting period
(that is, July 1, 2015 through June 30, 2016) and will finalize this
part of our proposal. However, we will not finalize our proposal to
increase the reporting requirement in 10 percent increments over a 2
year period until the maximum rate of 90 percent is reached. In
consideration of the recommendations made, we plan to monitor provider
performance under the ``pay-for-reporting'' performance requirement
during the time period of July 1, 2014 through June 30, 2015. We will
then use such information, as available, to make a determination about
what the ``pay-for-reporting'' performance requirement will be set at
in the 2nd and subsequent years. For example, we will review OASIS data
from a recent reporting period simulating the ``pay-for reporting''
performance 70 percent submission requirement to determine the
``hypothetical performance'' of each HHA ``as if'' the ``pay for
reporting'' performance requirement were in effect during the reporting
period preceding its implementation. We will provide a report to each
HHA of their ``hypothetical performance'' under the ``pay for
reporting'' performance requirement during the 2014-2015 ``pre-
implementation reporting period.'' We will also consider provider
performance during the first part of the first year of the ``pay for
reporting'' performance requirement as data are available in
determining the OASIS reporting requirement for the 2nd and subsequent
years.
Comment: A commenter expressed agreement with our proposal to
implement the OASIS minimum reporting requirements over a 3 year
period, but strongly recommended that such requirements be limited to
the OASIS data sets collected for Medicare PPS episodes only. This
commenter stated a belief that it would be too burdensome if HHAs were
required to complete OASIS assessments for patients on other payment
programs.
Response: Patients receiving care under a Medicare or Medicaid
managed care plan are not excluded from the OASIS reporting
requirements, and HHAs are required to submit OASIS assessments for
these patients. OASIS reporting is mandated for all Medicare
beneficiaries (under 42 CFR 484.250(a), 484.225(i), and 484.55). The HH
CoPs require that the Home Health Registered

[[Page 66077]]

Nurse (HH RN) or qualified therapist perform an initial assessment
within 48 hours of referral, within 48 hours of the patient's return
home, or on the physician-ordered start of care date. The HH RN or
qualified therapist must also complete a comprehensive assessment
within 5 days from the start of care. During these assessments, the HH
RN or qualified therapist must determine the patient's eligibility for
the Medicare HH benefit, including homebound status (42 CFR
484.55(a)(1) and 42 CFR 484.55 (b)). In addition, the requirement for
OASIS reporting on Medicare and Medicaid Managed Care patients was
established in a final rule titled ``Medicare and Medicaid Programs:
Reporting Outcome and Assessment Information Set Data as Part of the
Conditions of Participation for Home Health Agencies Final Rule'' dated
December 23, 2005 (70 FR 76202), which stated the following:

In the January 25, 1999, interim final rule with comment period
(64 FR 3749), we generally mandated that all HHAs participating in
Medicare and Medicaid (including managed care organizations
providing home health services to Medicare and Medicaid
beneficiaries) report their OASIS data to the database we
established within each State via electronic transmission. (76 FR
76200).

We do not believe that there is more burden associated with the
collection of OASIS assessment data for a Medicare Managed Care patient
than there is for a HH patient that receives traditional Medicare PPS
benefits. The requirements for the HH RN or qualified therapist to
perform an initial and comprehensive assessment and complete all
required OASIS assessments is the same for all Medicare patients
regardless of the type of Medicare benefits they receive. The
completion of these activities is a condition of payment of both
Medicare PPS and managed care claims.
Comment: A commenter, while in general agreement with the
establishment of a minimum reporting requirement for OASIS reporting,
expressed disagreement with implementation of this requirement on July
1, 2015. This commenter voiced the opinion that HHAs should first be
informed of their current OASIS submission compliance rate, so they
have an opportunity to improve, if below the 70 percent threshold.
Another commenter suggested that CMS provide each HHA with their
current OASIS reporting compliance rates to allow them to assess and
understand their compliance levels and create a benchmark against which
they can seek to improve over time. Another commenter requested that
CMS publish the current rate of HHA compliance with OASIS reporting and
recommended that the new compliance standard be based on incremental
increases from those rates.
Response: HHAs have been required to report OASIS data on 100
percent of their Medicare beneficiary patients for the past 15 years as
a CoP and as a condition of payment of their Medicare claims. Also,
since 2007, HHAs have been required to report OASIS quality data on 100
percent of their Medicare beneficiary patients in order to receive
their full yearly market basket update.
We do not agree that revealing sub-par provider compliance rates
will be helpful to providers as several commenters have requested. Our
establishment of the pay-for reporting performance requirement is a
means by which we can measure HHA compliance with the established and
long standing OASIS reporting requirements, while allowing HHAs a 2
year period to bring their performance up to the 90 percent compliance
level. As the OASIS reporting requirements have been in existence for
15 years, HHAs should already possess knowledge of these requirements
and know what they need to do to bring their agency into compliance.
Furthermore, as OASIS reporting on each Medicare beneficiary is a
requirement for payment of Medicare billing claims and also a HH CoP,
our establishment of a minimum threshold for OASIS reporting should not
place any new or additional burden on HHAs.
Comment: Several commenters, while in general agreement with this
proposal, requested that CMS provide clarification of the term
``submission'' and inquired whether this requires both submission and
acceptance of OASIS data by the state agency. Another commenter sought
assurance that HHAs will not be penalized for delayed acceptance of
OASIS data by state agency due to CMS server/IT issues.
Response: The pay-for reporting performance requirements will go
into effect on July 1, 2015. However, on January 1, 2015, the data
submission process for OASIS will convert from the current state-based
OASIS submission system to a new national OASIS submission system known
as the Assessment Submission and Processing (ASAP) System.\26\
Therefore, the commenter's question about whether successful submission
requires both submission and acceptance of OASIS data by the state
agency is moot because the state-based OASIS submission system will not
be in existence.
---------------------------------------------------------------------------

\26\ The state-based OASIS submission system is scheduled to
shut down permanently at 6:00 p.m. on December 26, 2014. Beginning
at 12:00 a.m. midnight on January 1, 2015, HHAs must begin to submit
their OASIS assessment via the national ASAP system. With the
implementation of the ASAP system, HHAs will no longer submit OASIS
assessment data to CMS via their state databases.
---------------------------------------------------------------------------

On July 1, 2015, when the pay-for reporting performance requirement
of 70 percent goes into effect, providers will be required to submit
their OASIS assessment data into the ASAP system. Successful submission
of an OASIS assessment will consist of the submission of the data into
the ASAP system with a receipt of no fatal error messages. Error
messages received during submission can be an indication of a problem
that occurred during the submission process and could also be an
indication that the OASIS assessment was rejected. Successful
submission can be verified by ascertaining that the submitted
assessment data resides in the national database after the assessment
has met all of the quality standards for completeness and accuracy
during the submission process.
Should one or more OASIS assessments submitted by a HHA be rejected
due to an IT/servers issue cause by CMS, we may, at our discretion,
excuse the non-submission of OASIS data. We anticipate that such a
scenario would rarely, if ever, occur. In the event that a HHA believes
they were unable to submit OASIS assessments due to an IT/server issue
on the part of CMS, the HHA should be prepared to provide any
documentation or proof available which demonstrates that no fault on
their part contributed to the failure of the OASIS records to transmit
to CMS.
Comment: Several commenters suggested that CMS provide
comprehensive education on the new OASIS minimum reporting requirements
for at least 6 months before it is effective. One commenter stated a
belief that provider education is especially necessary since the
failure to meet the submission threshold would result in a 2 percent
reduction in payment for an entire calendar year.
Response: We agree that educating HH providers about the new OASIS
data submission requirements is very important and necessary. The
initial performance period for the pay-for-reporting performance
requirement will consist of July 1, 2015 through June 30, 2016. Prior
to and during this performance period, we will schedule multiple Open
Door Forums and webinars to educate HHA personnel about the pay-for-
reporting performance requirement program and the pay-for-

[[Page 66078]]

reporting performance QAO metric. Additionally, OASIS Education
Coordinators (OECs) will be trained to provide state-level instruction
on this program and metric. We have already posted a report which
provides a detailed explanation of the methodology for this pay-for-
reporting QAO methodology. To view this report, go to: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Home-Health-Quality-Reporting-Requirements.html. Training announcements and additional educational
information related to the pay-for-reporting Performance Requirement
will be provided in the near future on the HH Quality Initiatives Web
page (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/).
Comment: Another commenter expressed an opinion that the terms of
our proposed ``pay-for reporting performance requirement'' reporting
are not clear. This commenter states the opinion that the definitions
of both the numerator and the denominator in the proposed ratio are not
clear.
Response: We have posted a technical report which provides a
detailed explanation of the methodology used for the pay-for-reporting
QAO methodology. This report provides a detailed definition of both the
numerator and denominator of the QAO metric, and also addresses the
definition of quality vs. non quality assessments. In addition, this
report provides an extensive analysis of the pay-for reporting
methodology using 2012-2013 OASIS assessment data. To view this report,
go to: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Pay-for-Reporting-Quality-Assessments-Only-Methodology.pdf.
Comment: A commenter believes that it is not necessary for CMS to
establish a minimum threshold for the submission of OASIS quality data
because state surveyors have access to the OASIS data and, therefore,
have ways to ensure HHAs are in compliance with OASIS data submission
requirements.
Response: We respectfully disagree with this commenter. State
surveyors would not be able to ensure compliance with the OASIS data
submission requirements for several reasons. First, state surveyors
have limited access to the OASIS data. Second, state surveyors do not
have access to the claims/billing information that is necessary to
determine if complete quality episodes have been submitted for each
patient. Third, compliance with OASIS quality reporting requirements
must be assessed on an annual basis in order to determine whether an
HHA will receive their full market basket update or the 2 percentage
point reduction for non-compliance. Therefore, use of state surveyors
to perform this task is not possible.
Comment: A commenter recommended that CMS provide HHAs with a 30-
day period in which to review CMS's assessment of their compliance and
submit corrections if necessary.
Response: Such a process has been in place for the HH QRP for some
time. This process is referred to as the ``reconsideration process.''
The OASIS data collection period runs from July 1st each year to
June 30th of the following year. At the conclusion of each reporting
period, we will assess the type and amount of OASIS data submitted by
each HHA during the reporting period to determine whether each provider
met the quality reporting requirements. HHAs that do not meet the
requirements for that reporting period will be sent a ``notice of non-
compliance'' letter by their Medicare Administrative Contractor (MAC).
A HHA will have 30 days from the date of the ``notice of non-
compliance'' letter to file a request for reconsideration to us. The
HHA must tell us why they think the finding of non-compliance was
incorrect and provide any documentation that proves they did meet the
reporting requirements for that reporting period.
The reconsideration process can also serve to provide notice to
HHAs who fall below the pay-for-reporting performance requirement for a
given reporting period of their OASIS compliance score for the
reporting period. The HHA will then have 30 days to submit a request
for reconsideration if they disagree with the compliance score provided
by us. The HHA will also have the opportunity to submit evidence on
their behalf of a higher compliance score.
Comment: A commenter suggested that CMS should include an exemption
from the OASIS minimum reporting requirements for small agencies
similar to that given with the HH-CAHPS requirements.
Response: Small HHAs are exempt from reporting HHCAHPS for several
reasons. First, the data is not collected using OASIS, but is instead
collected by the HHCAHPS, which is a non-payment related data
collection instrument. Second, HHCAHPS data are collected for the
purpose for quality monitoring. If data were collected from very small
HHAs, there is a high probability that protected patient information or
confidential information could be identified simply because of the
small number of responses. Therefore, the granting of an exemption to
small HHAs is done to protect the integrity of the data.
However, the reporting of OASIS assessment data on each patient by
HHAs is mandated by section 1895(b)(3)(B)(v)(II) of the Act. This
statute required that ``each home health agency shall submit to the
Secretary such data that the Secretary determines are appropriate for
the measurement of health care quality. Such data shall be submitted in
a form and manner, and at a time, specified by the Secretary for
purposes of this clause.'' Section 1895(b)(3)(B)(v)(I) of the Act
states that ``for 2007 and each subsequent year, in the case of a home
health agency that does not submit data to the Secretary in accordance
with sub clause (II) with respect to such a year, the home health
market basket percentage increase applicable under such clause for such
year shall be reduced by 2 percentage points.''
None of the statutes or Medicare regulations related to OASIS
reporting exempt small HHAs from the OASIS reporting requirements. In
fact, we would not be able to provide such an exemption, as submission
of OASIS assessments is a condition of payment and condition of
participation in the Medicare program. Any HHA (regardless of size)
that wants to bill for HH care of a Medicare patient must submit the
proper OASIS assessments in order to file valid claims. Also, any HHA
(regardless of size) that wants to participate in the Medicare program,
must submit the required type and amount of OASIS assessments for their
Medicare patients.
Comment: One commenter, though in agreement with the timeframes and
the minimum scores proposed by CMS, expressed a belief that CMS should
establish a disaster/exceptional circumstances policy to address
situations beyond the control of the HHA that could result in the
inability to submit OASIS data in a timely manner. This commenter noted
that such a policy has been established in other post-acute care
settings.
Response: We thank this commenter for their support of our proposal
to establish a pay-for-reporting performance requirement. However, the
commenter's suggestion that CMS establish an exceptional circumstances/
disaster waiver policy for the HH QRP is outside the scope of the
proposals that made in the proposed rule and

[[Page 66079]]

therefore, we are unable to comment on this suggestion. We will however
take this suggestion under advisement.
Comment: One commenter expressed concern that the proposal to
establish a ``pay-for-reporting'' performance requirement for OASIS
reporting is actually based on a ``pay for performance'' model.
Response: The ``pay-for-reporting performance requirement''
discussed above is not a pay-for-performance model. This performance
requirement simply sets a standard for the type and minimum number of
OASIS assessments that each HHA must submit during a 12 month reporting
period. If a HHA submits the required number of OASIS assessments
during the 12 month reporting period, they will receive their full
market basket update for the following calendar year.
Final Decision: After consideration of the public comments
received, we are adopting as final, our proposal to establish a pay-
for-reporting performance requirement, with the modifications stated
below:
For episodes beginning on or after July 1st, 2015 and
before June 30th, 2016, HHAs must score at least 70 percent on the QAO
metric of pay-for-reporting performance requirement or be subject to a
2 percentage point reduction to their market basket update for CY 2017.
We defer for now from setting a minimum OASIS reporting
requirement for the 2nd and subsequent years of the OASIS ``pay-for-
reporting'' performance requirement program. However, we will consider
increasing the requirement in subsequent years. We anticipate rates of
at least 80 percent or higher, not exceed 90 percent, in years 2 and 3.
d. Updates to HH QRP Measures Which Are Made as a Result of Review by
the NQF Process
In the proposed rule, we noted that section 1895(b)(3)(B)(v)(II) of
the Act generally requires the Secretary to adopt measures that have
been endorsed by the entity with a contract under section 1890(a) of
the Act. This contract is currently held by the NQF. The NQF is a
voluntary consensus standard-setting organization with a diverse
representation of consumer, purchaser, provider, academic, clinical,
and other health care stakeholder organizations. The NQF was
established to standardize health care quality measurement and
reporting through its consensus development process.\27\
---------------------------------------------------------------------------

\27\ For more information about the NQF Consensus Development
Process, please visit the NQF Web site using the following link:
https://www.qualityforum.org/Measuring_Performance/Consensus_Development_Process.aspx.
---------------------------------------------------------------------------

The NQF undertakes to: (1) Review new quality measures and national
consensus standards for measuring and publicly reporting on
performance; (2) provide for annual measure maintenance updates to be
submitted by the measure steward for endorsed quality measures; (3)
provide for measure maintenance endorsement on a 3-year cycle; (4)
conduct a required follow-up review of measures with time limited
endorsement for consideration of full endorsement; and (5) conduct ad
hoc reviews of endorsed quality measures, practices, consensus
standards, or events when there is adequate justification for a review.
In the normal course of measure maintenance, the NQF solicits
information from measure stewards for annual reviews to review measures
for continued endorsement in a specific 3-year cycle. In this measure
maintenance process, the measure steward is responsible for updating
and maintaining the currency and relevance of the measure and for
confirming existing specifications to the NQF on an annual basis. As
part of the ad hoc review process, the ad hoc review requester and the
measure steward are responsible for submitting evidence for review by a
NQF Technical Expert panel which, in turn, provides input to the
Consensus Standards Approval Committee which then makes a decision on
endorsement status and/or specification changes for the measure,
practice, or event.
Through the NQF's measure maintenance process, the NQF endorsed
measures are sometimes updated to incorporate changes that we believe
do not substantially change the nature of the measure. With respect to
what constitutes a substantive versus a non-substantive change, we
expect to make this determination on a measure-by-measure basis.
Examples of such non-substantive changes might include updated
diagnosis or procedure codes, medication updates for categories of
medications, broadening of age ranges, and changes to exclusions for a
measure. We believe that non-substantive changes may include updates to
measures based upon changes to guidelines upon which the measures are
based. These types of maintenance changes are distinct from more
substantive changes to measures that result in what can be considered
new or different measures, and that they do not trigger the same agency
obligations under the Administrative Procedure Act.
We proposed that, in the event that the NQF makes updates to an
endorsed measure that we have adopted for the HH QRP in a manner that
we consider to not substantially change the nature of the measure, we
will use a sub-regulatory process to incorporate those updates to the
measure specifications that apply to the program. Specifically, we
stated that we would revise the information that is posted on the CMS
Home Health Quality Initiatives Web site at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/HHQIQualityMeasures.html so that it clearly
identifies the updates and provides links to where additional
information on the updates can be found. We also stated that we would
refer HHAs to the NQF Web site for the most up-to date information
about the quality measures (https://www.qualityforum.org/). In addition,
we stated that we would provide sufficient lead time for HHAs to
implement the changes where changes to the data collection systems
would be necessary.
We further proposed to use the traditional ``notice and comment''
rulemaking process to adopt changes to measures that we consider to
substantially change the nature of the measure. Examples of changes
that we might consider to be substantive would be those in which the
changes are so significant that the measure is no longer the same
measure, or when a standard of performance assessed by a measure
becomes more stringent, such as changes in acceptable timing of
medication, procedure/process, test administration, or expansion of the
measure to a new setting. We believed that our proposal adequately
balances our need to incorporate NQF updates to NQF endorsed measures
used in the HH QRP in the most expeditious manner possible, while
preserving the public's ability to comment on updates to measures that
so fundamentally change an endorsed measure that it is no longer the
same measure that we originally adopted.
We noted that a similar policy was adopted for the Hospital IQR
Program, the PPS-Exempt Cancer Hospital (PCH) Quality Reporting
Program, the Long-Term Care Hospital Quality Reporting (LTCHQR)
Program, the Inpatient Rehabilitation Facility Quality Reporting
Program (IRF QRP) and the Inpatient Psychiatric Facility (IPF) Quality
Reporting Program.
We invited public comment on our proposal to adopt a policy in
which NQF changes to a measure that are non-substantive in nature will
be adopted using a sub-regulatory process and NQF

[[Page 66080]]

changes that are substantive in nature will be adopted through the
rulemaking process. We received the following public comments in
response to this proposal:
Comment: One commenter was opposed to our proposal to use sub-
regulatory guidance to incorporate NQF updates to previously endorsed
measures unless NQF itself, in communication accompanying such updates,
affirms that such updates do not substantially change the nature of the
measure.
Response: We believe it unlikely that NQF will undertake to make a
determination as to whether a change to a measure is substantive or
non-substantive. This is a policy determination that NQF is likely to
leave to the discretion of the measure steward. In the event that a
measure that has been previously adopted for use in the HH QRP is
updated in a manner that we determine to be non-substantive in nature,
we will ensure that stakeholders are fully informed about these changes
and that they have been afforded adequate lead time to make any
necessary changes. The NQF process requires an ad-hoc review of any
measures that undergo substantive changes, and any party may request
such an ad hoc review. If stakeholders believe a change to measures is
substantive, they are encouraged to participate in the NQF process.
Comment: Several commenters expressed a concern that the definition
of what changes are considered to substantive and what changes are non-
substantive is not clear.
Response: As noted above, with respect to what constitutes a
substantive versus a non-substantive change, we expect to make this
determination on a measure-by-measure basis. Examples of such non-
substantive changes might include updated diagnosis or procedure codes,
medication updates for categories of medications, broadening of age
ranges, and changes to exclusions for a measure. We believe that non-
substantive changes may include updates to measures based upon changes
to guidelines upon which the measures are based. These types of
maintenance changes are distinct from more substantive changes to
measures that result in what can be considered new or different
measures, and that they do not trigger the same agency obligations
under the Administrative Procedure Act.
Comment: One commenter expressed the opinion that CMS should
develop a more comprehensive list of substantive and non-substantive
change in a measure, and further suggested that stakeholders should be
given the opportunity to submit comments on the list for CMS to
consider.
Response: We appreciate the commenters request for a more
comprehensive list of substantive and non- substantive change in a
measure, and the opportunity to submit comments on such lists. However,
as noted above, we believe that our proposal adequately balances our
need to incorporate NQF updates to NQF endorsed measures used in the HH
QRP in the most expeditious manner possible, while preserving the
public's ability to comment on updates to measures that so
fundamentally change an endorsed measure that it is no longer the same
measure that we originally adopted. We noted that a similar policy was
adopted for the Hospital Inpatient Quality Reporting (IQR) Program, the
PPS-Exempt Cancer Hospital (PCH) Quality Reporting Program, the Long-
Term Care Hospital Quality Reporting (LTCHQR) Program, the Inpatient
Rehabilitation Facility Quality Reporting Program (IRF QRP) and the
Inpatient Psychiatric Facility (IPF) Quality Reporting Program.
Comment: A commenter expressed concern that most HH providers are
not aware of the NQF Consensus Development process, and therefore may
not have the opportunity to comment on changes to measures.
Response: The NQF regularly maintains its endorsed measures through
annual and triennial reviews, which may result in updates to the NQF-
endorsed measures. HHAs can go to the NQF Web page for information
about the measure endorsement process. The NQF process is open to the
public and transparent and incorporates an opportunity for public
comment and engagement in the measure maintenance process.
In the event that any measure that has been previously adopted for
use in the HH QRP is updated through the NQF process, we will ensure
that stakeholders are fully informed about these changes and that they
have been afforded adequate lead time to make any necessary changes.
Some of the methods that we will use to keep our stakeholders informed
include: (1) Posting of information on the HH Quality Initiatives Web
page; (2) holding special open door forums; (3) posting information in
the CMS weekly E-News publication; and (4) responding to provider
questions. While we expect to provide notice to stakeholders when we
intend to seek NQF's review of measures, the NQF process also
incorporates an opportunity for public comment and engagement in the
measure maintenance process.
Comment: Another commenter recommended that CMS notify HH providers
when NQF, in their Consensus Development Process, is asking for input
on NQF-endorsed measures used by HHAs, in order to give them an
opportunity to comment on a change in the measure.
Response: We anticipate that in most cases such changes will occur,
not during the measure development process, but after a measure has
already been endorsed by NQF and has been adopted for use in the HH
QRP. Changes to adopted measures could take place during yearly measure
maintenance or during the 3 year measure review process.
We acknowledge that the NQF post-endorsement reviews may provide
limited opportunity for provider engagement in the process. Therefore,
we will make every effort to keep stakeholders informed about reviews
to HH quality measures. Some of the methods that we will use to keep
our stakeholders informed include: (1) Posting of information on the HH
Quality Initiatives Web page; (2) holding special open door forums; (3)
posting information in the CMS weekly E-News publication; and (4)
responding to provider questions.
Comment: One commenter expressed the concern about whether changes
labeled as non-substantive changes are truly ``non-substantive''. This
commenter proposed that CMS convene a panel of HH experts, drawn from
individuals representing various regions of the country and types of
agencies (urban, rural, profit, non-profit, governmental, etc.) with
experience in the industry, to offer their opinion on whether changes
to a measure are truly ``non-substantive'' in nature. The commenter
further suggested that the panel be allowed to consider the changes for
``two cycles of consideration'' and if the panel supports the changes,
then the sub-regulatory could be used.
Response: In the proposed rule, we proposed to establish a policy
that ``in the event that the NQF makes updates to an endorsed measure
that we have adopted for the HH QRP in a manner that we consider to not
substantially change the nature of the measure, we will use a sub-
regulatory process to incorporate those updates to the measure
specifications that apply to the program.'' It is our intent that this
policy apply to existing NQF-endorsed quality measures that have
already been adopted for use in the HH QRP. These measures have
undergone the measure

[[Page 66081]]

development and endorsement process which typically includes multiple
opportunities for input from stakeholders. Examples of stakeholder
involvement include, but are not limited to: (1) Expert opinions
obtained from a technical expert panel consisting of experts drawn from
the HH community, (2) public comments solicited during the measure
development process, and (3) multiple opportunities to provide input
during the NQF endorsement process. HHAs will have multiple
opportunities to become familiar with and provide their input related
to the existing HH quality measures by the time they come up for the
NQF one year measure maintenance review or the 3 year re-endorsement
review.
Because the NQF process is open and transparent and readily
available to HHAs, they can learn of possible changes existing HH
quality measure as a result of the NQF process and provide their input
should they choose to do so. Furthermore, the NQF process provides for
a comprehensive and in-depth review of all quality measures under
review (including changes to these measures) by a highly qualified
panel of experts in the field of home health care. For these reasons,
we do not believe it is necessary to convene another panel of home
health experts, as suggested by this commenter, to seek an opinion on
whether changes to a measure are truly ``non-substantive'' in nature.
This commenter further suggested that the expert panel be allowed
to consider the changes for ``two cycles of consideration'' and if the
panel supports the changes, then the sub-regulatory process should be
used. It is not clear how this commenter defines ``two cycles of
consideration'', however, it is not feasible for CMS to allow a
decision regarding changes to an existing quality measure to go
unresolved for a prolonged period of time. It is necessary for CMS to
immediately assess any changes made to existing quality measures to
determine if changes to the data collection process, data collection
instrument, or technical specifications must be made. In addition CMS
must determine if provider training or educational materials are
required.
Final Decision: After consideration of the public comments we
received, we are adopting final a policy to: (1) Utilize a sub-
regulatory process to incorporate updates to the HH QRP quality
measures that are not substantive in nature; and (2) continue use of
the rulemaking process to adopt changes to measures that we consider to
be substantive in nature.
e. Home Health Care CAHPS[supreg] Survey (HHCAHPS)
In the CY 2014 HH PPS final rule (78 FR 72294), we stated that the
HH quality measures reporting requirements for Medicare-certified
agencies includes the Home Health Care CAHPS[supreg] (HHCAHPS) Survey
for the CY 2014 APU. We are continuing to maintain the stated HHCAHPS
data requirements for CY 2015 that have been set out in CY 2014 and in
previous rules. We note that home health agencies and HHCAHPS survey
vendors sometimes refer to the Home Health Care CAHPS[supreg] Survey as
``HH-CAHPS'' rather than ``HHCAHPS''.
(1) Background and Description of HHCAHPS
As part of the HHS Transparency Initiative, we implemented a
process to measure and publicly report patient experiences with home
health care, using a survey developed by the Agency for Healthcare
Research and Quality's (AHRQ's) Consumer Assessment of Healthcare
Providers and Systems (CAHPS[supreg]) program and endorsed by the NQF
in March 2009 (NQF Number 0517). The HHCAHPS survey is part of a family
of CAHPS[supreg] surveys that asks patients to report on and rate their
experiences with health care. The Home Health Care CAHPS[supreg]
(HHCAHPS) survey presents home health patients with a set of
standardized questions about their home health care providers and about
the quality of their home health care.
Prior to this survey, there was no national standard for collecting
information about patient experiences that will enable valid
comparisons across all HHAs. The history and development process for
HHCAHPS has been described in previous rules and is also available on
the official HHCAHPS Web site at https://homehealthcahps.org and in the
annually-updated HHCAHPS Protocols and Guidelines Manual, which is
downloadable from https://homehealthcahps.org.
For public reporting purposes, we report five measures from the
HHCAHPS Survey--three composite measures and two global ratings of care
that are derived from the questions on the HHCAHPS survey. The publicly
reported data are adjusted for differences in patient mix across HHAs.
We update the HHCAHPS data on Home Health Compare on www.medicare.gov
quarterly. Each HHCAHPS composite measure consists of four or more
individual survey items regarding one of the following related topics:
Patient care (Q9, Q16, Q19, and Q24);
Communications between providers and patients (Q2, Q15,
Q17, Q18, Q22, and Q23); and
Specific care issues on medications, home safety, and pain
(Q3, Q4, Q5, Q10, Q12, Q13, and Q14).
The two global ratings are the overall rating of care given by the
HHA's care providers (Q20), and the patient's willingness to recommend
the HHA to family and friends (Q25).
The HHCAHPS survey is currently available in English, Spanish,
Chinese, Russian, and Vietnamese. The OMB number on these surveys is
the same (0938-1066). All of these surveys are on the Home Health Care
CAHPS[supreg] Web site, https://homehealthcahps.org. We continue to
consider additional language translations of the HHCAHPS in response to
the needs of the home health patient population.
All of the requirements about home health patient eligibility for
the HHCAHPS survey and conversely, which home health patients are
ineligible for the HHCAHPS survey are delineated and detailed in the
HHCAHPS Protocols and Guidelines Manual, which is downloadable at
https://homehealthcahps.org. Home health patients are eligible for
HHCAHPS if they received at least two skilled home health visits in the
past 2 months, which are paid for by Medicare or Medicaid.
Home health patients are ineligible for inclusion in HHCAHPS
surveys if one of these conditions pertains to them:
Are under the age of 18;
Are deceased prior to the date the sample is pulled;
Receive hospice care;
Receive routine maternity care only;
Are not considered survey eligible because the state in
which the patient lives restricts release of patient information for a
specific condition or illness that the patient has; or
No Publicity patients, defined as patients who on their
own initiative at their first encounter with the HHAs make it very
clear that no one outside of the agencies can be advised of their
patient status, and no one outside of the HHAs can contact them for any
reason.
We stated in previous rules that Medicare-certified HHAs are
required to contract with an approved HHCAHPS survey vendor. This
requirement continues, and Medicare-certified agencies also must
provide on a monthly basis a list of their patients served to their
respective HHCAHPS survey vendors. Agencies are not allowed to
influence at all how their patients respond to the HHCAHPS survey.

[[Page 66082]]

As previously required, HHCAHPS survey vendors are required to
attend introductory and all update trainings conducted by CMS and the
HHCAHPS Survey Coordination Team, as well as to pass a post-training
certification test. We have approximately 30 approved HHCAHPS survey
vendors. The list of approved HHCAHPS survey vendors is available at
https://homehealthcahps.org.
(2) HHCAHPS Oversight Activities
We stated in prior final rules that all approved HHCAHPS survey
vendors are required to participate in HHCAHPS oversight activities to
ensure compliance with HHCAHPS protocols, guidelines, and survey
requirements. The purpose of the oversight activities is to ensure that
approved HHCAHPS survey vendors follow the HHCAHPS Protocols and
Guidelines Manual. As stated in previous HH PPS final rules, all
HHCAHPS approved survey vendors must develop a Quality Assurance Plan
(QAP) for survey administration in accordance with the HHCAHPS
Protocols and Guidelines Manual. An HHCAHPS survey vendor's first QAP
must be submitted within 6 weeks of the data submission deadline date
after the vendor's first quarterly data submission. The QAP must be
updated and submitted annually thereafter and at any time that changes
occur in staff or vendor capabilities or systems. A model QAP is
included in the HHCAHPS Protocols and Guidelines Manual. The QAP must
include the following:
Organizational Background and Staff Experience;
Work Plan;
Sampling Plan;
Survey Implementation Plan;
Data Security, Confidentiality and Privacy Plan; and
Questionnaire Attachments
As part of the oversight activities, the HHCAHPS Survey
Coordination Team conducts on-site visits to all approved HHCAHPS
survey vendors. The purpose of the site visits is to allow the HHCAHPS
Survey Coordination Team to observe the entire HHCAHPS Survey
implementation process, from the sampling stage through file
preparation and submission, as well as to assess data security and
storage. The HHCAHPS Survey Coordination Team reviews the HHCAHPS
survey vendor's survey systems, and assesses administration protocols
based on the HHCAHPS Protocols and Guidelines Manual posted at https://homehealthcahps.org. The systems and program site visit review
includes, but is not limited to the following:
Survey management and data systems;
Printing and mailing materials and facilities;
Telephone call center facilities;
Data receipt, entry and storage facilities; and
Written documentation of survey processes.
After the site visits, HHCAHPS survey vendors are given a defined
time period in which to correct any identified issues and provide
follow-up documentation of corrections for review. HHCAHPS survey
vendors are subject to follow-up site visits on an as-needed basis.
In the CY 2013 HH PPS final rule (77 FR 67094, 67164), we codified
the current guideline that all approved HHCAHPS survey vendors fully
comply with all HHCAHPS oversight activities. We included this survey
requirement at Sec. 484.250(c)(3).
(3) HHCAHPS Requirements for the CY 2015 APU
In the CY 2014 HH PPS final rule (78 FR 72294), we stated that for
the CY 2015 APU, we require continued monthly HHCAHPS data collection
and reporting for 4 quarters. The data collection period for CY 2015
APU includes the second quarter 2013 through the first quarter 2014
(the months of April 2013 through March 2014). Although these dates are
past, we included them in the proposed rule so that HHAs were reminded
of what months constituted the requirements for the CY 2015 APU. HHAs
were required to submit their HHCAHPS data files to the HHCAHPS Data
Center for the HHCAHPS data from the first quarter of 2014 data by
11:59 p.m., e.d.t. on July 16, 2014.
(4) HHCAHPS Requirements for the CY 2016 APU
For the CY 2016 APU, we require continued monthly HHCAHPS data
collection and reporting for 4 quarters. The data collection period for
the CY 2016 APU includes the second quarter 2014 through the first
quarter 2015 (the months of April 2014 through March 2015). We are in
this data collection period now. HHAs are required to submit their
HHCAHPS data files to the HHCAHPS Data Center for the second quarter
2014 by 11:59 p.m., e.d.t. on October 16, 2014; for the third quarter
2014 by 11:59 p.m., e.s.t. on January 15, 2015; for the fourth quarter
2014 by 11:59 p.m., e.d.t. on April 16, 2015; and for the first quarter
2015 by 11:59 p.m., e.d.t. on July 16, 2015. These deadlines are firm;
no exceptions are permitted.
We exempt HHAs receiving Medicare certification after the period in
which HHAs do their patient count (April 1, 2013 through March 31,
2014) on or after April 1, 2014, from the full HHCAHPS reporting
requirement for the CY 2016 APU, because these HHAs are not Medicare-
certified throughout the period of April 1, 2013, through March 31,
2014. These HHAs do not need to complete a HHCAHPS Participation
Exemption Request form for the CY 2016 APU.
We require that all HHAs that had fewer than 60 HHCAHPS-eligible
unduplicated or unique patients in the period of April 1, 2013 through
March 31, 2014 request an exemption from the HHCAHPS data collection
and submission requirements for the CY 2016 APU by completing the CY
2016 HHCAHPS Participation Exemption Request form. Agencies with fewer
than 60 HHCAHPS-eligible, unduplicated or unique patients in the period
of April 1, 2013, through March 31, 2014, are required to submit their
patient counts on the HHCAHPS Participation Exemption Request form for
the CY 2016 APU posted on https://homehealthcahps.org from April 1,
2014, to 11:59 p.m., e.s.t. on March 31, 2015. This deadline for the
exemption form is firm, as are all of the quarterly data submission
deadlines.
(5) HHCAHPS Requirements for the CY 2017 APU
For the CY 2017 APU, we require continued monthly HHCAHPS data
collection and reporting for 4 quarters. The data collection period for
the CY 2017 APU includes the second quarter 2015 through the first
quarter 2016 (the months of April 2015 through March 2016). HHAs are
required to submit their HHCAHPS data files to the HHCAHPS Data Center
for the second quarter 2015 by 11:59 p.m., e.d.t. on October 15, 2015;
for the third quarter 2015 by 11:59 p.m., e.s.t. on January 21, 2016;
for the fourth quarter 2015 by 11:59 p.m., e.d.t. on April 21, 2016;
and for the first quarter 2016 by 11:59 p.m., e.d.t. on July 21, 2016.
These deadlines are firm; no exceptions are permitted.
We exempt HHAs receiving Medicare certification after the period in
which HHAs do their patient count (April 1, 2014 through March 31,
2015) on or after April 1, 2015, from the full HHCAHPS reporting
requirement for the CY 2016 APU, because these HHAs are not Medicare-
certified throughout the period of April 1, 2014, through March 31,
2015. These HHAs do not need to complete a CY 2017 HHCAHPS
Participation Exemption Request form.
We require that all HHAs that had fewer than 60 HHCAHPS-eligible
unduplicated or unique patients in the

[[Page 66083]]

period of April 1, 2014, through March 31, 2015 request an exemption
from the HHCAHPS data collection and submission requirements for the CY
2017 APU by completing the CY 2017 HHCAHPS Participation Exemption
Request form. Agencies with fewer than 60 HHCAHPS-eligible,
unduplicated or unique patients in the period of April 1, 2014, through
March 31, 2015, are required to submit their patient counts on the CY
2017 HHCAHPS Participation Exemption Request form posted on https://homehealthcahps.org from April 1, 2015, to 11:59 p.m., e.s.t. on March
31, 2016. This deadline for the exemption form is firm, as are all of
the quarterly data submission deadlines.
(6) HHCAHPS Reconsiderations and Appeals Process
HHAs should always monitor their respective HHCAHPS survey vendors
to ensure that vendors submit their HHCAHPS data on time, by accessing
their HHCAHPS Data Submission Reports on https://homehealthcahps.org.
This helps HHAs ensure that their data are submitted in the proper
format for data processing to the HHCAHPS Data Center.
We continue HHCAHPS oversight activities as finalized in the
previous rules. In the CY 2013 HH PPS final rule (77 FR 6704, 67164),
we codified the current guideline that all approved HHCAHPS survey
vendors must fully comply with all HHCAHPS oversight activities. We
included this survey requirement at Sec. 484.250(c)(3).
We continue the HHCAHPS reconsiderations and appeals process that
we have finalized and that we have used for all prior periods cited in
the previous rules, and utilized in the CY 2012 through CY2014 annual
payment update recommendations and determinations. We have described
the HHCAHPS reconsiderations and appeals process requirements in the
Technical Direction Letter that we send to the affected HHAs annually
in September. HHAs have 30 days from their receipt of the Technical
Direction Letter informing them that they did not meet the HHCAHPS
requirements to reply to CMS with documentation that supports their
requests for reconsideration of the annual payment update to CMS. It is
important that the affected HHAs send in comprehensive information in
their reconsideration letter/package because we will not contact the
affected HHAs to request additional information or to clarify
incomplete or inconclusive information. If clear evidence to support a
finding of compliance is not present, then the 2 percent reduction in
the APU will be upheld. If clear evidence of compliance is present,
then the 2 percent reduction for the APU will be reversed. We will
notify affected HHAs by December 31st of the decisions that affect
payments in the annual year beginning on January 1st. If we determine
to uphold the 2 percent reduction for the annual payment update, the
affected HHA may further appeal the 2 percent reduction via the
Provider Reimbursement Review Board (PRRB) appeals process, which is
described in the December letter.
The following is a summary of the comments we received regarding
HHCAHPS:
Comment: A commenter stated that HHCAHPS is an unfunded
administrative mandate that entails financial and resource burdens to
HHAs.
Response: This comment is outside the scope of the proposed rule.
We finalized the collection of HHCAHPS in the CY2014 HH PPS Final Rule
published in the Federal Register on December 2, 2013 (78 FR 72256).
Please see the comments received and our responses on pages 72295 and
72296.
Comment: A commenter stated that a more timely way of collecting
and publicly reporting the HHCAHPS survey data needs to be developed.
Response: We understand this concern to collect the data in a
timely manner. This is why the patients are sampled in the month
following the two months of their care. We have a very strict timetable
for how the 42-day survey data collection period is to be implemented,
as described in the HHCAHPS Protocols and Guidelines Manual that is
posted on https://homehealthcahps.org. We also allow time for the data
received in from thousands of home health agencies to be processed and
analyzed to ensure comparisons that are reliable and valid. We apply
patient mix adjustment to the HHCAHPS data to allow for national
comparisons. The best way to understand the reasons for our detailed
survey implementation procedures is to examine the relevant sections in
the HHCAHPS Protocols and Guidelines Manual which is posted on https://homehealthcahps.org.
HHAs may always request their respective HHCAHPS survey vendors to
provide continual feedback on particular questions of the survey so
that they are kept apprised of any issues that their patients are
reporting on the HHCAHPS surveys. When HHAs contract with their vendors
about the terms of their HHCAHPS data collection and processing
processes, they may arrange for ways to receive survey feedback
information in real-time.
Final Decision: We are not recommending any changes as a result of
comments we received.
(7) For Further Information on the HHCAHPS Survey
We strongly encourage HHAs to learn about the HHCAHPS Survey and to
view the official Web site for HHCAHPS at https://homehealthcahps.org.
For further information, HHAs may also send email correspondence to the
HHCAHPS Survey Coordination Team at HHCAHPS@rti.org; or telephone toll-
free (1-866-354-0985) for more information about HHCAHPS.
3. CY 2015 Home Health Wage Index
a. Background
Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the
Secretary to provide appropriate adjustments to the proportion of the
payment amount under the HH PPS that account for area wage differences,
using adjustment factors that reflect the relative level of wages and
wage-related costs applicable to the furnishing of HH services. Since
the inception of the HH PPS, we have used inpatient hospital wage data
in developing a wage index to be applied to HH payments. We proposed to
continue this practice for CY 2015, as we continue to believe that, in
the absence of HH-specific wage data, using inpatient hospital wage
data is appropriate and reasonable for the HH PPS. Specifically, we
proposed to continue to use the pre-floor, pre-reclassified hospital
wage index as the wage adjustment to the labor portion of the HH PPS
rates. For CY 2015, the updated wage data are for hospital cost
reporting periods beginning on or after October 1, 2010 and before
October 1, 2011 (FY 2011 cost report data).
We will apply the appropriate wage index value to the labor portion
of the HH PPS rates based on the site of service for the beneficiary
(defined by section 1861(m) of the Act as the beneficiary's place of
residence). Previously, we determined each HHA's labor market area
based on definitions of metropolitan statistical areas (MSAs) issued by
the Office of Management and Budget (OMB). In the CY 2006 HH PPS final
rule (70 FR 68132), we adopted revised labor market area definitions as
discussed in the OMB Bulletin No. 03-04 (June 6, 2003). This bulletin
announced revised definitions for MSAs and the creation of micropolitan
statistical areas and core-based statistical areas (CBSAs). The
bulletin is available online at www.whitehouse.gov/omb/bulletins/b03-04.html. In adopting the CBSA

[[Page 66084]]

geographic designations, we provided a one-year transition in CY 2006
with a blended wage index for all sites of service. For CY 2006, the
wage index for each geographic area consisted of a blend of 50 percent
of the CY 2006 MSA-based wage index and 50 percent of the CY 2006 CBSA-
based wage index. We referred to the blended wage index as the CY 2006
HH PPS transition wage index. As discussed in the CY 2006 HH PPS final
rule (70 FR 68132), since the expiration of this one-year transition on
December 31, 2006, we have used the full CBSA-based wage index values.
In the CY 2015 HH PPS proposed rule, we proposed to continue to use
the same methodology discussed in the CY 2007 HH PPS final rule (71 FR
65884) to address those geographic areas in which there are no
inpatient hospitals, and thus, no hospital wage data on which to base
the calculation of the CY 2015 HH PPS wage index. For rural areas that
do not have inpatient hospitals, we would use the average wage index
from all contiguous CBSAs as a reasonable proxy. For FY 2015, there are
no rural geographic areas without hospitals for which we would apply
this policy. For rural Puerto Rico, we would not apply this methodology
due to the distinct economic circumstances that exist there (for
example, due to the close proximity to one another of almost all of
Puerto Rico's various urban and non-urban areas, this methodology would
produce a wage index for rural Puerto Rico that is higher than that in
half of its urban areas). Instead, we would continue to use the most
recent wage index previously available for that area. For urban areas
without inpatient hospitals, we would use the average wage index of all
urban areas within the state as a reasonable proxy for the wage index
for that CBSA. For CY 2015, the only urban area without inpatient
hospital wage data is Hinesville, Georgia (CBSA 25980).
A summary of the comments we received regarding the wage index and
our responses to those comments appears below. Comments on the specific
proposal to use revised OMB delineations as part of the wage index are
discussed further below.
Comment: A commenter is concerned about the policy for imputing a
rural wage index in instances where there is no hospital. The commenter
is concerned about the impact for Texas and sizable rural areas, where
some rural geographic areas that almost certainly do not have an
inpatient hospital, but are significant metropolitan areas such as
Dallas and Houston. The commenter asserts that wage rates vary
considerably in Texas between these urban and rural areas and urges CMS
to be extremely cautious in this pursuit and analyze the effects of
such assumptions in the methodology.
Response: As stated previously, there are currently no rural areas
without hospitals. Therefore, the wage index proxy is not applicable
for any rural area in CY 2015. We appreciate the comment and assure the
commenter that if the need for a rural wage index proxy should arise,
we would re-evaluate the policy in order to avoid possible unintended
consequences. As such, we would propose any potential revision to this
policy through rulemaking.
Comment: Commenters stated that hospitals have a competitive
advantage in being able to apply for geographic reclassification to
other CBSAs and being able to apply for the rural floor and that this
creates a competitive advantage for hospitals in recruiting and
retaining nurses and therapists. Commenters stated that the wage index
can be very volatile with large decreases and increases in an area
index value from one year to the next. Commenters stated that all
provider sectors should use the same index with the same rights of
reclassification, exceptions, and appeals. Commenters urged us to work
with home health providers to develop regulatory and legislative
remedies to the continuing problem of wage index disparity. One
commenter stated that the same MSAs continue to be rewarded with higher
wage indexes, while MSAs like Asheville, NC and rural NC continue to be
penalized with lower wage indexes. This commenter states that the
current system rewards MSAs that have inefficient and inappropriate
hospital costs, and is very volatile with large decreases and increases
in an MSA from one year to the next. One commenter noted that CMS is
reviewing the entire wage index system and considering a move to a
Commuting-Based Wage Index that would set hospital-specific wage
indices. The commenter urges CMS to expedite that review and implement
a system that not only recognizes variations between localities, but
also treats all provider types within a local market equitably. In the
meantime, commenters urge CMS to implement an immediate policy to limit
the wage index variations among provider types within CBSA's and
adjacent markets. Another stated that unexpected increases and
decreases in wage index values should be spread over two or more years
to reduce the rapid escalation or decline in wage index values and thus
create more payment stability in a budget neutral fashion. The
commenter specifically requests CMS respond to this broader
recommendation. One commenter urged CMS to adjust the 2015 home health
agency wage index to reflect a policy to limit the wage index disparity
between provider types within a given CBSA to no more than 10%.
Response: Consistent with our previous responses to these recurring
comments (most recently published in the CY 2014 HH PPS final rule (78
FR 72302)), the regulations that govern the HH PPS do not provide a
mechanism for allowing HHAs to seek geographic reclassification or to
utilize the rural floor provisions that exist for IPPS hospitals. The
rural floor provision in section 4410 of the Balanced Budget Act of
1997 (BBA) (Pub. L. 105-33) is specific to hospitals. The
reclassification provision found in section 1886(d)(10) of the Act is
also specific to hospitals. CMS is exploring opportunities to reform
the wage index. We refer readers to the CMS Web site at: www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Reform.html). We do not believe it would be appropriate to limit wage
index differences or changes which are above or below a given level or
to spread changes in wage index values over multiple years. The wage
index values are updated annually and applying these types of changes
would make the area wage index less reflective of the geographic area's
wages.
Comment: A commenter believes that linking home health wage index
adjustments to the pre-floor, pre-reclassified hospital wage index may
have been acceptable when this index only impacted the home health
payment caps under cost reimbursement that most providers never
reached. However, the commenter believes that this measure is imprecise
to adjust every home health payment under HHPPS and creates clear and
meaningful inaccuracies. Previously, CMS responded to this comment by
citing a historical precedent of 20 years ago when a home health
specific wage index was proposed by CMS as part of the payment capping
mechanism and was opposed by many home health agencies. The commenter
requests that CMS agree to collaborate with the home health community
to develop a home health specific wage index based on current data on
the wage categories used in home health care today and the related
costs of this labor. An additional commenter also suggested that CMS
pursue a home health specific wage index. Another commenter suggested
that a new wage system could be

[[Page 66085]]

considered for non-hospital provider sectors.
Response: Developing a wage index that utilizes data specific to
HHAs would require us to engage resources in an audit process. In order
to establish a home health specific wage index, we would need to
collect data that is specific to home health services. This is not
currently feasible due to the volatility of existing home health wage
data and the significant amount of resources that would be required to
improve the quality of that data. Furthermore, we believe the
collection of home health specific wage data would place a significant
amount of additional burden on HHAs. As discussed above, we continue to
believe that in the absence of home health specific wage data, using
the pre-floor, pre-reclassified hospital wage data is appropriate and
reasonable for the HH PPS.
Comment: A commenter expressed concern that when a hospital appeals
or requests exceptions to what they believe are errors in the wage
data, that corrections are not granted. The commenter asked us to
reconsider this matter and believes that all providers should have the
right to appeal or request exceptions when they suspect that there are
errors in the data on which their rates will be based.
Response: When a hospital submits an appeal of its wage data, CMS
ensures that the appeal goes through the proper protocol and is given
consideration. Not every appeal will warrant being granted. When
appeals are valid, CMS take immediate action to correct the wage data
and publish corrections to the wage indices for all provider types.
Comment: A commenter is concerned that the home health wage index
is based on inpatient hospital wage data, which in some cases contains
errors that can result in significant fluctuations in the HHA wage
index. Based on the Hospital Wage Index Development Timetable, there
are specific deadlines for hospitals to report errors in the wage data
to their MAC, CMS emphasizes that data that is incorrect in the
preliminary hospital wage index data PUFs, but for which no correction
request was received by the deadline, will not be changed for inclusion
in the wage index. Another commenter stated that the inaction of a
hospital or a mishandling of data by CMS or the MAC should not result
in the lowering of an area's wage index value and, therefore, lowering
Medicare payments for all HHAs in the area. Other commenters stated
that inaccurate cost report data results in unpredictable year to year
swings in the wage index values. Commenters are concerned that HHAs are
subject to a wage index database that they have no control over. As
such, HHAs are at the mercy of hospital data submission and have no
means to correct erroneous data or avoid the impact of any unusual
compensation changes in a hospital.
Response: We believe that the mechanisms we employ ensure the
accuracy of the hospital cost report data and resulting wage index. Our
contractors perform desk reviews of all hospital cost report Worksheet
S-3 wage data. In addition, we perform edits on the wage data to
further ensure the accuracy and validity of the wage data. Any provider
may submit comments on the hospital wage index during the annual IPPS
rulemaking. We believe that our review processes result in an accurate
collection of wage data.
Comment: A commenter requested that CMS remove six specific
counties in New Jersey from the New York City wage index.
Response: We believe that the OMB standards for delineating
Metropolitan and Micropolitan Statistical Areas are appropriate for
determining wage area differences. We do not believe it would be
appropriate to make exceptions and carve out specific areas from the
OMB delineations. The 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas were published in a Federal Register
Notice on June 28, 2010 (75 FR 37246).
Final Decision: After considering the comments received, for the
reasons discussed above and in the CY 2015 HH PPS proposed rule (79 FR
38366), we are finalizing our proposal to continue to use the pre-
floor, pre-reclassified hospital inpatient wage index data to develop
the HH PPS wage index. For CY 2015, the updated wage data are for
hospital cost reporting periods beginning on or after October 1, 2010
and before October 1, 2011 (FY 2011 cost report data).
b. Update
On February 28, 2013, OMB issued Bulletin No. 13-01, announcing
revisions to the delineations of MSAs, Micropolitan Statistical Areas,
and CBSAs, and guidance on uses of the delineation of these areas. This
bulletin is available online at https://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf. This bulletin states that
it ``provides the delineations of all Metropolitan Statistical Areas,
Metropolitan Divisions, Micropolitan Statistical Areas, Combined
Statistical Areas, and New England City and Town Areas in the United
States and Puerto Rico based on the standards published on June 28,
2010, in the Federal Register (75 FR 37246-37252) and Census Bureau
data.''
While the revisions OMB published on February 28, 2013 are not as
sweeping as the changes made when we adopted the CBSA geographic
designations for CY 2006, the February 28, 2013 bulletin does contain a
number of significant changes. For example, there are new CBSAs, urban
counties that have become rural, rural counties that have become urban,
and existing CBSAs that have been split apart.
As discussed in the CY 2014 HH PPS final rule (78 FR 72302), the
changes made by the bulletin and their ramifications required extensive
review by CMS before using them for the HH PPS wage index. We completed
our assessment and in the FY 2015 IPPS final rule (79 FR 49854), and
stated that we will use the most recent labor market area delineations
issued by OMB for payments for inpatient stays at general acute care
and long-term care hospitals (LTCHs). In addition, in the FY 2015
Skilled Nursing Facility (SNF) PPS final rule (79 FR 45628), we made a
final decision to use the new labor market delineations issued by OMB
for payments for SNFs.
c. Implementation of New Labor Market Delineations
We believe it is important for the HH PPS to use the latest OMB
delineations available to maintain a more accurate and up-to-date
payment system that reflects the reality of population shifts and labor
market conditions. While CMS and other stakeholders have explored
potential alternatives to the current CBSA-based labor market system
(we refer readers to the CMS Web site at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Reform.html), no
consensus has been achieved regarding how best to implement a
replacement system. As discussed in the FY 2005 IPPS final rule (69 FR
49027), ``While we recognize that MSAs are not designed specifically to
define labor market areas, we believe they do represent a useful proxy
for this purpose.'' We further believe that using the most current OMB
delineations will increase the integrity of the HH PPS wage index by
creating a more accurate representation of geographic variation in wage
levels. We have reviewed our findings and impacts relating to the new
OMB delineations, and have concluded that there is no compelling reason
to further delay implementation.
We proposed to incorporate the new CBSA delineations into the CY
2015 HH PPS wage index in the same manner in

[[Page 66086]]

which the CBSAs were first incorporated into the HH PPS wage index in
CY 2006 (70 FR 68138). We proposed to use a one-year blended wage index
for CY 2015. We referred to this blended wage index as the CY 2015 HH
PPS transition wage index. The proposed transition wage index would
consist of a 50/50 blend of the wage index values using OMB's old area
delineations and the wage index values using OMB's new area
delineations. That is, for each county, a blended wage index would be
calculated equal to fifty percent of the CY 2015 wage index using the
old labor market area delineation and fifty percent of the CY 2015 wage
index using the new labor market area delineation (both using FY 2011
hospital wage data). This ultimately results in an average of the two
values.
The comments we received on the proposal to include the newest OMB
area delineations into the HH PPS wage index and the proposed wage
index transition methodology and our responses to these comments,
appear below:
Comment: Some commenters have reservations about CMS's proposal to
adopt revisions to the CBSAs developed by the Census Bureau and OMB.
Commenters strongly support a phased-in approach to provide a more
uniform and equitable transition for providers impacted by the CBSA
revisions. Commenters believe that a phased-in approach will mitigate
short-term financial instability and better align OMB's labor market
areas with the actual labor costs of provider organizations.
Response: While CMS and other stakeholders have explored potential
alternatives to the current CBSA-based labor market system (we refer
readers to the CMS Web site at: www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Reform.html), no consensus
has been achieved regarding how best to implement a replacement system.
As stated in the FY 2005 IPPS final rule (69 FR 49027), while we
recognize that MSAs are not designed specifically to define labor
market areas, we believe they do represent a useful proxy for this
purpose. We believe that using the most current OMB delineations would
increase the integrity of the HH PPS wage index by creating a more
accurate representation of geographic variation in wage levels. We
believe that the most current OMB delineations accurately reflect the
local economies and wage levels of the areas in which hospitals are
currently located. In the CY 2015 HH PPS proposed rule, we proposed a
transition period of one year, during which a 50/50 blended wage index
would be used for all providers in CY 2015, in order to mitigate the
resulting short-term instability and negative impacts on certain
providers and to provide time for providers to adjust to their new
labor market delineations. Under this proposal, providers would receive
50 percent of their FY 2015 wage index based on the new OMB
delineations and 50 percent of their FY 2015 wage index based on the
labor market delineations for CY 2014 (both using FY 2011 hospital wage
data).
Comment: Most commenters support using a 50/50 blend of the current
CBSA areas with the new CBSA areas as a way of easing the transition to
the new geographic area designations. A commenter supports the budget
neutrality adjustment to account for changes in the wage indices.
Response: We thank the commenters for their support of these two
policies.
Comment: While a commenter commends CMS on the proposed wage index
phase-in, which should afford home health providers time to adjust
their budgets, expenses and operations, the commenter also recommends
that home health providers that have been negatively impacted in such
reclassified areas be permitted to seek a hardship exception or
additional phase-in period. Such measures could be used in the event
providers find that the characteristics of their operating areas remain
representative of rural communities. This will help ensure that
beneficiary access to home health services in such areas is not stifled
or significantly negatively impacted.
Response: We do not believe that the adoption of the OMB's new area
delineations will impact HHAs that provide care to beneficiaries who
are located in areas whose delineations have changed to such an extent
that the HHAs will no longer be able to provide care in their current
locale. As always, we continue to monitor home health utilization to
determine if there are any problems related to beneficiary access to
care.
Comment: A commenter states that CMS' one-year transition policy of
using a 50/50 blend of the previous and updated CBSA values is
inconsistent with CMS' policy published in the Inpatient Prospective
Payment System (IPPS) and Long- Term Acute Care Hospital-Prospective
Payment System (LTCH-PPS) final rule. That rule applies a one-year 50/
50 blending of the previous and updated CBSA values, respectively, only
to facilities whose payments will decrease based on the use of the
updated CBSAs. This inconsistency unfairly penalizes home health
agencies that would benefit from applying the new CBSA delineations
exclusively. Consequently, the commenter recommends that CMS apply the
one-year 50/50 blend to any agencies experiencing a decrease in their
payments, but utilize the new CBSA delineations for those agencies that
will experience an increase in their Medicare payments. In contrast,
another commenter stated that while the current requirement to maintain
budget neutrality means that some agencies will not immediately see the
full increases in their wage index values to reduce the impact of those
with decreases, the commenter believes this is a worthwhile trade-off
to assure that those agencies who would otherwise suffer sudden and
significant payment declines.
Response: The implementation of the revised OMB delineations, which
we are finalizing in this rule, sets home health payments at a level
that more accurately reflects the costs of labor in a geographic area.
Accordingly, under this policy, HHAs will experience a decrease from
their current wage index only to the extent that their current wage
index value actually exceeds what the latest area wage data warrants
using the revised OMB delineations, and they will experience an
increase from their current wage index value to the extent that their
current wage index value is less than what the latest area wage data
warrants using the revised OMB delineations. As discussed in the CY
2015 HH PPS proposed rule (79 FR 38416), we considered whether or not
the blended wage index should be used for all HHAs or for only a subset
of HHAs, such as those HHAs that would experience a decrease in their
respective wage index values due to implementation of the revised OMB
delineations. If we were to apply the transition policy only to those
HHAs that would experience a decrease in their respective wage index
values due to implementation of the revised OMB delineations, the wage
index budget neutrality factor, discussed in section III.D.4, would
result in reduced base rates for all HHAs as compared to the budget
neutrality factor that results from applying the blended wage index to
all HHAs. We believe that our proposal to apply a one-year blended wage
index in CY 2015 for all geographic areas appropriately balances the
interests of all HHAs and would best achieve our objective of providing
relief to negatively impacted HHAs.
Final Decision: For the reasons previously discussed, we are
finalizing our proposal to include changes to the

[[Page 66087]]

HH PPS wage index based on the newest OMB area delineations and to
apply a one-year blended wage index in CY 2015 for all geographic areas
to assist providers in adapting to these changes. This transition
policy will be in effect for a one-year period, beginning January 1,
2015, and continuing through December 31, 2015. Thus, beginning January
1, 2016, the wage index for all HH PPS payments will be fully based on
the new OMB delineations.
The wage index Addendum provides a crosswalk between the CY 2015
wage index using the current OMB delineations in effect in CY 2014 and
the CY 2015 wage index using the revised OMB delineations. Addendum A
shows each state and county and its corresponding transition wage index
along with the previous CBSA number, the new CBSA number and the new
CBSA name. Due to the calculation of the blended transition wage index,
some CBSAs may have more than one transition wage index value
associated with that CBSA. However, each county will have only one
transition wage index. Therefore, for counties located in CBSAs that
correspond to more than one transition wage index, a number other than
the CBSA number will need to be input on the claim for CY 2015 only.
These numbers are shown in the last column of Addendum A. The final CY
2015 transition wage index as set forth in Addendum A is available on
the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Home-Health-Prospective-Payment-System-Regulations-and-Notices.html
4. CY 2015 Annual Payment Update
a. Background
The Medicare HH PPS has been in effect since October 1, 2000. As
set forth in the July 3, 2000 final rule (65 FR 41128), the base unit
of payment under the Medicare HH PPS is a national, standardized 60-day
episode payment rate. As set forth in 42 CFR 484.220, we adjust the
national, standardized 60-day episode payment rate by a case-mix
relative weight and a wage index value based on the site of service for
the beneficiary.
To provide appropriate adjustments to the proportion of the payment
amount under the HH PPS to account for area wage differences, we apply
the appropriate wage index value to the labor portion of the HH PPS
rates. The labor-related share of the case-mix adjusted 60-day episode
rate will continue to be 78.535 percent and the non-labor-related share
will continue to be 21.465 percent as set out in the CY 2013 HH PPS
final rule (77 FR 67068). The CY 2015 HH PPS rates will use the same
case-mix methodology as set forth in the CY 2008 HH PPS final rule with
comment period (72 FR 49762) and adjusted as described in section
III.C. of this rule. The following are the steps we take to compute the
case-mix and wage-adjusted 60-day episode rate:
(1) Multiply the national 60-day episode rate by the patient's
applicable case-mix weight.
(2) Divide the case-mix adjusted amount into a labor (78.535
percent) and a non-labor portion (21.465 percent).
(3) Multiply the labor portion by the applicable wage index based
on the site of service of the beneficiary.
(4) Add the wage-adjusted portion to the non-labor portion,
yielding the case-mix and wage adjusted 60-day episode rate, subject to
any additional applicable adjustments.
In accordance with section 1895(b)(3)(B) of the Act, this document
constitutes the annual update of the HH PPS rates. Section 484.225 sets
forth the specific annual percentage update methodology. In accordance
with Sec. 484.225(i), for a HHA that does not submit HH quality data,
as specified by the Secretary, the unadjusted national prospective 60-
day episode rate is equal to the rate for the previous calendar year
increased by the applicable HH market basket index amount minus two
percentage points. Any reduction of the percentage change will apply
only to the calendar year involved and will not be considered in
computing the prospective payment amount for a subsequent calendar
year.
Medicare pays the national, standardized 60-day case-mix and wage-
adjusted episode payment on a split percentage payment approach. The
split percentage payment approach includes an initial percentage
payment and a final percentage payment as set forth in Sec.
484.205(b)(1) and Sec. 484.205(b)(2). We may base the initial
percentage payment on the submission of a request for anticipated
payment (RAP) and the final percentage payment on the submission of the
claim for the episode, as discussed in Sec. 409.43. The claim for the
episode that the HHA submits for the final percentage payment
determines the total payment amount for the episode and whether we make
an applicable adjustment to the 60-day case-mix and wage-adjusted
episode payment. The end date of the 60-day episode as reported on the
claim determines which calendar year rates Medicare will use to pay the
claim.
We may also adjust the 60-day case-mix and wage-adjusted episode
payment based on the information submitted on the claim to reflect the
following:
A low-utilization payment adjustment (LUPA) is provided on
a per-visit basis as set forth in Sec. 484.205(c) and Sec. 484.230.
A partial episode payment (PEP) adjustment as set forth in
Sec. 484.205(d) and Sec. 484.235.
An outlier payment as set forth in Sec. 484.205(e) and
Sec. 484.240.
b. CY 2015 National, Standardized 60-Day Episode Payment Rate
Section 1895(3)(A)(i) of the Act required that the 60-day episode
base rate and other applicable amounts be standardized in a manner that
eliminates the effects of variations in relative case mix and area wage
adjustments among different home health agencies in a budget neutral
manner. To determine the CY 2015 national, standardized 60-day episode
payment rate, we will apply a wage index standardization factor, a
case-mix budget neutrality factor described in section III.C, the
rebasing adjustment described in section II.C, and the MFP-adjusted
home health market basket update discussed in section III.D.1 of this
final rule.
To calculate the wage index standardization factor, henceforth
referred to as the wage index budget neutrality factor, we simulated
total payments for non-LUPA episodes using the 2015 wage index and
compared it to our simulation of total payments for non-LUPA episodes
using the 2014 wage index. By dividing the total payments for non-LUPA
episodes using the 2015 wage index by the total payments for non-LUPA
episodes using the 2014 wage index, we obtain a wage index budget
neutrality factor of 1.0024. We will apply the wage index budget
neutrality factor of 1.0024 to the CY 2015 national, standardized 60-
day episode rate.
As discussed in section III.C of this final rule, to ensure the
changes to the case-mix weights are implemented in a budget neutral
manner, we will apply a case-mix weights budget neutrality factor to
the CY 2015 national, standardized 60-day episode payment rate. The
case-mix weights budget neutrality factor is calculated as the ratio of
total payments when CY 2015 case-mix weights are applied to CY 2013
utilization (claims) data to total payments when CY 2014 case-mix
weights are applied to CY 2013 utilization data. The case-mix budget
neutrality factor for CY 2015 will be 1.0366 as described in section
III.C of this final rule.

[[Page 66088]]

Then, we will apply the -$80.95 rebasing adjustment finalized in
the CY 2014 HH PPS final rule (78 FR 72256) and discussed in section
II.C. Lastly, we will update the payment rates by the CY 2015 HH
payment update percentage of 2.1 percent (MFP-adjusted home health
market basket update) as described in section III.D.1 of this final
rule. The CY 2015 national, standardized 60-day episode payment rate
will be $2,961.38 as calculated in Table 22.

Table 22--CY 2015 60-Day National, Standardized 60-Day Episode Payment Amount
----------------------------------------------------------------------------------------------------------------
CY 2014 National, Wage index Case-mix weights CY 2015 National,
standardized 60- budget budget CY 2015 Rebasing CY 2015 HH standardized 60-
day episode neutrality neutrality adjustment Payment update day episode
payment factor factor percentage payment
----------------------------------------------------------------------------------------------------------------
$2,869.27 x; 1.0024 x; 1.0366 -$80.95 x; 1.021 = $2,961.38
----------------------------------------------------------------------------------------------------------------

The CY 2015 national, standardized 60-day episode payment rate for
an HHA that does not submit the required quality data is updated by the
CY 2015 HH payment update (2.1 percent) minus 2 percentage points and
is shown in Table 23.

TABLE 23--For HHAs That Do Not Submit the Quality Data--CY 2015 National, Standardized 60-Day Episode Payment
Amount
----------------------------------------------------------------------------------------------------------------
CY 2015 HH
CY 2014 National, Wage index Case-mix weights Payment update CY 2015 National,
standardized 60- budget budget CY 2015 Rebasing percentage minus standardized 60-
day episode neutrality neutrality adjustment 2 percentage day episode
payment factor factor points payment
----------------------------------------------------------------------------------------------------------------
$2,869.27 x; 1.0024 x; 1.0366 -$80.95 x; 1.001 = $2,903.37
----------------------------------------------------------------------------------------------------------------

c. National Per-Visit Rates
The national per-visit rates are used to pay LUPAs (episodes with
four or fewer visits) and are also used to compute imputed costs in
outlier calculations. The per-visit rates are paid by type of visit or
HH discipline. The six HH disciplines are as follows:
Home health aide (HH aide);
Medical Social Services (MSS);
Occupational therapy (OT);
Physical therapy (PT);
Skilled nursing (SN); and
Speech-language pathology (SLP).
To calculate the CY 2015 national per-visit rates, we start with
the CY 2014 national per-visit rates. We then apply a wage index budget
neutrality factor to ensure budget neutrality for LUPA per-visit
payments and increase each of the six per-visit rates by the maximum
rebasing adjustments described in section II.C. of this rule. We
calculate the wage index budget neutrality factor by simulating total
payments for LUPA episodes using the 2015 wage index and comparing it
to simulated total payments for LUPA episodes using the 2014 wage
index. By dividing the total payments for LUPA episodes using the 2015
wage index by the total payments for LUPA episodes using the 2014 wage
index, we obtain a wage index budget neutrality factor of 1.0012. We
will apply the wage index budget neutrality factor of 1.0012 to the CY
2015 national per-visit rates.
The LUPA per-visit rates are not calculated using case-mix weights.
Therefore, there is no case-mix weights budget neutrality factor needed
to ensure budget neutrality for LUPA payments. Finally, the per-visit
rates for each discipline are updated by the CY 2015 HH payment update
percentage of 2.1 percent. The national per-visit rates are adjusted by
the wage index based on the site of service of the beneficiary. The
per-visit payments for LUPAs are separate from the LUPA add-on payment
amount, which is paid for episodes that occur as the only episode or
initial episode in a sequence of adjacent episodes. The CY 2015
national per-visit rates are shown in Tables 24 and 25.

TABLE 24--CY 2015 National Per-Visit Payment Amounts for HHAs That DO Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
Wage index CY 2015 HH
CY 2014 Per- budget CY 2015 Payment CY 2015 Per-
HH Discipline type visit neutrality Rebasing update visit
payment factor adjustment percentage payment
----------------------------------------------------------------------------------------------------------------
Home Health Aide.......................... $54.84 x; 1.0012 + $1.79 x; 1.021 $57.89
Medical Social Services................... 194.12 x; 1.0012 + $6.34 x; 1.021 204.91
Occupational Therapy...................... 133.30 x; 1.0012 + $4.35 x; 1.021 140.70
Physical Therapy.......................... 132.40 x; 1.0012 + $4.32 x; 1.021 139.75
Skilled Nursing........................... 121.10 x; 1.0012 + $3.96 x; 1.021 127.83
Speech-Language Pathology................. 143.88 x; 1.0012 + 4.70 x; 1.021 151.88
----------------------------------------------------------------------------------------------------------------

[[Page 66089]]

The CY 2015 per-visit payment rates for an HHA that does not submit
the required quality data are updated by the CY 2015 HH payment update
(2.1 percent) minus 2 percentage points and is shown in Table 25.

Table 25--CY 2015 National Per-Visit Payment Amounts for HHAs That DO NOT Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
CY 2015 HH
Payment
Wage index CY 2015 update
HH Discipline type CY 2014 Per- budget Rebasing percentage CY 2015 Per-
visit rates neutrality adjustment minus 2 visit rates
factor percentage
points
----------------------------------------------------------------------------------------------------------------
Home Health Aide.......................... $54.84 x; 1.0012 + $1.79 x; 1.001 $56.75
Medical Social Services................... 194.12 x; 1.0012 + $6.34 x; 1.001 200.89
Occupational Therapy...................... 133.30 x; 1.0012 + $4.35 x; 1.001 137.95
Physical Therapy.......................... 132.40 x; 1.0012 + $4.32 x; 1.001 137.02
Skilled Nursing........................... 121.10 x; 1.0012 + $3.96 x; 1.001 125.33
Speech-Language Pathology................. 143.88 x; 1.0012 + 4.70 x; 1.001 148.90
----------------------------------------------------------------------------------------------------------------

d. Low-Utilization Payment Adjustment (LUPA) Add-On Factors
LUPA episodes that occur as the only episode or as an initial
episode in a sequence of adjacent episodes are adjusted by applying an
additional amount to the LUPA payment before adjusting for area wage
differences. In the CY 2014 HH PPS final rule, we changed the
methodology for calculating the LUPA add-on amount by finalizing the
use of three LUPA add-on factors: 1.8451 for SN; 1.6700 for PT; and
1.6266 for SLP (78 FR 72306). We multiply the per-visit payment amount
for the first SN, PT, or SLP visit in LUPA episodes that occur as the
only episode or an initial episode in a sequence of adjacent episodes
by the appropriate factor to determine the LUPA add-on payment amount.
For example, for LUPA episodes that occur as the only episode or an
initial episode in a sequence of adjacent episodes, if the first
skilled visit is SN, the payment for that visit will be $235.86 (1.8451
multiplied by $127.83), subject to area wage adjustment.
e. Non-Routine Medical Supply (NRS) Conversion Factor Update
Payments for NRS are computed by multiplying the relative weight
for a particular severity level by the NRS conversion factor. To
determine the CY 2015 NRS conversion factor, we start with the 2014 NRS
conversion factor ($53.65) and apply the -2.82 percent rebasing
adjustment described in section II.C. of this rule (1 - 0.0282 =
0.9718). We then update the conversion factor by the CY 2015 HH payment
update percentage (2.1 percent). We do not apply a standardization
factor as the NRS payment amount calculated from the conversion factor
is not wage or case-mix adjusted when the final claim payment amount is
computed. The NRS conversion factor for CY 2015 is shown in Table 26.

Table 26--CY 2015 NRS Conversion Factor for HHAs That DO Submit the
Required Quality Data
------------------------------------------------------------------------
CY 2015 HH CY 2015 NRS
CY 2014 NRS CY 2015 Rebasing Payment update Conversion
Conversion factor adjustment percentage factor
------------------------------------------------------------------------
$53.65 x; 0.9718 x; 1.021 = $53.23
------------------------------------------------------------------------

Using the CY 2015 NRS conversion factor, the payment amounts for
the six severity levels are shown in Table 27.

Table 27--CY 2015 NRS Payment Amounts for HHAs That DO Submit the
Required Quality Data
------------------------------------------------------------------------
CY 2015 NRS
Severity level Points Relative Payment
(scoring) weight amounts
------------------------------------------------------------------------
1............................ 0.............. 0.2698 $14.36
2............................ 1 to 14........ 0.9742 51.86
3............................ 15 to 27....... 2.6712 142.19
4............................ 28 to 48....... 3.9686 211.25
5............................ 49 to 98....... 6.1198 325.76
6............................ 99+............ 10.5254 560.27
------------------------------------------------------------------------

For HHAs that do not submit the required quality data, we again
begin with the CY 2014 NRS conversion factor ($53.65) and apply the --
2.82 percent rebasing adjustment discussed in section II.C of this
final rule (1 - 0.0282 = 0.9718). We then update the NRS conversion
factor by the CY 2015 HH payment update percentage (2.1 percent) minus
2 percentage points. The CY 2015 NRS conversion factor for

[[Page 66090]]

HHAs that do not submit quality data is shown in Table 28.

Table 28--CY 2015 NRS Conversion Factor for HHAs That DO NOT Submit the
Required Quality Data
------------------------------------------------------------------------
CY 2015 HH
payment update CY 2015 NRS
CY 2014 NRS CY 2015 rebasing percentage minus conversion
conversion factor adjustment 2 percentage factor
points
------------------------------------------------------------------------
$53.65 x; 0.9718 x; 1.001 $52.19
------------------------------------------------------------------------

The payment amounts for the various severity levels based on the
updated conversion factor for HHAs that do not submit quality data are
calculated in Table 29.

Table 29--CY 2015 NRS Payment Amounts for HHAs That DO NOT Submit the
Required Quality Data
------------------------------------------------------------------------
CY 2015 NRS
Severity level Points Relative payment
(scoring) weight amounts
------------------------------------------------------------------------
1............................ 0.............. 0.2698 $ 14.08
2............................ 1 to 14........ 0.9742 50.84
3............................ 15 to 27....... 2.6712 139.41
4............................ 28 to 48....... 3.9686 207.12
5............................ 49 to 98....... 6.1198 319.39
6............................ 99+............ 10.5254 549.32
------------------------------------------------------------------------

f. Rural Add-On
Section 421(a) of the MMA required, for HH services furnished in a
rural areas (as defined in section 1886(d)(2)(D) of the Act), for
episodes or visits ending on or after April 1, 2004, and before April
1, 2005, that the Secretary increase the payment amount that otherwise
will have been made under section 1895 of the Act for the services by 5
percent.
Section 5201 of the DRA amended section 421(a) of the MMA. The
amended section 421(a) of the MMA required, for HH services furnished
in a rural area (as defined in section 1886(d)(2)(D) of the Act), on or
after January 1, 2006 and before January 1, 2007, that the Secretary
increase the payment amount otherwise made under section 1895 of the
Act for those services by 5 percent.
Section 3131(c) of the Affordable Care Act amended section 421(a)
of the MMA to provide an increase of 3 percent of the payment amount
otherwise made under section 1895 of the Act for HH services furnished
in a rural area (as defined in section 1886(d)(2)(D) of the Act), for
episodes and visits ending on or after April 1, 2010, and before
January 1, 2016.
Section 421 of the MMA, as amended, waives budget neutrality
related to this provision, as the statute specifically states that the
Secretary shall not reduce the standard prospective payment amount (or
amounts) under section 1895 of the Act applicable to HH services
furnished during a period to offset the increase in payments resulting
in the application of this section of the statute.
The comments we received regarding the rural add-on, along with our
responses, appear below:
Comment: One commenter questioned why the rural add-on will not
apply after CY 2015. Several commenter urged CMS to not eliminate the
rural add-on scheduled to sunset on December 31, 2015. A commenter
stated that CMS should conduct a separate and comprehensive impact
analysis on what the impact of elimination of the rural-add would have
in the availability of home health services in rural areas. Another
commenter asked if CMS would encourage the continuation of the rural
add-on for the indefinite future beyond 2016.
Response: The rural add-on is a legislative provision, mandated by
the Affordable Care Act, and CMS does not have the authority to revise
the date at which the rural add-on expires. Since the inception of the
HH PPS, at various points in time, rural add-ons have been applied to
home health payments due to legislation. These rural add-ons have not
been subject to budget neutrality. If CMS were to propose a regulatory
policy change to provide a rural add-on payment, we would have to apply
the add-on in a budget neutral manner and adjust (decrease) other
components of the payment rates.
Comment: A commenter suggests that CMS should investigate the
impact of a applying a population density adjustment factor to the
rates. This adjustment factor would increase payments in less densely
populated areas (primarily rural) to offset higher costs of providing
care in rural areas. These costs include increases in transportation
costs and the scarcity of skilled professionals in rural areas. The
commenter states that an increase to rural payments rates is necessary
as rural wage indices are uniformly lower than urban wage indices.
Response: We do not have evidence that a population density
adjustment is appropriate. While rural HHAs cite the added cost of long
distance travel to provide care for their patients, urban HHAs cite
added costs associated with needed security measures and traffic
congestion. In regard to the commenters assertion that rural wage
indices are uniformly lower than urban wage indices, our analysis shows
that almost 18 percent of urban wage index values are less than the
rural wage index in the corresponding state.
Comment: Commenters recommend that the rural add-on should apply
for at least one year for services provided to beneficiaries in
counties that are transitioning from rural to urban status for wage
index purposes. Other commenters requested that CMS clarify which areas
qualify for the rural add-on on as numerous areas lose rural status
under the new CBSAs. Some commenters state that in 2006 when CMS
blended MSA and CBSA regions as

[[Page 66091]]

part of a comparable wage index transition policy, CMS applied the
rural add-on for both patients residing in a non-MSA and non-CBSA area.
In other words, the rural add-on applied in the rural areas under the
old MSA designations as well as the new CBSA designations during the
transition year.
Response: When we implemented OMB revised delineations in CY 2006,
we applied the rural add-on to counties in non-CBSA areas. If a county
had been previously classified as rural but changed to urban
classification under the new CBSAs, the rural add-on was not applied.
The commenters who stated that CMS applied the rural add-on for
patients residing in non-MSA areas and patients residing in non-CBSA
areas are mistaken. This policy was implemented in CMS Transmittal 887
which was published on March 10, 2006. In order to remain consistent
with our previous policy for applying the rural add-on, we would
implement the rural add-on in the same manner for CY 2015. That is,
only counties that are classified as rural under the new area
delineations would receive the rural add-on. As stated previously, we
believe that this method of adopting the most current OMB delineations
would increase the integrity of the wage index as it is a more
accurately represents geographic variation in wage levels.
Comment: One commenter recommended that CMS adopt the same
definition of a ``rural'' area that is used by the Federal Office of
Rural Health (ORH). The commenter states that the ORH explicitly
recognizes that ``the New England states require special consideration
as ``their geographic divisions are different than typical counties.''
There are many towns within Massachusetts that are very rural, yet they
lie within large counties that are designated a CBSA based on the fact
that there is a small city within that county. The commenter
recommended that CMS modify the CBSA approach to recognize rural census
tracts within large counties.
Response: In the CY 2015 HH PPS proposed rule, we did not propose
alternatives to the use of CBSAs, which were adopted in the CY 2006 HH
PPS final rule, to classify areas as ``rural'' for wage adjustment
purposes. In the CY 2006 HH PPS final rule (70 FR 68132), we proposed
and finalized the adoption of revised labor market area definitions as
discussed in the OMB Bulletin No. 03-04 (June 6, 2003). This bulletin
announced revised definitions for MSAs and the creation of micropolitan
statistical areas and core-based statistical areas (CBSAs).
Comment: A commenter requested that CMS disclose the areas that
would lose their rural status under the new CBSAs.
Response: We provided several tables in the CY 2015 HH PPS proposed
rule (79 FR 38392-38395) which display the counties whose status will
change if we finalize our proposal to adopt the new OMB delineations.
Table 13 shows the 37 counties that would change from urban to rural
status. Table 14 shows the 105 counties that would change from rural to
urban status. Lastly, Table 15 displays the 46 urban counties that
would move from one urban CBSA to another urban CBSA.
Final Decision: For CY 2015, home health payment rates for services
provided to beneficiaries in areas that are defined as rural under the
new OMB delineations will be increased by 3 percent as mandated by
section 3131(c) of the Affordable Care Act. The 3 percent rural add-on
is applied to the national, standardized 60-day episode payment rate,
national per visit rates, and NRS conversion factor when HH services
are provided in rural (non-CBSA) areas. Refer to Tables 30 through 33
for these payment rates.

Table 30--CY 2015 Payment Amounts for 60-Day Episodes for Services Provided in a Rural Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
For HHAs that DO submit quality [deg]Data For HHAs that DO NOT submit quality data
--------------------------------------------------------------------------------------------------------------------------------------------------------
CY 2015 rural CY 2015 CY 2015 rural
Multiply by national, national, Multiply by the national,
CY 2015 national, standardized 60-day episode payment rate the 3 percent standardized standardized 3 percent rural standardized 60-
rural add-on 60-day episode 60-day episode add-on day episode
payment rate payment rate payment rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
$2,961.38.......................................................... x; 1.03 $3,050.22 $2,903.37 x; 1.03 $2,990.47
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 31--CY 2015 Per-Visit Amounts for Services Provided in a Rural Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
For HHAs that DO submit quality data For HHAs that DO NOT submit quality data
-----------------------------------------------------------------------------------------------------
HH Discipline type Multiply by the Multiply by the
CY 2015 per- 3 percent rural CY 2015 rural CY 2015 per- 3 percent rural CY 2015 rural
visit rate add-on per-visit rates visit rate add-on per-visit rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
HH Aide........................................... $57.89 x; 1.03 $59.63 $56.75 x; 1.03 $58.45
MSS............................................... 204.91 x; 1.03 211.06 200.89 x; 1.03 206.92
OT................................................ 140.70 x; 1.03 144.92 137.95 x; 1.03 142.09
PT................................................ 139.75 x; 1.03 143.94 137.02 x; 1.03 141.13
SN................................................ 127.83 x; 1.03 131.66 125.33 x; 1.03 129.09
SLP............................................... 151.88 x; 1.03 156.44 148.90 x; 1.03 153.37
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 32--CY 2015 NRS Conversion Factor for Services Provided in Rural Areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
For HHAs that DO submit quality data For HHAs that DO NOT submit quality data
--------------------------------------------------------------------------------------------------------------------------------------------------------
Multiply by the CY 2015 rural CY 2015 Multiply by the CY 2015 rural
CY 2015 conversion factor 3 percent rural NRS conversion Conversion 3 percent rural NRS conversion
add-on factor factor add-on factor
--------------------------------------------------------------------------------------------------------------------------------------------------------
$53.23............................................................. x; 1.03 $54.83 $52.19 x; 1.03 $53.76
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 66092]]

Table 33--CY 2015 NRS Payment Amounts for Services Provided in Rural Areas
----------------------------------------------------------------------------------------------------------------
For HHAs that DO submit For HHAs that DO NOT submit
quality data (CY 2015 NRS quality data (CY 2015 NRS
Conversion Factor = $54.83) Conversion Factor = $53.76)
----------------------------------------------------------
Severity level Points (scoring) CY 2015 NRS CY 2015 NRS
Relative Payment Relative Payment
weight amounts for weight amounts for
rural areas rural areas
----------------------------------------------------------------------------------------------------------------
1............................... 0.................. 0.2698 $14.79 0.2698 $14.50
2............................... 1 to 14............ 0.9742 53.42 0.9742 52.37
3............................... 15 to 27........... 2.6712 146.46 2.6712 143.60
4............................... 28 to 48........... 3.9686 217.60 3.9686 213.35
5............................... 49 to 98........... 6.1198 335.55 6.1198 329.00
6............................... 99+................ 10.5254 577.11 10.5254 565.85
----------------------------------------------------------------------------------------------------------------

E. Payments for High-Cost Outliers Under the HH PPS

1. Background
Section 1895(b)(5) of the Act allows for the provision of an
addition or adjustment to the national, standardized 60-day case-mix
and wage-adjusted episode payment amounts in the case of episodes that
incur unusually high costs due to patient care needs. Prior to the
enactment of the Affordable Care Act, section 1895(b)(5) of the Act
stipulated that projected total outlier payments could not exceed 5
percent of total projected or estimated HH payments in a given year. In
the Medicare Program; Prospective Payment System for Home Health
Agencies final rule (65 FR 41188 through 41190), we described the
method for determining outlier payments. Under this system, outlier
payments are made for episodes whose estimated costs exceed a threshold
amount for each HH Resource Group (HHRG). The episode's estimated cost
is the sum of the national wage-adjusted per-visit payment amounts for
all visits delivered during the episode. The outlier threshold for each
case-mix group or PEP adjustment is defined as the 60-day episode
payment or PEP adjustment for that group plus a fixed-dollar loss (FDL)
amount. The outlier payment is defined to be a proportion of the wage-
adjusted estimated cost beyond the wage-adjusted threshold. The
threshold amount is the sum of the wage and case-mix adjusted PPS
episode amount and wage-adjusted FDL amount. The proportion of
additional costs over the outlier threshold amount paid as outlier
payments is referred to as the loss-sharing ratio.
In the CY 2010 HH PPS final rule (74 FR 58080 through 58087), we
discussed excessive growth in outlier payments, primarily the result of
unusually high outlier payments in a few areas of the country. Despite
program integrity efforts associated with excessive outlier payments in
targeted areas of the country, we discovered that outlier expenditures
still exceeded the 5 percent, target and, in the absence of corrective
measures, would continue do to so. Consequently, we assessed the
appropriateness of taking action to curb outlier abuse. To mitigate
possible billing vulnerabilities associated with excessive outlier
payments and adhere to our statutory limit on outlier payments, we
adopted an outlier policy that included a 10 percent agency-level cap
on outlier payments. This cap was implemented in concert with a reduced
FDL ratio of 0.67. These policies resulted in a projected target
outlier pool of approximately 2.5 percent. (The previous outlier pool
was 5 percent of total HH expenditure). For CY 2010, we first returned
5 percent of these dollars back into the national, standardized 60-day
episode rates, the national per-visit rates, the LUPA add-on payment
amount, and the NRS conversion factor. Then, we reduced the CY 2010
rates by 2.5 percent to account for the new outlier pool of 2.5
percent. This outlier policy was adopted for CY 2010 only.
As we noted in the CY 2011 HH PPS final rule (75 FR 70397 through
70399), section 3131(b)(1) of the Affordable Care Act amended section
1895(b)(3)(C) of the Act. As amended, ``Adjustment for outliers,''
states that ``The Secretary shall reduce the standard prospective
payment amount (or amounts) under this paragraph applicable to HH
services furnished during a period by such proportion as will result in
an aggregate reduction in payments for the period equal to 5 percent of
the total payments estimated to be made based on the prospective
payment system under this subsection for the period.'' In addition,
section 3131(b)(2) of the Affordable Care Act amended section
1895(b)(5) of the Act by re-designating the existing language as
section 1895(b)(5)(A) of the Act, and revising it to state that the
Secretary, ``subject to [a 10 percent program-specific outlier cap],
may provide for an addition or adjustment to the payment amount
otherwise made in the case of outliers because of unusual variations in
the type or amount of medically necessary care. The total amount of the
additional payments or payment adjustments made under this paragraph
for a fiscal year or year may not exceed 2.5 percent of the total
payments projected or estimated to be made based on the prospective
payment system under this subsection in that year.''
As such, beginning in CY 2011, our HH PPS outlier policy is that we
reduce payment rates by 5 percent and target up to 2.5 percent of total
estimated HH PPS payments to be paid as outliers. To do so, we first
returned the 2.5 percent held for the target CY 2010 outlier pool to
the national, standardized 60-day episode rates, the national per visit
rates, the LUPA add-on payment amount, and the NRS conversion factor
for CY 2010. We then reduced the rates by 5 percent as required by
section 1895(b)(3)(C) of the Act, as amended by section 3131(b)(1) of
the Affordable Care Act. For CY 2011 and subsequent calendar years we
target up to 2.5 percent of estimated total payments to be paid as
outlier payments, and apply a 10 percent agency-level outlier cap.
2. Fixed Dollar Loss (FDL) Ratio and Loss-Sharing Ratio
For a given level of outlier payments, there is a trade-off between
the values selected for the FDL ratio and the loss-sharing ratio. A
high FDL ratio reduces the number of episodes that can receive outlier
payments, but makes it possible to select a higher loss-sharing ratio,
and therefore, increase outlier payments for qualifying outlier
episodes. Alternatively, a lower FDL ratio means that more episodes can
qualify for outlier payments, but outlier payments per episode must
then be lower.

[[Page 66093]]

The FDL ratio and the loss-sharing ratio must be selected so that
the estimated total outlier payments do not exceed the 2.5 percent
aggregate level (as required by section 1895(b)(5)(A) of the Act).
Historically, we have used a value of 0.80 for the loss-sharing ratio
which, we believe, preserves incentives for agencies to attempt to
provide care efficiently for outlier cases. With a loss-sharing ratio
of 0.80, Medicare pays 80 percent of the additional estimated costs
above the outlier threshold amount.
In the CY 2011 HH PPS final rule (75 FR 70398), in targeting total
outlier payments as 2.5 percent of total HH PPS payments, we
implemented an FDL ratio of 0.67, and we maintained that ratio in CY
2012. Simulations based on CY 2010 claims data completed for the CY
2013 HH PPS final rule showed that outlier payments were estimated to
comprise approximately 2.18 percent of total HH PPS payments in CY
2013, and as such, we lowered the FDL ratio from 0.67 to 0.45. We
stated that lowering the FDL ratio to 0.45, while maintaining a loss-
sharing ratio of 0.80, struck an effective balance of compensating for
high-cost episodes while allowing more episodes to qualify as outlier
payments (77 FR 67080). The national, standardized 60-day episode
payment amount is multiplied by the FDL ratio. That amount is wage-
adjusted to derive the wage-adjusted FDL amount, which is added to the
case-mix and wage-adjusted 60-day episode payment amount to determine
the outlier threshold amount that costs have to exceed before Medicare
will pay 80 percent of the additional estimated costs.
For this final rule, simulating payments using more complete CY
2013 claims data (as of June 30, 2014 rather than preliminary data as
of December 31, 2013) and the CY 2014 payment rates (78 FR 72304
through 72308), we estimate that outlier payments in CY 2014 would
comprise 2.00 percent of total payments. Based on simulations using CY
2013 claims data and the CY 2015 payments rates in section III.D.4 of
this final rule, we estimate that outlier payments will comprise
approximately 2.25 percent of total HH PPS payments in CY 2015.
Given the increases to the CY 2015 national per-visit payment rates
and the national, standardized 60-day episode payment rate as a result
of making the case-mix recalibration in section III.C budget neutral,
our analysis estimates an additional 0.25 percentage point increase in
outlier payments as a percent of total HH PPS payments each year that
we phase-in the rebasing adjustments described in the background
(section II.C). We estimate that by CY 2016 outlier payments as a
percent of total HH PPS payments will be approximately 2.5 percent. We
did not propose a change to the FDL ratio or loss-sharing ratio for CY
2015 as we believed that maintaining an FDL of 0.45 and a loss-sharing
ratio of 0.80 are appropriate given the percentage of outlier payments
is estimated to increase as a result of the increasing the national
per-visit amounts through the rebasing adjustments. We will continue to
monitor the percent of total HH PPS payments paid as outlier payments
to determine if future adjustments to either the FDL ratio or loss-
sharing ratio are warranted.
Although we did not propose any changes to the outlier policy, the
following is a summary of the comments we received regarding outlier
payments.
Comment: Several commenters stated that estimated outlier payments
as a percent of total payments for CY 2015 is below the `budgeted'
amount of 2.5 percent, which has `deprived' an appropriate level of
payment for those HHAs that field high-cost cases (including cases for
beneficiaries in very rural areas). These commenters further suggest
that the FDL ratio and/or loss-sharing ratio should be modified so that
estimated outlier payments as a percent of total payments would reach
2.5 percent.
Response: We did not propose a change to the FDL ratio for CY 2015
given the finalized increases to the CY 2015 national per-visit payment
rates, which our analysis estimates will yield an additional 0.25
percentage point increase in estimated outlier payments as a percent of
total HH PPS payments each year that we phase-in the rebasing
adjustments described in section II.C. We estimate that for CY 2016,
estimated outlier payments as a percent of total HH PPS payments will
increase to 2.5 percent. We note that per section 1895(b)(5)(A) of the
Act, outlier payments as a percent of total HH PPS payments ``may not
exceed 2.5 percent of the total payments projected or estimated to be
made based on the prospective payment system under this subsection in
that year''. The statute does not require us to pay out 2.5 percent of
total HH PPS payments as outlier payments; it requires us to pay no
more than 2.5 percent of total HH PPS payments as outlier payments.
Additionally, we noted that these estimates do not take in to
account any changes in utilization that may have occurred in CY 2014,
and will continue to occur in CY 2015. We are concerned that if we
decreased the FDL ratio we could potentially pay more than 2.5 percent
of estimated total payments as outlier payments and that episodes
without unusual variations in the type or amount of medically-necessary
care will qualify for outlier payments, which is contrary to the intent
of the policy. Moreover, we remain committed to addressing potentially
fraudulent activities, especially those in areas where we suspect
suspicious outlier payments (74 FR 58085). We believe that maintaining
the current thresholds supports our prudent approach in light of such
studies as those conducted by the Office of Inspector General (August
2013 Management Implications Report). We continue to examine potential
revisions to the outlier payment methodology through the current
contract with Abt Associates and will make recommendations and
revisions if necessary.
Consequently, for the above stated reasons, we believe that we
should not make any changes/revisions to our outlier payment
methodology at this time.
Comment: One commenter recommended that CMS eliminate outlier
payments in their entirety and return the 2.5 percent withhold to the
base payment rates.
Response: We believe that section 1895(b)(5)(A) of the Act allows
the Secretary the discretion as to whether or not to have an outlier
policy under the HH PPS. We plan to continue investigating whether or
not an outlier policy remains appropriate as well as ways to maintain
an outlier policy for episodes that incur unusually high costs due to
patient care needs without qualifying episodes of care that do not meet
that criteria or are potentially fraudulent. We recently awarded a
contract to Abt Associates to address any findings from the home health
study required by section 3131(d) of the Affordable Care Act, monitor
the potential impact of the rebasing adjustments and other recent
payment changes, and develop payment options to ensure ongoing access
to care for vulnerable populations. The work may include potential
revisions to the outlier payment methodology to better reflect costs of
treating Medicare beneficiaries with high levels of severity of
illness.
Comment: Several commenters stated that CMS's oversight and
monitoring of insulin injection-based outlier episodes will drive
outlier payments down as well as cause incorrect projections for future
outlier payment.
Response: As we have noted in the past (74 FR 58085), we are
committed to addressing potentially fraudulent activities, especially
those in areas where we see suspicious outlier

[[Page 66094]]

payments. As we noted above, we plan to examine potential revisions to
the outlier payment methodology through ongoing studies and analysis of
home health claims and other utilization data. Monitoring of
potentially fraudulent activity will be captured in this analysis, and
we will make policy and other adjustments as necessary in light of the
new data and outcomes.
Comment: One commenter recommended that CMS calculate outlier
payments based on actual costs rather than imputed costs.
Response: Currently, an HHA episode's estimated cost is the sum of
the national wage-adjusted per-visit payment amounts for all visits
delivered during the episode, and the outlier payment is defined to be
an estimate of the proportion of the wage-adjusted cost beyond the
wage-adjusted threshold. We believe that this estimate serves as a
valid proxy for the additional costs incurred by providers. However, in
an effort to further the agency's mission of providing accurate
payment, we continue to evaluate the effectiveness of the current
outlier payment policy approach and are considering the investigation
of alternative, cost-oriented mechanisms for determining the outlier
payment amount for HHA providers for those episodes that incur
unusually high costs due to patient care needs.
Comment: One commenter questioned CMS's current outlier approach,
which removes 5 percent from the payment rates, and then pays out 2.5
percent in outlier payments. Additionally, the commenter wanted to
understand what was done with the other 2.5 percent that is no longer
being paid to providers.
Response: Per section 1895(b)(3)(C) of the Act, as amended by
section 3131(b)(1) of the Affordable Care Act, CMS is required to
reduce payment rates by 5 percent and target up to 2.5 percent of total
estimated HH PPS payments to be paid as outliers. This provision is a
statutory requirement and thus we do not have the authority to rescind
this policy. Consequently, to implement this particular Affordable Care
Act provision, CMS reduced the standardized 60-day episode payment
amount by 5 percent, and set the FDL ratio such that it would target up
to 2.5 percent of total estimated HH PPS payments as outlier payments.
Final Decision: We are finalizing no change to the FDL ratio or
loss sharing ratio for CY 2015. However, we will continue to monitor
outlier payments and continue to explore ways to maintain an outlier
policy for episodes that incur unusually high costs due to patient care
needs without qualifying episodes of care that do not meet that
criteria.

F. Medicare Coverage of Insulin Injections Under the HH PPS

Home health policy regarding coverage of home health visits for the
sole purpose of insulin injections is limited to patients that are
physically or mentally unable to self-inject and there is no other
person who is able and willing to inject the patient.\28\ However, the
Office of Inspector General concluded in August 2013 that some
previously covered home health visits for the sole purpose of insulin
injections were unnecessary because the patient was physically and
mentally able to self-inject.\29\ In addition, results from analysis in
response to public comments on the CY 2014 HH PPS final rule found that
episodes that qualify for outlier payments in excess of $10,000 had, on
average, 160 skilled nursing visits in a 60-day episode of care with 95
percent of the episodes listing a primary diagnosis of diabetes or
long-term use of insulin (78 FR 72310). Therefore, we conducted a
literature review regarding generally accepted clinical management
practices for diabetic patients and conducted further analysis of home
health claims data to investigate the extent to which episodes with
visits likely for the sole purpose of insulin injections are in fact
limited to patients that are physically or mentally unable to self-
inject.
---------------------------------------------------------------------------

\28\ Medicare Coverage Benefit Policy Manual (Pub. 100-02),
Section 40.1.2.4.B.2 ``Insulin Injections.''
\29\ Levinson, Daniel R. Management Implication Report 12-0011,
Unnecessary Home Health Care for Diabetic Patients.
---------------------------------------------------------------------------

As generally accepted by the medical community, older patients (age
65 and older) are more likely to have impairments in dexterity,
cognition, vision, and hearing.\30\ While studies have shown that most
elderly patients starting or continuing on insulin can inject
themselves, these conditions may affect the elderly individual's
ability to self-inject insulin. It is clinically essential that there
is careful assessment prior to the initiation of home care, and
throughout the course of treatment, regarding the patient's capacity
for self-injection. There are multiple reliable and validated
assessment tools that may be used to assess the elderly individual's
ability to self-inject. These tools assess the individual's ability to
perform activities of daily living (ADLs), as well as, cognitive,
functional, and behavioral status.\31\ These assessment tools have also
proved valid for judging patients' ability to inject insulin
independently and to recognize and deal with hypoglycemia.\32\
---------------------------------------------------------------------------

\30\ Strategies for Insulin Injection Therapy in Diabetes Self-
Management. (2011). American Association of Diabetes Educators.
\31\ Hendra, T.J. Starting insulin therapy in elderly patients.
(2012). Journal of the Royal Society of Medicine. 95(9), 453-455.
\32\ Sinclair AJ, Turnbull CJ, Croxson SCM. Document of care for
older people with diabetes. Postgrad Med J 1996;72: 334-8.
---------------------------------------------------------------------------

Another important consideration with regard to insulin
administration in the elderly population is the possibility of dosing
errors.\33\ Correct administration and accurate dosing is important in
order to prevent serious complications, such as hypoglycemia and
hyperglycemia. The traditional vial and syringe method of insulin
administration involves several steps, including injecting air into the
vial, drawing an amount out of the vial into a syringe with small
measuring increments, and verifying the correct dose visually.\34\ In
some cases, an insulin pen can be used as an alternative to the
traditional vial and syringe method.
---------------------------------------------------------------------------

\33\ Coscelli C, Lostia S, Lunetta M, Nosari I, Coronel GA.
Safety, efficacy, acceptability of a pre-filled insulin pen in
diabetic patients over 60 years old. Diabetes Research and Clinical
Practice. 1995;38:173-7.[PubMed].
\34\ Flemming DR. Mightier than the syringe. Am J Nurs.
2000;100:44-8.[PubMed].
---------------------------------------------------------------------------

Insulin pens are designed to facilitate easy self-administration,
the possession of which would suggest the ability to self-inject.
Additionally, insulin pens often come pre-filled with insulin or must
be used with a pre-filled cartridge thus potentially negating the need
for skilled nursing for the purpose of calculating and filling
appropriate doses. It is recognized that visual impairment, joint
immobility and/or pain, peripheral neuropathy, and cognitive issues may
affect the ability of elderly patients to determine correct insulin
dosing and injection. Our literature review indicates that insulin pen
devices may be beneficial in terms of safety for elderly patients due
to these visual or physical disabilities.\35\ To determine whether to
use a traditional vial and syringe method of insulin administration
versus an insulin pen, the physician must consider and understand the
advantages these devices offer over traditional vials and syringes.
These advantages include:
---------------------------------------------------------------------------

\35\ Wright, B., Bellone, J., McCoy, E. (2010). A review of
insulin pen devices and use in elderly, diabetic population.
Clinical Medicine Insights: Endocrinology and Diabetes. 3:53-63.
Doi: 10.4137/CMED.S5534.
---------------------------------------------------------------------------

Convenience, as the insulin pen eliminates the need to
draw up a dose;

[[Page 66095]]

Greater dose accuracy and reliability, especially for low
doses which are often needed in the elderly;
Sensory and auditory feedback associated with the dial
mechanism on many pens may also benefit those with visual impairments;
Pen devices are also more compact, portable and easier to
grip, which may benefit those with impairments in manual dexterity; and
Less painful injections and overall ease of use.\36\
---------------------------------------------------------------------------

\36\ Wright, B., Bellone, J., McCoy, E. (2010). A review of
insulin pen devices and use in elderly, diabetic population.
Clinical Medicine Insights: Endocrinology and Diabetes. 3:53-63.
Doi: 10.4137/CMED.S5534.
---------------------------------------------------------------------------

Although pen devices are often perceived to be more costly than
vialed insulin, study results indicate that elderly diabetic patients
are more likely to accept pen devices and adhere to therapy, which
leads to better glycemic control that decreases long-term complications
and associated healthcare costs.\37\ The significantly improved safety
profiles of pen devices also avert costly episodes of hypoglycemia.\38\
It also should be noted that most insurance plans, including Medicare
Part D plans, charge the patient the same amount for a month supply of
insulin in the pen device as insulin in the vial.\39\ Additionally, in
some cases the individual with coverage for insulin pens may have one
co-pay, resulting in getting more insulin than if purchasing a vial.
And, there is less waste with pens because insulin vials should be
discarded after 28 days after opening. However, there may be clinical
reasons for the use of the traditional vial and insulin syringe as
opposed to the insulin pen, including the fact that not all insulin
preparations are available via insulin pen. In such circumstances,
there are multiple assistive aids and devices to facilitate self-
injection of insulin for those with cognitive or functional
limitations. These include: nonvisual insulin measurement devices;
syringe magnifiers; needle guides; prefilled insulin syringes; and vial
stabilizers to help ensure accuracy and aid in insulin delivery.\40\ It
is expected that providers will assess the needs, abilities, and
preference of the patient requiring insulin to facilitate patient
autonomy, efficiency, and safety in diabetes self-management, including
the administration of insulin.
---------------------------------------------------------------------------

\37\ Strategies for Insulin Injection Therapy in Diabetes Self-
Management. (2011). American Association of Diabetes Educators.
\38\ Strategies for Insulin Injection Therapy in Diabetes Self-
Management. (2011). American Association of Diabetes Educators.
\39\ Wright, B., Bellone, J., McCoy, E. (2010). A review of
insulin pen devices and use in elderly, diabetic population.
Clinical Medicine Insights: Endocrinology and Diabetes. 3:53-63.
Doi: 10.4137/CMED.S5534.
\40\ Strategies for Insulin Injection Therapy in Diabetes Self-
Management. (2011). American Association of Diabetes Educators.
---------------------------------------------------------------------------

Further research regarding self-injection of insulin, whether via a
vial and syringe method or insulin pen, shows that education for
starting insulin and monitoring should be provided by a diabetes nurse
specialist, and typically entails 5 to 10 face-to-face contacts either
in the patient's home or at the diabetes clinic; these are in addition
to telephone contacts to further reinforce teaching and to answer
patient questions.\41\ This type of assessment and education allows for
patient autonomy and self-efficiency and is often a preferred mode for
diabetes self-management.
---------------------------------------------------------------------------

\41\ Hendra, T.J. Starting insulin therapy in elderly patients.
(2012). Journal of the Royal Society of Medicine. 95(9), 453-455.
https://www.ncbi.nlm.nih.gov.
---------------------------------------------------------------------------

In the CY 2014 HH PPS final rule (78 FR 72256), we noted that the
Office of Inspector General (OIG) released a ``Management Implications
Report'' in August of 2013 that concluded that there was a ``systemic
weakness that results in Medicare coverage of unnecessary home health
care for diabetic patients''. The OIG report noted that investigations
show that the majority of beneficiaries involved in fraudulent schemes
have a primary diagnosis of diabetes. The report noted that OIG Special
Agents found falsified medical records documenting patients having hand
tremors and poor vision preventing them from drawing insulin into a
syringe, visually verifying the correct dosage, and injecting the
insulin themselves, when the patients did not in fact suffer those
symptoms.
In light of the OIG report, we conducted analysis and performed
simulations using CY 2012 claims data and described our findings in the
CY 2014 Home Health PPS Final Rule (78 FR 72310). We found that nearly
44 percent of the episodes that would qualify for outlier payments had
a primary diagnosis of diabetes and 16 percent of episodes that would
quality for outlier payments had a primary diagnosis of ``Diabetes
mellitus without mention of complication, type II or unspecified type,
not stated as uncontrolled.'' Qualifying for outlier payments should
indicate an increased resource and service need. However, uncomplicated
and controlled diabetes typically would be viewed as stable without
clinical complications and would not warrant increased resource and
service needs nor would it appear to warrant outlier payments. Our
simulations estimated that approximately 81 percent of outlier payments
would be paid to proprietary HHAs and that approximately two-thirds of
outlier payments would be paid to HHAs located in Florida (27 percent),
Texas (24 percent) and California (15 percent). We also conducted
additional analyses on episodes in our simulations that would have
resulted in outlier payments of over $10,000. Of note, 95 percent of
episodes that would have resulted in outlier payments of over $10,000
were for patients with a primary diagnosis of diabetes or long-term use
of insulin, and most were concentrated in Florida, Texas, New York,
California, and Oklahoma. On average, these outlier episodes had 160
skilled nursing visits in a 60-day episode of care.\42\
---------------------------------------------------------------------------

\42\ This analysis simulated payments using CY 2012 claims data
and CY 2012 payment rates. The simulations did not take into account
the 10-percent outlier cap. Some episodes may have qualified for
outlier payments in the simulations, but were not paid accordingly
if the HHA was at or over its 10 percent cap on outlier payments as
a percent of total payments.
---------------------------------------------------------------------------

Based upon the initial data analysis described above and the
information found in the literature review, we conducted further data
analysis with more recent home health claims and OASIS data (CY 2012
and CY 2013) to expand our understanding of the diabetic patient in the
home health setting. Specifically, we investigated the extent to which
beneficiaries with a diabetes-related principal diagnosis received home
health services likely for the primary purpose of insulin injection
assistance and whether such services were warranted by other documented
medical conditions. We also analyzed the magnitude of Medicare payments
associated with home health services provided to this population of
interest. The analysis was conducted by Acumen, LLC because of their
capacity to provide real-time claims data analysis across all parts of
the Medicare program (that is, Part A, Part B, and Part D).
Our analysis began with identifying episodes for the home health
diabetic population based on claims and OASIS assessments most likely
to be associated with insulin injection assistance. We used the
following criteria to identify the home health diabetic population of
interest: (1) A diabetic condition listed as the principal/primary
diagnosis on the home health claim; (2) Medicare Part A or Part B
enrollment for at least three months prior to the episode and during
the episode; and (3) episodes with at least 45 skilled visits. This
threshold was determined based on the

[[Page 66096]]

distribution in the average number and length of skilled nursing visits
for episodes meeting criteria 1 and 2 above using CY 2013 home health
claims data. The average number of skilled nursing visits for
beneficiaries who receive at least one skilled nursing visit appeared
to increase from 20 visits at the 90th percentile, to 50 visits at the
95th percentile. Additionally, the average length of a skilled nursing
visit for episodes between the 90th and 95th percentiles was 37
minutes, less than half the length of visits for episode between the
75th and 90th percentiles.
Approximately 49,100 episodes met the study population criteria
described above, accounting for approximately $298 million in Medicare
home health payments in CY 2013. Of the 49,100 episodes of interest, 71
percent received outlier payments and, on average, there were 86
skilled nursing visits per episode. In addition, 12 percent of the
episodes in the study population were for patients prescribed an
insulin pen to self-inject and more than half of the episodes billed
(27,439) were for claims that listed ICD-9-CM 2500x, ``Diabetes
Mellitus without mention of complication'', as the principal diagnosis
code. ICD-9-CM describes the code 250.0x as diabetes mellitus without
mention of complications (complications can include hypo- or
hyperglycemia, or manifestations classified as renal, ophthalmic,
neurological, peripheral circulatory damage or neuropathy). Clinically,
this code generally means that the diabetes is being well-controlled
and there are no apparent complications or symptoms resulting from the
diabetes. Diabetes that is controlled and without complications does
not warrant intensive intervention or daily skilled nursing visits;
rather, it warrants knowledge of the condition and routine monitoring.
As discussed above in this section, the traditional vial and
syringe method of insulin administration is one of two methods of
insulin administration (excluding the use of insulin pumps). The
alternative to the traditional vial and syringe method is the use of
insulin pens. It would seem to be a reasonable assumption that the
possession of a prescribed insulin pen would suggest the ability to
self-inject. Since insulin pens often come pre-filled with insulin or
must be used with a pre-filled cartridge, we believe there would not be
a need for skilled nursing for the purpose of insulin injection
assistance. We expect providers to assess the needs, abilities, and
preference of the patient requiring insulin to facilitate patient
autonomy, efficiency, and safety in diabetes self-management, including
the administration of insulin. As noted above, approximately 12 percent
of the episodes in the study population with visits likely for the
purpose of insulin injection assistance were for patients prescribed an
insulin pen to self-inject, which would seem to not conform to our
current policy that home health visits for the sole purpose of insulin
injection assistance is limited to patients that are physically or
mentally unable to self-inject and there is no other person who is able
and willing to inject the patient.
Furthermore, we recognize that our current sub-regulatory guidance
may not adequately address the method of delivery. We are considering
additional guidance that may be necessary surrounding insulin injection
assistance provided via a pen based upon our analyses described above.
We have found that literature supports that insulin pens may reduce
expenses for the patient in the form of co-pays and may increase
patient adherence to their treatment plan. Therefore, we encourage
physicians to consider the potential benefits derived in prescribing
insulin pens, when clinically appropriate, given the patient's
condition.
We also investigated whether secondary diagnosis codes listed on
home health claims support that the patient, either for physical or
mental reasons, cannot self-inject. Our contractor, Abt Associates,
with review and clinical input from CMS clinical staff and experts,
created a list of ICD-9-CM codes that indicate a patient has
impairments in dexterity, cognition, vision, and/or hearing that may
cause the patient to be unable to self-inject insulin. We found that 49
percent of home health episodes in our study population did not have a
secondary diagnosis from that ICD-9-CM code list on the home health
claim that supported that the patient was physically or mentally unable
to self-inject. When examining only the initial home health episodes of
our study population, we found that 67 percent of initial home health
episodes with skilled nursing visits likely for insulin injections did
not have a secondary diagnosis on the home health claim that supported
that the patient was physically or mentally unable to self-inject.
Using the same list of ICD-9-CM diagnosis codes, we examined both the
secondary diagnoses on the home health claim and diagnoses on non-home
health claims in the three months prior to starting home health care
for initial home health episodes. We found that for initial home health
episodes in our study population that the percentage of episodes that
did not have a secondary diagnosis to support that the patient cannot
self-inject would decrease from 67 percent to 47 percent if the home
health claim included diagnoses found in other claim types during the
three months prior to entering home care. We do recognize that, in
spite of all of the education, assistive devices and support, there may
still be those who are unable to self-inject insulin and will require
ongoing skilled nursing visits for insulin administration assistance.
However, there is an expectation that the physician and the HHA would
clearly document detailed clinical findings and rationale as to why an
individual is unable to self-inject, including the reporting of an
appropriate secondary condition that supports the inability of the
patient to self-inject.
As described above, a group of CMS clinicians and contractor
clinicians developed a list of conditions that would support the need
for ongoing home health skilled nursing visits for insulin injection
assistance for instances where the patient is physically or mentally
unable to self-inject and there is no able or willing caregiver to
provide assistance. We expect the conditions included in Table 34 to be
listed on the claim and OASIS to support the need for skilled nursing
visits for insulin injection assistance.
Table 34: ICD-9-CM Diagnosis Codes That Indicate a Potential
Inability to Self-Inject Insulin

Table 34--ICD-9-CM Diagnosis Codes That Indicate a Potential Inability
to Self-Inject Insulin
------------------------------------------------------------------------
ICD-9-CM Code Description
------------------------------------------------------------------------
Amputation
------------------------------------------------------------------------
V49.61................... Thumb Amputation Status.
V49.63................... Hand Amputation Status.

[[Page 66097]]

V49.64................... Wrist Amputation Status.
V49.65................... Below elbow amputation status.
V49.66................... Above elbow amputation status.
V49.67................... Shoulder amputation status.
885.0.................... Traumatic amputation of thumb w/o mention of
complication.
885.1.................... Traumatic amputation of thumb w/mention of
complication.
886.0.................... Traumatic amputation of other fingers w/o
mention of complication.
886.1.................... Traumatic amputation of other fingers w/
mention of complication.
887.0.................... Traumatic amputation of arm and hand,
unilateral, below elbow w/o mention of
complication.
887.1.................... Traumatic amputation of arm and hand,
unilateral, below elbow, complicated.
887.2.................... Traumatic amputation of arm and hand,
unilateral, at or above elbow w/o mention of
complication.
887.3.................... Traumatic amputation of arm and hand,
unilateral, at or above elbow, complicated.
887.4.................... Traumatic amputation of arm and hand,
unilateral, level not specified, w/o mention
of complication.
887.5.................... Traumatic amputation of arm and hand,
unilateral, level not specified,
complicated.
887.6.................... Traumatic amputation of arm and hand,
bilateral, any level, w/o mention of
complication.
887.7.................... Traumatic amputation of arm and hand,
bilateral, any level, complicated.
------------------------------------------------------------------------
Vision
------------------------------------------------------------------------
362.01................... Background diabetic retinopathy.
362.50................... Macular degeneration (senile) of retina
unspecified.
362.51................... Nonexudative senile macular degeneration of
retina.
362.52................... Exudative senile macular degeneration of
retina.
362.53................... Cystoid macular degeneration of retina.
362.54................... Macular cyst hole or pseudohole of retina.
362.55................... Toxic maculopathy of retina.
362.56................... Macular puckering of retina.
362.57................... Drusen (degenerative) of retina.
366.00................... Nonsenile cataract unspecified.
366.01................... Anterior subcapsular polar nonsenile
cataract.
366.02................... Posterior subcapsular polar nonsenile
cataract.
366.03................... Cortical lamellar or zonular nonsenile
cataract.
366.04................... Nuclear nonsenile cataract.
366.09................... Other and combined forms of nonsenile
cataract.
366.10................... Senile cataract unspecified.
366.11................... Pseudoexfoliation of lens capsule.
366.12................... Incipient senile cataract.
366.13................... Anterior subcapsular polar senile cataract.
366.14................... Posterior subcapsular polar senile cataract.
366.15................... Cortical senile cataract.
366.16................... Senile nuclear sclerosis.
366.17................... Total or mature cataract.
366.18................... Hypermature cataract.
366.19................... Other and combined forms of senile cataract.
366.20................... Traumatic cataract unspecified.
366.21................... Localized traumatic opacities.
366.22................... Total traumatic cataract.
366.23................... Partially resolved traumatic cataract.
366.8.................... Other cataract.
366.9.................... Unspecified cataract.
366.41................... Diabetic cataract.
366.42................... Tetanic cataract.
366.43................... Myotonic cataract.
366.44................... Cataract associated with other syndromes.
366.45................... Toxic cataract.
366.46................... Cataract associated with radiation and other
physical influences.
366.50................... After-cataract unspecified.
369.00................... Impairment level not further specified.
369.01................... Better eye: total vision impairment; lesser
eye: total vision impairment.
369.10................... Moderate or severe impairment, better eye,
impairment level not further specified.
369.11................... Better eye: severe vision impairment; lesser
eye: blind not further specified.
369.13................... Better eye: severe vision impairment; lesser
eye: near-total vision impairment.
369.14................... Better eye: severe vision impairment; lesser
eye: profound vision impairment.
369.15................... Better eye: moderate vision impairment;
lesser eye: blind not further specified.
369.16................... Better eye: moderate vision impairment;
lesser eye: total vision impairment.
369.17................... Better eye: moderate vision impairment;
lesser eye: near-total vision impairment.
369.18................... Better eye: moderate vision impairment;
lesser eye: profound vision impairment.
369.20................... Moderate to severe impairment; Low vision
both eyes not otherwise specified.
369.21................... Better eye: severe vision impairment; lesser
eye; impairment not further specified.
369.22................... Better eye: severe vision impairment; lesser
eye: severe vision impairment.
369.23................... Better eye: moderate vision impairment;
lesser eye: impairment not further
specified.

[[Page 66098]]

369.24................... Better eye: moderate vision impairment;
lesser eye: severe vision impairment.
369.25................... Better eye: moderate vision impairment;
lesser eye: moderate vision impairment.
369.3.................... Unqualified visual loss both eyes.
369.4.................... Legal blindness as defined in U.S.A.
377.75................... Cortical blindness.
379.21................... Vitreous degeneration.
379.23................... Vitreous hemorrhage.
------------------------------------------------------------------------
Cognitive/Behavioral
------------------------------------------------------------------------
290.0.................... Senile dementia uncomplicated.
290.3.................... Senile dementia with delirium.
290.40................... Vascular dementia, uncomplicated.
290.41................... Vascular dementia, with delirium.
290.42................... Vascular dementia, with delusions.
290.43................... Vascular dementia, with depressed mood.
294.11................... Dementia in conditions classified elsewhere
with behavioral disturbance.
294.21................... Dementia, unspecified, with behavioral
disturbance.
300.29................... Other isolated or specific phobias.
331.0.................... Alzheimer's disease.
331.11................... Pick's disease.
331.19................... Other frontotemporal dementia.
331.2.................... Senile degeneration of brain.
331.82................... Dementia with lewy bodies.
------------------------------------------------------------------------
Arthritis
------------------------------------------------------------------------
715.11................... Osteoarthrosis localized primary involving
shoulder region.
715.21................... Osteoarthrosis localized secondary involving
shoulder region.
715.31................... Osteoarthrosis localized not specified
whether primary or secondary involving
shoulder region.
715.91................... Osteoarthrosis unspecified whether
generalized or localized involving shoulder
region.
715.12................... Osteoarthrosis localized primary involving
upper arm.
715.22................... Osteoarthrosis localized secondary involving
upper arm.
715.32................... Osteoarthrosis localized not specified
whether primary or secondary involving upper
arm.
715.92................... Osteoarthrosis unspecified whether
generalized or localized involving upper
arm.
715.13................... Osteoarthrosis localized primary involving
forearm.
715.23................... Osteoarthrosis localized secondary involving
forearm.
715.33................... Osteoarthrosis localized not specified
whether primary or secondary involving
forearm.
715.93................... Osteoarthrosis unspecified whether
generalized or localized involving forearm.
715.04................... Osteoarthrosis generalized involving hand.
715.14................... Osteoarthrosis localized primary involving
hand.
715.24................... Osteoarthrosis localized secondary involving
hand.
715.34................... Osteoarthrosis localized not specified
whether primary or secondary involving hand.
715.94................... Osteoarthrosis unspecified whether
generalized or localized involving hand.
716.51................... Unspecified polyarthropathy or polyarthritis
involving shoulder region.
716.52................... Unspecified polyarthropathy or polyarthritis
involving upper arm.
716.53................... Unspecified polyarthropathy or polyarthritis
involving forearm.
716.54................... Unspecified polyarthropathy or polyarthritis
involving hand.
716.61................... Unspecified monoarthritis involving shoulder
region.
716.62................... Unspecified monoarthritis involving upper
arm.
716.63................... Unspecified monoarthritis involving forearm.
716.64................... Unspecified monoarthritis involving hand.
716.81................... Other specified arthropathy involving
shoulder region.
716.82................... Other specified arthropathy involving upper
arm.
716.83................... Other specified arthropathy involving
forearm.
716.84................... Other specified arthropathy involving hand.
716.91................... Unspecified arthropathy involving shoulder
region.
716.92................... Unspecified arthropathy involving upper arm.
716.93................... Unspecified arthropathy involving forearm.
716.94................... Unspecified arthropathy involving hand.
716.01................... Kaschin-Beck disease shoulder region.
716.02................... Kaschin-Beck disease upper arm.
716.04................... Kaschin-Beck disease forarm.
716.04................... Kaschin-beck disease involving hand.
719.81................... Other specified disorders of joint of
shoulder region.
719.82................... Other specified disorders of upper arm joint.
719.83................... Other specified disorders of joint, forearm.
719.84................... Other specified disorders of joint, hand.
718.41................... Contracture of joint of shoulder region.
718.42................... Contracture of joint, upper arm.
718.43................... Contracture of joint, forearm.

[[Page 66099]]

718.44................... Contracture of hand joint.
714.0.................... Rheumatoid arthritis.
------------------------------------------------------------------------
Movement Disorders
------------------------------------------------------------------------
332.0.................... Paralysis agitans (Parkinson's).
332.1.................... Secondary parkinsonism.
333.1.................... Essential and other specified forms of
tremor.
736.05................... Wrist drop (acquired).
------------------------------------------------------------------------
After Effects from Stroke/Other Disorders of the Central Nervous System/
Intellectual Disabilities
------------------------------------------------------------------------
438.21................... Hemiplegia affecting dominant side.
438.22................... Hemiplegia affecting nondominant side.
342.01................... Flaccid hemiplegia and hemiparesis affecting
dominant side.
342.02................... Flaccid hemiplegia and hemiparesis affecting
nondominant side.
342.11................... Spastic hemiplegia and hemiparesis affecting
dominant side.
342.12................... Spastic hemiplegia and hemiparesis affecting
nondominant side.
438.31................... Monoplegia of upper limb affecting dominant
side.
438.32................... Monoplegia of upper limb affecting
nondominant side.
343.3.................... Congenital monoplegia.
344.41................... Monoplegia of upper limb affecting dominant
side.
344.42................... Monoplegia of upper limb affecting
nondominant side.
344.81................... Locked-in state.
344.00................... Quadriplegia unspecified.
344.01................... Quadriplegia c1-c4 complete.
344.02................... Quadriplegia c1 c4 incomplete.
344.03................... Quadriplegia c5-c7 complete.
344.04................... Quadriplegia c5-c7 incomplete.
343.0.................... Congenital diplegia.
343.2.................... Congenital quadriplegia.
344.2.................... Diplegia of upper limbs.
318.0.................... Moderate intellectual disabilities.
318.1.................... Severe intellectual disabilities.
318.2.................... Profound intellectual disabilities.
------------------------------------------------------------------------

Although we did not propose any policy changes at this time, we
solicited public comments on whether the conditions in Table 34
represent a comprehensive list of codes that appropriately indicate
that a patient may not be able to self-inject and solicited comments on
the use of insulin pens in home health. We plan to continue monitoring
claims that are likely for the purpose of insulin injection assistance.
Historical evidence in the medical record must support the clinical
legitimacy of the secondary condition(s) and resulting disability that
limit the beneficiary's ability to self-inject.
The following is a summary of the comments we received regarding
our discussion of Medicare Coverage of Insulin Injections under HH PPS.
Comment: A few commenters provided additional ICD-9-CM codes that
CMS should consider as supporting the need for insulin injections
because a patient cannot self-inject.
Response: We thank the commenters for identifying additional ICD-9-
CM codes for us to consider. The ICD-9-CM codes that were identified by
the commenters will be reviewed by our clinical staff and our
contractors and will be taken into consideration in developing any
future sub-regulatory guidance on insulin injections.
Comment: Many commenters noted their general support of a
comprehensive list of codes that appropriately indicate that a patient
may not be able to self-inject. However, several commenters also
suggested that CMS develop guidelines that are evidenced-based along
with clinical and practical reasoning. A few commenters suggested that
the evidence-based guidelines should be developed through the National
Coverage Determination process, with presumptive eligibility or
ineligibility, and an opportunity for the patient or HHA to rebut the
presumption of ineligibility prior to denial of coverage.
Response: The list of codes included in the proposed rule was not
designed to provide guidelines for determining eligibility for insulin
injections during a home health episode. Rather, the list of codes was
designed to identify conditions that support the need for home health
skilled nursing visits for insulin injection assistance when the
patient is physically or mentally unable to self-inject and there is no
able or willing caregiver to provide assistance. The National Coverage
Determination process describes whether specific medical items,
services, treatment procedures, or technologies can be paid for under
Medicare. Under current policy, insulin injection assistance can be
paid for under the Medicare home health benefit. Therefore, a National
Coverage Determination is not necessary for insulin injections provided
within a home health episode of care.
Comment: One commenter stated that it is sometimes difficult to
specify a single condition that describes why the patient cannot self-
inject. The commenter also stated that the list of codes was developed
using ICD-9-CM codes, which will be obsolete in the future given the
expansion of codes available under ICD-10-CM. One commenter suggested
that we convene stakeholders after ICD-10-CM is implemented to
determine a comprehensive list based on ICD-10-CM codes.

[[Page 66100]]

Response: The list of codes that appropriately indicate that a
patient may not be able to self-inject was developed based on codes
currently available and is aimed at assisting providers and contractors
in identifying diabetic patients who may not be able self-inject
insulin. The list of codes is not designed to limit the provider's
ability to demonstrate the necessity for insulin injections based on
other information in the medical record. We agree that there may be
more codes available under ICD-10-CM and plan to appropriately
crosswalk the list of ICD-9-CM codes to ICD-10-Codes. We would like to
note that the ICD-9-CM codes are listed in this rule because they are
currently the official code set for home health claims. In addition,
convening a stakeholder panel to create a comprehensive list of ICD-10-
CM codes is not necessary. Any sub-regulatory guidance issued would
include this list of ICD-9-CM codes appropriately translated into ICD-
10-CM codes developed using the general equivalency mapping software
and the clinical judgment of our clinicians and contractor clinicians.
Comment: One commenter noted that CMS should not consider a future
proposal to use a list of conditions as the single means of
establishing coverage eligibility for insulin injections. Many
commenters stated that any sub-regulatory guidance that identifies
conditions that support a patient's inability to self-inject will
result in the inaccurate denial of coverage for insulin injections thus
placing the beneficiary at risk.
Response: The discussion surrounding insulin injections was
included in the rule to invite public comment and gather industry input
on potential sub-regulatory guidance on this issue. We did not propose
that the list of codes identified in the CY 2015 HH PPS proposed and
final rules would as the sole means of establishing coverage
eligibility for insulin injection assistance under the Medicare home
health benefit. Rather, we identified these conditions as a means for
providers and contractors to identify patients who may not be able to
self-inject insulin.
Comment: One commenter stated that they are concerned they will be
required to ``screen'' patients and as such, the patient may not be
afforded appeal rights.
Response: We will take this opportunity to remind HHAs that they
are not to enroll patients that do not meet the eligibility criteria
for home health services. A patient that has been determined to be
ineligible by a HHA has the right to ask for a review of eligibility by
the Quality Improvement Organization.
Comment: A commenter noted a concern that ``Attachment D'' does not
permit the HHA to report diagnoses that do not require interventions on
the OASIS (and subsequently the home health claim), thus precluding the
home health agency from reporting one of these supporting diagnoses.
Response: ``Attachment D'' guidance requires that secondary
diagnoses reported be addressed in the home health plan of care. The
focus of this discussion surrounds home health visits for the sole
purpose of insulin injections. If the patient requires home health
services for the sole purpose of insulin injections, it appears logical
for these services to be reported in the plan of care and require
interventions that may be supported by the reporting of the appropriate
diagnosis that prevents the patient from self-injecting. Additionally,
ICD-9-CM and ICD-10-CM coding guidelines state ``for reporting purposes
the definition for ``other diagnoses'' is interpreted as additional
conditions that affect patient care in terms of requiring: Clinical
evaluation; or therapeutic treatment; or diagnostic procedures; or
extended length of hospital stay; or increased nursing care and/or
monitoring.'' Therefore, reporting a diagnosis that supports the reason
for daily nursing visits for insulin injections would be in adherence
with ICD-9-CM and ICD-10-CM coding guidelines, even if that condition
is not the primary reason for the home health encounter. Because that
condition is affecting the home health plan of care with the need for
daily skilled nursing visits for insulin injections, it would be
appropriate to list that diagnosis on the OASIS as well as on the home
health claim.
Comment: One commenter noted that CMS should consider a range of
clinical reasons that indicate a patient may not be able to self-
inject, which may or may not relate to the diagnosis associated with
the current home health episode. The commenter provided an example of
an amputation or a cognitive defect stemming from a prior stroke.
Response: We have not proposed a policy that limits coverage to a
list of conditions that would indicate why a home health beneficiary is
unable to self-inject. We recognize that there can be a wide range of
reasons and multiple reasons why a beneficiary is unable to self-
inject. The list of diagnoses in the CY 2015 HH PPS proposed and final
rule was determined, through clinical review, to support reasons why a
skilled nurse would have to administer a daily insulin injection(s). In
the commenter's scenario, if an amputation or cognitive defect
necessitates that a skilled nurse administer insulin injection(s), then
those conditions would be related to the reason the patient needs home
health care. The presence of such conditions could indicate why there
is the need for the skilled nurse to provide the injection(s), even
though the insulin injection itself is for the treatment and management
of diabetes. If any of the diagnoses listed in the CY 2015 HH PPS
proposed and final rules are the reason(s) for the inability for the
beneficiary to self-inject, then it is appropriate for the home health
agency to report these conditions as they would meet the ICD-9-CM and
ICD-10-CM coding guidelines to report those conditions on the OASIS and
home health claim. We would also note that the examples provided of an
amputation or cognitive defect were included in our list of conditions
that may support that a patient is unable to self-inject insulin.
We thank the commenters for providing us with their feedback and
will use the information collected to inform any sub-regulatory
guidance. We will also continue to monitor home health claims likely
for visits to provide insulin injection assistance and we remind
providers that historical evidence in the medical record must support
the patient's inability to self-inject.

G. Implementation of the International Classification of Diseases, 10th
Revision, Clinical Modification (ICD-10-CM)

On April 1, 2014, the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93) was enacted. Section 212 of the PAMA, titled
``Delay in Transition from ICD-9 to ICD-10 Code Sets,'' provides that
``[t]he Secretary of Health and Human Services may not, prior to
October 1, 2015, adopt ICD-10 code sets as the standard for code sets
under section 1173(c) of the Social Security Act (42 U.S.C. 1320d-2(c))
and Sec. 162.1002 of title 45, Code of Federal Regulations.'' Since
the release of the CY 2015 HH PPS proposed rule (79 FR 38366-38420),
HHS has finalized the new compliance date for ICD-10-CM and ICD-10-PCS.
The August 4, 2014 final rule titled ``Administrative Simplification:
Change to the Compliance Date for the International Classification of
Diseases, 10th Revision (ICD-10-CM and ICD-10-PCS Medical Data Code
Sets'' (79 FR 45128) announced October 1, 2015 as the compliance date.
Under that final rule, the transition to ICD-10-CM is required for
entities covered by the Health

[[Page 66101]]

Insurance Portability and Accountability Act of 1996 (HIPAA)(Pub. L.
104-91, enacted on August 21, 1996). The rule also requires covered
entities to continue using ICD-9 through September 30, 2015. Diagnosis
reporting on home health claims must adhere to ICD-9-CM coding
conventions and guidelines regarding the selection of principal
diagnosis and the reporting of additional diagnoses until that time.
The current ICD-9-CM Coding Guidelines refer to the use of the
International Classification of Diseases, 9th Revision, Clinical
Modification (ICD-9-CM) and are available through the CMS Web site at:
https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ or on the CDC's Web site at https://www.cdc.gov/nchs/icd/icd9cm.htm. We plan to disseminate more information about the
transition from ICD-9-CM to ICD-10-CM through the HHA Center Web site,
the Home Health, Hospice and DME Open Door Forum, and in future
rulemaking.
The following is a summary of the comments we received regarding
the implementation of the International Classification of Diseases,
10th Revision, Clinical Modification (ICD-10-CM).
Comment: One commenter stated that certain codes were not included
in the translation list provided in last year's rule and attributed the
omission to the limitations of our GEMS tool.
Response: The CY 2015 HH PPS proposed rule did not contain a
discussion of the translation list. Rather, the translation list was
discussed in the CY 2014 HH PPS proposed and final rules. We invite
further comments on the translation list, which should be submitted via
email to grouperemail@mmm.com. We will review the comments and provide
a response.
Comment: Several commenters suggested that CMS post ICD-10-CM
information and the grouper in an expedited manner to afford additional
lead time to make the system changes that support ICD-10-CM submission
effective October 1, 2015.
Response: We plan to adjust our schedule to provide additional lead
time. The CY 2014 HH PPS final rule (77 FR 67450-67531) announced a
grouper release date in July 2014, providing three months lead time
when the previous implementation date was October 1, 2014. We are
adjusting our scheduled to release the ICD-10-CM HH PPS Grouper on
April 1, 2015, which provides six months of lead time for HHAs and
vendors to prepare for the transition to an ICD-10-CM HH PPS Grouper.
In addition, we are planning to conduct additional outreach activities
that will be announced in the future.
As background, CMS and our support contractors, Abt Associates and
3M, spent over 2 years implementing a process for the transition from
the use of ICD-9-CM diagnosis codes to ICD-10-CM diagnosis codes within
the HH PPS Grouper and outlined the process in the CY 2014 HH PPS
proposed and final rules. No additional changes have been identified
since that time and no additional ICD-10-CM codes have been added that
would cause us to revise the grouper that was designed based on the CY
2014 HH PPS final rule.
The final translation list (which includes all of the codes listed
in the draft posted to the CMS Web site) will be posted to the Home
Health section of the CMS Web site. A draft ICD-10-CM HH PPS Grouper
will be released on or before January 1, 2015 to our vendors that have
registered as beta-testers. Beta-testers are again being reminded to
provide any comments or feedback within 2 weeks of receipt based upon
the processed outlined on the CMS Web site. The purpose of an early
release to the beta testers is to identify any significant issues early
in the process. Providers who are interested in enrolling as a beta
site can obtain more information on the HH PPS Grouper Web site at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/CaseMixGrouperSoftware.html. As we noted above, the final
ICD-10-CM HH PPS Grouper will be posted via the CMS Web site by April
1, 2015. As we are providing three months of additional lead-time,
providers should take advantage of this time to prepare their systems
to submit ICD-10-CM codes for any services that reflect a date of
October 1, 2015 and later for item M0090 on the OASIS. Item M0090 is
the assessment completion date reported by the HHA on the OASIS and the
grouper logic requires that any assessment with a M0090 date on or
after October 1, 2015 contain ICD-10-CM codes.

H. Proposed Change to the Therapy Reassessment Timeframes

Effective January 1, 2011, therapy reassessments must be performed
on or ``close to'' the 13th and 19th therapy visits and at least once
every 30 days (75 FR 70372). A qualified therapist, of the
corresponding discipline for the type of therapy being provided, must
functionally reassess the patient using a method which would include
objective measurement. The measurement results and corresponding
effectiveness of the therapy, or lack thereof, must be documented in
the clinical record. We anticipated that policy regarding therapy
coverage and therapy reassessments would address payment
vulnerabilities that have led to high use and sometimes overuse of
therapy services. We also discussed our expectation that this policy
change would ensure more qualified therapist involvement for
beneficiaries receiving high amounts of therapy. In our CY 2013 HH PPS
final rule, we provided further clarifications regarding therapy
coverage and therapy reassessments (77 FR 67068). Specifically, similar
to the existing requirements for therapy reassessments when the patient
resides in a rural area, we finalized changes to Sec.
409.44(c)(2)(i)(C)(2) and (D)(2) specifying that when multiple types of
therapy are provided, each therapist must assess the patient after the
10th therapy visit but no later than the 13th therapy visit and after
the 16th therapy visit but no later than the 19th therapy visit for the
plan of care. In Sec. 409.44(c)(2)(i)(E)(1), we specified that when a
therapy reassessment is missed, any visits for that discipline prior to
the next reassessment are non-covered.
Analysis of data from CYs 2010 through 2013 shows that the
frequency of episodes with therapy visits reaching 14 and 20 therapy
visits did not change substantially as a result of the therapy
reassessment policy implemented in CY 2011 (see Table 35). The
percentage of episodes with at least 14 covered therapy visits was 17.2
percent in CY 2010 and decreased to 16.0 percent in CY 2011. In CY 2013
the percentage of episodes with at least 14 covered therapy visits
increased to 16.3 percent. Likewise, the percentage of episodes with at
least 20 covered therapy visits was 6.0 percent in CY 2010 and
decreased to 5.4 percent in CY 2011. In CY 2013, the percentage of
episodes with at least 20 covered therapy visits was 5.3 percent. We
analyzed data for specific types of providers (for example, non-profit,
for profit, freestanding, facility-based), and we found the similar
trends in the number of episodes with at least 14 and 20 covered
therapy visits. For example, for non-profit HHAs, the percentage of
episodes with at least 14 covered therapy visits decreased from 11.8
percent in CY 2010 to 11.1 in CY 2011 and episodes with at least 20
covered therapy visits decreased from 4.2 percent in CY 2010 to 3.9
percent in CY 2011. For proprietary HHAs, the percentage of episodes
with at least 14 covered therapy visits decreased from 19.7 percent in
CY 2010 to 18.2 percent in CY 2011 and episodes with at least 20
covered therapy visits decreased

[[Page 66102]]

from 6.8 percent in CY 2010 to 6.1 percent in CY 2011.
As we stated in section III.A of this final rule, in addition to
the implementation of the therapy reassessment requirements in CY 2011,
HHAs were also subject to the Affordable Care Act face-to-face
encounter requirement, payments were reduced to account for increases
nominal case-mix, and the Affordable Care Act mandated that the HH PPS
payment rates be reduced by 5 percent to pay up to, but no more than
2.5 percent of total HH PPS payments as outlier payments. The estimated
net impact to HHAs for CY 2011 was a decrease in total HH PPS payments
of 4.78 percent. The independent effects of any one policy may be
difficult to discern in years where multiple policy changes occur in
any given year. We note that in our CY 2012 HH PPS final rule (76 FR
68526), we recalibrated and reduced the HH PPS case-mix weights for
episodes reaching 14 and 20 therapy visits, thereby diminishing the
payment incentive for episodes at those therapy thresholds.

Table 35--Percentage of Episodes With 14 and 20 Therapy Visits, CY 2010 Through 2013
----------------------------------------------------------------------------------------------------------------
Episodes with Episodes with Episodes with
at least 1 at least 14 at least 20
Calendar year covered therapy covered therapy covered therapy
visit visits visits
----------------------------------------------------------------------------------------------------------------
2010...................................................... 54.1 17.2 6.0
2011...................................................... 54.2 16.0 5.4
2012...................................................... 55.2 15.6 5.2
2013...................................................... 56.3 16.3 5.3
----------------------------------------------------------------------------------------------------------------
Source: CY 2010 claims from the Datalink file and CY 2011 through CY 2013 claims from the standard analytic file
(SAF).
Note(s): For CY 2010, we included all episodes that began on or after January 1, 2010 and ended on or before
December 31, 2010 and we included a 20% sample of episodes that began in CY 2009 but ended in CY 2010. For CY
2011 and CY 2013, we included all episodes that ended on or before December 31 of that CY (including 100% of
episodes that began in the previous CY, but ended in the current CY).

Since the therapy reassessment requirements were implemented in CY
2011, providers have expressed frustration regarding the timing of
reassessments for multi-discipline therapy episodes. In multiple
therapy episodes, therapists must communicate when a planned visit and/
or reassessment is missed to accurately track and count visits.
Otherwise, therapy reassessments may be in jeopardy of not being
performed during the required timeframe increasing the risk of
subsequent visits being non-covered. As stated above, our recent
analysis of claims data from CY 2010 through CY 2013 does not show
significant change in the percentage of cases reaching the 14 therapy
visit and 20 therapy visit thresholds between CY 2010 and CY 2011.
Moreover, payment increases at the 14 therapy visit and 20 therapy
visit thresholds have been somewhat mitigated since the recalibration
of the case-mix weights in CY 2012. Therefore, we proposed to simplify
Sec. 409.44(c)(2) to require a qualified therapist (instead of an
assistant) from each discipline to provide the needed therapy service
and functionally reassess the patient in accordance with Sec.
409.44(c)(2)(i)(A) at least every 14 calendar days.
The proposed requirement to perform a therapy reassessment at least
once every 14 calendar days would apply to all episodes regardless of
the number of therapy visits provided. All other requirements related
to therapy reassessments will remain unchanged, such as a qualified
therapist (instead of an assistant) from each therapy discipline
provided will still be required to provide the ordered therapy service
and functionally reassess the patient using a method which would
include objective measurements. The measurement results and
corresponding effectiveness of the therapy, or lack thereof, would be
documented in the clinical record. In the proposed rule, we stated our
belief that revising this requirement would make it easier and less
burdensome for HHAs to track and to schedule therapy reassessments
every 14 calendar days as opposed to tracking and counting therapy
visits, especially for multiple-discipline therapy episodes. We also
believed that this proposal would reduce the risk of non-covered visits
so that therapists could focus more on providing quality care for their
patients, while still promoting therapist involvement and quality
treatment for all beneficiaries, regardless of the level of therapy
provided.
In the CY 2015 HH PPS proposed rule (79 FR 38366-38420), we invited
comment on this proposal and the associated change in the regulation at
Sec. 409.44. The following is a summary of comments we received
regarding the proposed change to the therapy reassessment timeframes.
Comment: Commenters strongly supported removing the requirement to
perform therapy reassessments on or ``close to'' the 13th and 19th
therapy visits. Commenters appreciate our effort to simplify the
therapy reassessment timeframes in order to allow more time and energy
to be focused on the patients and outcomes and less time on counting
visits. However, the commenters believe that the proposed reassessment
interval of every 14 days would be too frequent. They noted that the
14-day interval is not linked to a clinical objective that benefits the
patient. They note that changes in function as a result of improvements
in functional strength, balance, and other impairments typically take
longer than the 14 days. Commenters state that physiological change
requires six to eight weeks to occur depending on the patient's
individual goals. They believe this to be true especially in the case
of home health patients who typically have complex, multi-system
impairments. Most commenters believe that a 30 day reassessment would
be more realistic in terms of commonly used functional tests, such as
the Berg Balance test, Gait Velocity, Chair Rise test, Timed Up and Go,
and Barthel Index, being able to detect a change. Several commenters
believe the 14 day requirement would lead to scheduling congestion due
to the shortage of qualified therapists and time constraints in rural
areas where therapists spend a lot of time traveling to the patient's
residence. Commenters state that this would make it exceedingly
difficult for HHAs to accommodate both patient and staff scheduling
needs, which would negatively impact patient care. Commenters believe
that the proposed 14 day reassessment requirement discourages the
proper use of assistants and their role in home health care. In
addition, commenters state that the 14 day timeframe is burdensome in
that it increases documentation requirements and does nothing to
promote quality of

[[Page 66103]]

care. For example, commenters expect that the 14 day reassessment
timeframe will result in patient complaints that therapists are
spending too much treatment time on documentation. Additionally, the 14
day reassessment timeframe negatively impacts continuity of care. For
example, if a patient is being seen by a certified occupational therapy
assistant and a physical therapy assistant, then the patient would be
seen by four different therapists in a two week time period. This could
be overwhelming for the patient. Continuity of care and personnel are
important with this population to ensure trust and follow through which
directly impacts the patient's adherence to a home exercise program and
to follow the functional and safety recommendations made by the
treating therapists.
Several commenters stated that patient care should not be
determined by a calendar and that the reassessment should still be
based on the frequency of visits. Some commenters recommended that the
reassessment be performed every 5th or 6th visit while others
recommended that it be performed every 8th or 10th visit. However, the
majority of commenters stated that converting this requirement to a
calendar day based interval will be far easier to track and manage.
Most commenters believe that a calendar day based interval will reduce
the likelihood of inadvertently missing an assessment, especially when
the patient is receiving multiple types of therapy. Several commenters
suggested a reassessment timeframe in the range of every 20 to 28 days.
A few commenters suggested every 6 to 8 weeks. One commenter
recommended performing the assessment every 60 days. The overwhelming
majority of commenters recommended reassessing the patient at least
once every 30 days as the most appropriate time frame. Commenters
stated that a 30 day reassessment timeframe aligns with many state
practice acts, which require that a therapist reassess the patient at
least once every 30 days.
Response: As a result of the comments we received, in which most
commenters suggested requiring therapy reassessments at least once
every 30 days, we are finalizing our proposal to eliminate the therapy
reassessments that are required to be performed on or ``close to'' the
13th and 19th therapy visits. We are also finalizing that a qualified
therapist (instead of an assistant) from each discipline provide the
needed therapy service and functionally reassess the patient in
accordance with Sec. 409.44(c)(2)(i)(A) at least once every 30
calendar days, rather than at least every 14 calendar days, as
proposed.
Comment: Some commenters suggested that we provide either a 3 or 5
day window or grace period before and after the 30th day in which to
complete the reassessment.
Response: A 3-5 day window before the 30th day is built into the
requirement to perform the reassessment at least once every 30 calendar
days. However, we will not adopt a policy of allowing for a 3 or 5 day
window or grace period after the 30th calendar day as some of the
commenters suggested. We believe that requiring therapy reassessments
to be performed at least once every 30 calendar days is flexible and
enhances patient care.
Comment: Some commenters asked for clarification as to whether the
proposed reassessment would be required at least once every 14 calendar
days or exactly every 14th calendar day.
Response: We had intended that the proposed requirement would be
for the reassessment to be performed at least once every 14 calendar
days. We will finalize a requirement that the reassessment be performed
at least once every 30 days. The reassessment will not have to be done
on exactly the 30th day. For example, the reassessment could be done on
the 21st day or the 28th day as clinically appropriate and deemed
necessary by the therapist.
Comment: One commenter stated that it is in the best interest of
the patient to have regular interaction with the actual therapist, not
just the assistant. The commenter believes that assistants generally
should not be routinely used in the home setting unless they have
demonstrated advanced proficiencies in the setting and that assistant
visits should be reimbursed at a lower level since HHAs pay them less.
Response: We believe that therapy assistants play a very important
role in supporting therapists and providing care to home health
patients, especially in rural areas and areas where there is a shortage
of therapists. The home health Conditions of Participation (CoPs), at
Sec. 484.32, state that any therapy services offered by the HHA
directly or under arrangement are given by a qualified therapist or by
a qualified therapy assistant under the supervision of a qualified
therapist and in accordance with the plan of care. The qualified
therapist assists the physician in evaluating level of function, helps
develop the plan of care (revising it as necessary), prepares clinical
and progress notes, advises and consults with the family and other
agency personnel, and participates in in-service programs. Services
furnished by a qualified physical therapy assistant or qualified
occupational therapy assistant may be furnished under the supervision
of a qualified physical or occupational therapist. A physical therapy
assistant or occupational therapy assistant performs services planned,
delegated, and supervised by the therapist, assists in preparing
clinical notes and progress reports, and participates in educating the
patient and family, and in in-service programs. In addition, guidelines
published by the American Physical Therapy Association (APTA) state:

When supervising the physical therapist assistant in any off-
site setting, the following requirements must be observed:
1. A physical therapist must be accessible by telecommunications
to the physical therapist assistant at all times while the physical
therapist assistant is treating patients/clients.
2. There must be regularly scheduled and documented conferences
with the physical therapist assistant regarding patients/clients,
the frequency of which is determined by the needs of the patient/
client and the needs of the physical therapist assistant.
3. In those situations in which a physical therapist assistant
is involved in the care of a patient/client, a supervisory visit by
the physical therapist will be made:
a. Upon the physical therapist assistant's request for a
reexamination, when a change in the plan of care is needed, prior to
any planned discharge, and in response to a change in the patient's/
client's medical status.
b. At least once a month, or at a higher frequency when
established by the physical therapist, in accordance with the needs
of the patient/client.
c. A supervisory visit should include:
i. An on-site reexamination of the patient/client.
ii. On-site review of the plan of care with appropriate revision
or termination.
iii. Evaluation of need and recommendation for utilization of
outside resources.''\43\

\43\ https://www.apta.org/uploadedFiles/APTAorg/About_Us/Policies/Practice/DirectionSupervisionPTA.pdf.
---------------------------------------------------------------------------

We believe that requiring therapy reassessments at least once every 30
days, the current CoP requirements, and the APTA guidelines together
promote regular interaction between the therapist and the patient. We
will continue to monitor the frequency of assistant visits. As shown in
Table 36 below, CY 2011 through CY 2013 claims data indicates that
about 30 percent of the time, physical therapy is provided by
assistants and about 15 percent of the time, occupational therapy is
provided by assistants.

[[Page 66104]]

Table 36--Percentage of Visits Provided by a Physical Therapy and
Occupational Therapy Assistants, CY 2011 Through 2013
------------------------------------------------------------------------
Percentage of Percentage of
PT visits OT visits
Year provided by a provided by an
PTA OTA
------------------------------------------------------------------------
2011.................................... 23.8 14.4
2012.................................... 28.5 15.4
2013.................................... 29.2 15.4
------------------------------------------------------------------------
Source: Analysis of CY 2011 through CY 2013 claims data from the
Standard Analytic File (SAF).
Note(s): We included all episodes that ended on or before December 31 of
that CY (including 100% of episodes that began in the previous CY, but
ended in the current CY).

Bureau of Labor Statistics (BLS) data on wage and fringe rates is
currently used along with the minutes of care provided during home
health episodes, as found on claims, to calculate an episode's resource
use (an estimate of the relative cost of the episode). Data on resource
use is used to construct case-mix weights that adjust the base payment
rate in order to more accurately pay for home health episodes. Since CY
2012, the case mix system takes into account whether visits were
performed by a therapist or a therapy assistant when constructing the
case mix weights by calculating an episode's resource use accordingly.
The Medicare HHA cost report form may be revised in the near future,
but currently the form does not allow us to differentiate the cost of a
therapist visit from a therapy assistant visit. We will consider
whether separate LUPA rates for therapists versus therapy assistants
are needed in the future.
Comment: A commenter requested clarification regarding the
semantics of our proposal ``. . . to require a qualified therapist
(instead of an assistant) from each discipline to provide the needed
therapy service and functionally reassess the patient . . .'' as this
could be interpreted two different ways. The commenter is concerned
that the language could be interpreted to mean that therapy assistants
will no longer be eligible to perform visits in the home health
setting.
Response: We are not changing our existing policy regarding therapy
assistants. Assistants may still perform physical therapy services and
occupational therapy services which they are qualified to perform.
Therapy assistants may provide therapy visits as medically reasonable
and necessary to treat the patient throughout the duration of the
episode. As stated in our existing policy, during the visit in which
the therapist performs the assessment, the qualified therapist (not a
therapy assistant) must also provide the therapy service(s).
Comment: One commenter asked if the new therapy reassessment
timeframe will only apply to episodes beginning on or after January 1,
2015 or if it will also apply to episodes spanning January 1, 2015.
Response: The new therapy reassessment requirement will apply to
episodes that begin on or after January 1, 2015.
Comment: Several commenters questioned when the reassessment clock
would start. They asked for more clarity about whether the count would
begin at the start of the episode or from the date the patient is first
seen by a therapist.
Response: The clock would start from the date the patient is first
seen by the qualified therapist, as per Sec. 409.44(c)(2)(i)(A) the
patient's function must be initially assessed by a qualified therapist.
As stated in current guidance, the reassessment clock is not measured
by episode but by the patient's full course of treatment. That is, the
reassessment clock starts with the therapist's first assessment/visit
and continues until the patient is discharged from home health. In
cases where more than one type of therapy is being provided, each
therapy discipline has its own separate clock. The 30-day clock begins
with the first therapy service (of that discipline) and the clock
resets with each therapist's visit/assessment/measurement/documentation
(of that discipline).
In order to determine when the next therapy reassessment visit by a
qualified therapist would be required, as it relates to the ``at least
every 30 days'' requirement, the counting should begin the day after
the service is provided. For example, if a therapist conducted and
documented an assessment of a patient during a visit on April 1, the
count would begin on April 2. In this case, in order to fulfill the
requirement of reassessing the patient at least once every 30 days, the
therapist rather than an assistant, would need to return by May 1.
We note that the intent of the policy is to ensure that, at a
minimum, a patient is seen by the therapist at least once every 30
days. The intent is not for a therapist to wait until the 30th day to
visit a patient. A therapy reassessment visit should include providing
the actual therapy service(s), functionally assessing the patient,
measuring progress to determine if the goals have been met, and
documenting measurement results and corresponding therapy effectiveness
in the clinical record.
Comment: A commenter was supportive of a requirement for
reassessing the patient every 30 days with the understanding that
nothing precludes an agency from doing another assessment earlier than
the 30th day if warranted by the patient's condition or ending of
therapy.
Response: The commenter is correct. Nothing precludes an agency
from doing another assessment earlier than the 30th day if warranted by
the patient's condition or ending of therapy. As stated above, the
requirement is for the qualified therapist to reassess the patient at
least once every 30 days.
Comment: A commenter stated that education regarding any changes to
the timing expectations is critical to reduce confusion and prevent
misunderstandings and that clearly written instruction with specific
examples would be extremely beneficial. The commenter further stated
that partnering with the therapy associations in educational efforts
will help get the correct word out to the therapists themselves.
Response: We will be updating the policy as published in chapter 7
``Home Health Services'' of the Medicare Benefit Policy Manual (Pub.
100-20) and publishing a provider education article related to the
revised policy. As always, we appreciate any educational efforts that
the professional associations are able and willing to provide.
Final Decision: In summary, we are finalizing changes to the
regulations at Sec. 409.44, effective for episodes ending on or after
January 1, 2015, to require that at least every 30 days a qualified
therapist (instead of an assistant) must provide the needed therapy
service and functionally reassess the patient. Where more than one
discipline of therapy is being provided, a qualified therapist from
each of the disciplines must provide the needed therapy service and
functionally reassess the patient at least every 30 days. Therapy
reassessments are to be performed using a method that would include
objective measurement, in accordance with accepted professional
standards of clinical practice, which enables comparison of successive
measurements to determine the effectiveness of therapy goals. Such
objective measurements would be made by the qualified therapist using
measurements which assess activities of daily living that may include
but are not limited to eating, swallowing, bathing, dressing,
toileting, walking, climbing stairs, or using assistive devices, and
mental and cognitive factors. The measurement results and corresponding
effectiveness of the therapy, or lack

[[Page 66105]]

thereof, must be documented in the clinical record.

I. HHA Value-Based Purchasing Model

As we discussed previously in the FY 2009 proposed rule for Skilled
Nursing Facilities (73 FR 25918, 25932, May 7, 2008), value-based
purchasing (VBP) programs, in general, are intended to tie a provider's
payment to its performance in such a way as to reduce inappropriate or
poorly furnished care and identify and reward those who furnish quality
patient care. Section 3006(b)(1) of the Affordable Care Act directed
the Secretary to develop a plan to implement a VBP program for home
health agencies (HHAs) and to issue an associated Report to Congress
(Report). The Secretary issued that Report, which is available online
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/downloads/stage-2-NPRM.PDF.
The Report included a roadmap for HHA VBP implementation. The
Report outlined the need to develop a HHA VBP program that aligns with
other Medicare programs and coordinates incentives to improve quality.
The Report indicated that a HHA VBP program should build on and refine
existing quality measurement tools and processes. In addition, the
Report indicated that one of the ways that such a program could link
payment to quality would be to tie payments to overall quality
performance.
Section 402(a)(1)(A), of the Social Security Amendments of 1967 (as
amended), 42 U.S.C. 1395b-1(a)(1)(A) provided authority for CMS to
conduct the Home Health Pay-for-Performance (HHPFP) Demonstration that
ran from 2008 to 2010. The results of that Demonstration found limited
quality improvement in certain measures after comparing the quality of
care furnished by Demonstration participants to the quality of care
furnished by the control group. One important lesson learned from the
HHPFP Demonstration was the need to link the HHA's quality improvement
efforts and the incentives. HHAs in three of the four regions generated
enough savings to have incentive payments in the first year of the
Demonstration, but the size of payments were unknown until after the
conclusion of the Demonstration. This time lag on paying incentive
payments did not provide a sufficient incentive to HHAs to make
investments necessary to improve quality. The Demonstration suggested
that future models could benefit from ensuring that incentives are
reliable enough, of sufficient magnitude, and paid in a timely fashion
to encourage HHAs to be fully engaged in the quality of care
initiative. The evaluation report is available online at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Reports/Downloads/HHP4P_Demo_Eval_Final_Vol1.pdf.
We have already successfully implemented the Hospital Value-Based
Purchasing (HVBP) program where 1.25 percent of hospital payments in FY
2014 are tied to the quality of care that the hospitals provide. This
percentage amount will gradually increase to 2.0 percent in FY 2017 and
subsequent years. The President's 2015 Budget proposes that value-based
purchasing should be extended to additional providers including skilled
nursing facilities, home health agencies, ambulatory surgical centers,
and hospital outpatient departments. Therefore, we are now considering
testing a HHA VBP model that builds on what we have learned from the
HVBP program. The model also presents an opportunity to test whether
larger incentives than what have been previously tested will lead to
even greater improvement in the quality of care furnished to
beneficiaries. The HHA VBP model that is being considered will offer
both a greater potential reward for high performing HHAs as well as a
greater potential downside risk for low performing HHAs. If
implemented, the model will begin at the outset of CY 2016, and include
an array of measures that can capture the multiple dimensions of care
that HHAs furnish. Building upon the successes of other related
programs, we are seeking to implement a model with greater upside
benefit and downside risk to motivate HHAs to make the substantive
investments necessary to improve the quality of care furnished by HHAs.
As currently envisioned, the HHA VBP model would reduce or increase
Medicare payments, in a 5-8 percent range, depending on the degree of
quality performance in various measures to be selected. The model would
apply to all HHAs in each of the projected five to eight states
selected to participate in the model. The distribution of payments
would be based on quality performance, as measured by both achievement
and improvement across multiple quality measures. Some HHAs would
receive higher payments than standard fee-for-service payments and some
HHAs would receive lower payments, similar to the HVBP program. We
believe the payment adjustment at risk would provide an incentive among
all HHAs to provide significantly better quality through improved
planning, coordination, and management of care. To be eligible for any
incentive payments, HHAs would need to achieve a minimal threshold in
quality performance with respect to the care that they furnish. The
size of the award would be dependent on the level of quality furnished
above the minimal threshold with the highest performance awards going
to HHAs with the highest overall level of or improvement in quality.
HHAs that meet or exceed the performance standards based on quality
and efficiency metrics would be eligible to earn performance payments.
The size of the performance payment would be dependent upon the
provider's performance relative to other HHAs within its participating
state. HHAs that exceed the performance standards and demonstrate the
greatest level of overall quality or quality improvement on the
selected measures would have the opportunity to receive performance
payment adjustments greater than the amount of the payment reduction,
and would therefore see a net payment increase as a result of this
model. Those HHAs that fail to meet the performance standard would
receive lower payments than what would have been reimbursed under the
traditional FFS Medicare payment system, and would therefore see a net
payment decrease to Medicare payments as a result of this model. We
stated in the proposed rule that we are proposing to use the waiver
authority under section 1115A of the Act to waive the applicable
Medicare payment provisions for HHAs in the selected states and apply a
reduction or increase to current Medicare payments to these HHAs, which
will be dependent on their performance.
We are considering a HHA VBP model in which participation by all
HHAs in five to eight selected states is mandatory. We believe
requiring all HHAs in selected states to participate in the model will
ensure that: (1) There is no selection bias, (2) participating HHAs are
representative of HHAs nationally, and (3) there is sufficient
participation to generate meaningful results. In our experience,
providers are generally reluctant to participate voluntarily in models
in which their Medicare payments are subject to reduction. In the
proposed rule, we invited comments on the HHA VBP model outlined above,
including elements of the model, size of the payment incentives and
percentage of payments that would need to be placed at risk in order to
spur HHAs to make the necessary investments to improve the quality of
care for Medicare beneficiaries, the timing of the incentive

[[Page 66106]]

payments, and how performance payments should be distributed. We also
invited comments on the best approach for selecting states for
participation in this model. Approaches could include: (1) Selecting
states randomly, (2) selecting states based on quality, utilization,
health IT, or efficiency metrics or a combination, or (3) other
considerations. We noted that if we decide to move forward with the
implementation of this HHA VBP model in CY 2016, we intended to invite
additional comments on a more detailed model proposal to be included in
future rulemaking.
We received a number of comments on the model design, including the
following:
A number of commenters expressed concern regarding the
magnitude of 5-8 percent payment adjustment incentives, particularly
when considering HHA margins, and as compared to the Hospital Value-
based Purchasing program. A number of commenters also expressed support
for a high payment incentive because they believe that this payment
incentive will provide adequate remuneration for an investment in
quality.
A number of commenters encouraged a combination of pay-
for-performance and pay-for-reporting .
A number of commenters expressed ideas on the evaluation
criteria under the model, for example: Not using the 5-star system,
giving higher weight to quality measures relating to conditions
requiring home health intervention, excluding HHCAHPS from the criteria
due to timeliness reasons, excluding re-hospitalization metrics since
they are often determined by physician judgment, and excluding OASIS
measures since they might be fraudulently manipulated.
A number of commenters expressed support for the inclusion
of a beneficiary risk adjustment strategy to help prevent cherry
picking of easier cases.
A number of commenters preferred for HHAs to be allowed to
select participation as opposed to the mandatory participation being
considered by CMS.
A number of commenters expressed opinions about the
methodology for selecting the participating states, including choosing
them from various MAC regions, choosing a rural and frontier state, and
excluding states with moratoria on new HHAs.
A number of commenters supported the development of a VBP
model.
We thank all commenters for their input and will consider these
comments as we make further decisions about implementing a HHA VBP
model in CY 2016 which would assess performance from each of the
preceding baseline years. As stated in the proposed rule, we intend to
invite additional comments on a more detailed model proposal to be
included in future rulemaking, including the selection of states and
the criteria used for selection, the specific measures to be employed,
how these measures are categorized within domains and the criteria used
for selection, and the payment adjustment percentage.

J. Advancing Health Information Exchange

HHS believes all patients, their families, and their healthcare
providers should have consistent and timely access to their health
information in a standardized format that can be securely exchanged
between the patient, providers, and others involved in the patient's
care. (HHS August 2013 Statement, ``Principles and Strategies for
Accelerating Health Information Exchange.'') The Department is
committed to accelerating health information exchange (HIE) through the
use of electronic health records (EHRs) and other types of health
information technology (health IT) across the broader care continuum
through a number of initiatives including: (1) Alignment of incentives
and payment adjustments to encourage provider adoption and optimization
of health IT and HIE services through Medicare and Medicaid payment
policies, (2) adoption of common standards and certification
requirements for interoperable health IT, (3) support for privacy and
security of patient information across all HIE-focused initiatives, and
(4) governance of health information networks. These initiatives are
designed to encourage HIE among all health care providers, including
professionals and hospitals eligible for the Medicare and Medicaid EHR
Incentive Programs and those who are not eligible for the EHR Incentive
programs, and are designed to improve care delivery and coordination
across the entire care continuum. We believe that HIE and the use of
certified EHR technology by HHAs (and other providers ineligible for
the Medicare and Medicaid EHR Incentive Programs) can effectively and
efficiently help providers improve internal care delivery practices,
support management of patient care across the continuum, and enable the
reporting of electronically specified clinical quality measures
(eCQMs).
Comments: Responses from commenters generally supported the use of
EHRs to advance standards-based interoperable health information
exchange, ensure privacy and security protections, and improve patient-
centered quality care. Commenters noted the ability for health IT to
enable access to essential information for decision-making by
individuals, providers and their family caregivers. One commenter noted
the possibility that some vendors may sunset products or increase costs
as health IT standards are adopted. Other commenters noted the need for
standards that recognize the distinct functional needs of the home care
sector and requested notice regarding emerging standards to allow
sufficient time for vendor and provider integration. Other commenters
expressed concern regarding increased costs associated with
implementing HIE and the lack of incentives to support capital
expenditures.
Response: We thank commenters for their responses. HHS will
continue to promote the adoption and implementation of certified health
IT. The use of certified health IT can improve interoperability through
the use of national, consensus-based standards as well as facilitate
the secure interoperable exchange of health information. To increase
flexibility in the Office of the National Coordinator for Health
Information Technology's (ONC) regulatory certification structure, ONC
expressed in the 2014 Edition Release 2 final rule (79 FR 54472-73) an
intent to propose future changes to the ONC HIT Certification Program
that would permit the certification of health IT for other health care
settings, such as long-term and post-acute care and behavioral health
settings. For now, we direct stakeholders to the ONC guidance for EHR
technology developers serving providers ineligible for the Medicare and
Medicaid EHR Incentive Programs titled ``Certification Guidance for EHR
Technology Developers Serving Health Care Providers Ineligible for
Medicare and Medicaid EHR Incentive Payments.'' \44\ We encourage
stakeholders to also review the Health IT Policy Committee (a Federal
Advisory Committee) recommendations for areas in which certification
under the ONC HIT Certification Program would help support long-term
and post-acute care providers.\45\ Further,

[[Page 66107]]

stakeholders should consider emerging innovative payment models,
quality reporting programs, state Medicaid reimbursement for remote
monitoring (available in some states) and grants that could provide
funding for health IT implementation for home health or incentivize
other providers to assist home health providers' implementation
efforts. For an overview of these opportunities, stakeholders are
directed to the Health IT in Long-Term Post-Acute Care Issue Brief.\46\
---------------------------------------------------------------------------

\44\ https://www.healthit.gov/sites/default/files/generalcertexchangeguidance_final_9-9-13.pdf. More information on
the current development of standards applicable to HH can be found
at: https://wiki.siframework.org/LCC+LTPAC+Care+Transition+SWG and
https://wiki.siframework.org/Longitudinal+Coordination+of+Care.
\45\ https://www.healthit.gov/facas/sites/faca/files/TransmittalLetter_LTPAC_BH_Certification.pdf; https://www.healthit.gov/facas/sites/faca/files/HITPC_LTPAC_BH_Certification_Recommendations_FINAL.pdf.
\46\ https://www.healthit.gov/sites/default/files/pdf/HIT_LTPAC_IssueBrief031513.pdf.
---------------------------------------------------------------------------

K. Proposed Revisions to the Speech-Language Pathologist Personnel
Qualifications

We proposed to revise the personnel qualifications for speech-
language pathologists (SLP) to more closely align the regulatory
requirements with those set forth in section 1861(ll) of the Act. We
proposed to require that a qualified SLP be an individual who has a
master's or doctoral degree in speech-language pathology, and who is
licensed as a speech-language pathologist by the state in which he or
she furnishes such services. To the extent of our knowledge, all states
license SLPs; therefore, all SLPs would be covered by this option. We
believe that deferring to the states to establish specific SLP
requirements would allow all appropriate SLPs to provide services to
Medicare beneficiaries. Should a state choose not to offer licensure at
some point in the future, we proposed a second, more specific, option
for qualification. In that circumstance, we proposed to require that a
SLP successfully complete 350 clock hours of supervised clinical
practicum (or be in the process of accumulating such supervised
clinical experience); perform not less than 9 months of supervised
full-time speech-language pathology services after obtaining a master's
or doctoral degree in speech-language pathology or a related field; and
successfully complete a national examination in speech-language
pathology approved by the Secretary. These specific requirements are
set forth in the Act, and we believe that they are appropriate for
inclusion in the regulations as well.
We invited comments on this technical correction and associated
change in the regulations at Sec. 484.4 in section VI. We received
five public comments regarding this proposal from individual HHAs,
state HHA provider organizations, and a national organization
representing SLPs.
Comment: All comments supported the deferral to state licensure
standards and validated CMS' understanding that all states currently
have licensure standards for SLPs. One commenter supported the
inclusion of separate qualifications for those SLPs located in areas
without state licensure, noting that these regulations would also apply
in US Territories, and that not all Territories have licensure
standards for SLPs.
Response: We agree with the commenters that the changes would be
appropriate, and are finalizing them as such.
Comment: A commenter suggested that we should replace the specific
education, training, and experience requirements set forth in the
Social Security Act with a requirement that an SLP must meet the
certification standards established by the American Speech-Language-
Hearing Association (ASHA).
Response: The Social Security Act (the Act), on which the
regulation is based, does not limit SLPs to only those individuals who
meet the ASHA certification standards. Since this limitation does not
exist in the Act, we do not believe it should exist in the regulations.
Therefore, in order to align the regulatory requirements with those
requirements set forth in the Act, we are not making the suggested
change. States are free to require ASHA certification as part of their
SLP licensure standards.
Comment: One comment sought clarification on why this change was
being proposed at this time rather than as part of a comprehensive
revision of the home health agency Conditions of Participation (CoPs).
Response: While a comprehensive revision of the home health CoPs is
underway, we have received information from those in the SLP community
that the restrictions currently in place for SLPs are impeding the
ability of SLPs to practice. Finalizing a comprehensive revision to the
home health agency CoPs will require several years. We believe that it
is in the interest of the HHA and SLP communities, as well as the
Medicare program, to effect a more timely change to the SLP personnel
qualifications. Therefore, we are finalizing the revised requirements,
as proposed, in this rule, and the change will be effective on January
1, 2015.
Final decision: We are finalizing the proposal without change.

L. Technical Regulations Text Changes

We proposed to make technical corrections in Sec. 424.22(b)(1) to
better align the recertification requirements with the Medicare
Conditions of Participation (CoPs) for home health services.
Specifically, we proposed that Sec. 424.22(b)(1) will specify that
recertification is required at least every 60 days when there is a need
for continuous home health care after an initial 60-day episode to
coincide with the CoP requirements in Sec. 484.55(d)(1), which require
the HHA to update the comprehensive assessment in the last 5 days of
every 60-day episode of care. As stated in Sec. 484.55, the
comprehensive assessment must identify the patient's continuing need
for home care and meet the patient's medical, nursing, rehabilitative,
social, and discharge planning needs. We also proposed to specify in
Sec. 424.22(b)(1) that recertification is required at least every 60
days unless there is a beneficiary elected transfer or a discharge with
goals met and return to the same HHA during the 60-day episode. The
word ``unless'' was inadvertently left out of the payment regulations
text. Inserting ``unless'' into Sec. 424.22(b)(1) realigns the
recertification requirements with the CoPs at Sec. 484.55(d)(1).
As outlined in the ``Medicare Program; Prospective Payment System
for Home Health Agencies'' final rule published on July 3, 2000 (65 FR
41188 through 41190), a partial episode payment (PEP) adjustment
applies to two intervening events: (1) Where the beneficiary elects a
transfer to another HHA during a 60-day episode or the patient; or (2)
a discharge and return to the same HHA during the 60-day episode when a
beneficiary reached the treatment goals in the plan of care. To
discharge with goals met, the plan of care must be terminated with no
anticipated need for additional home health services for the balance of
the 60-day period. A PEP adjustment proportionally adjusts the
national, standardized 60-day episode payment amount to reflect the
length of time the beneficiary remained under the agency's care before
the intervening event.
We proposed to revised Sec. 424.22(b)(1)(ii) to clarify that if a
beneficiary is discharged with goals met and/or no expectation of a
return to home health care and returns to the same HHA during the 60-
day episode a new start of care would be initiated (rather than an
update to the comprehensive assessment) and thus the second episode
will be considered a

[[Page 66108]]

certification, not a recertification,\47\ and would be subject to Sec.
424.22(a)(1).
---------------------------------------------------------------------------

\47\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/OASIS/downloads/OASISConsiderationsforPPS.pdf
---------------------------------------------------------------------------

We also proposed to make a technical correction in Sec.
484.250(a)(1) to remove the ``-C'' after ``OASIS'' in Sec.
484.250(a)(1), so that the regulation refers generically to the version
of OASIS currently approved by the Secretary, and to align this section
with the payment regulations at Sec. 484.210(e). Specifically, an HHA
must submit to CMS the OASIS data described at Sec. 484.55(b)(1) and
(d)(1) for CMS to administer the payment rate methodologies described
in Sec. 484.215, Sec. 484.230, and Sec. 484.235 and to meet the
quality reporting requirements of section 1895(b)(3)(B)(v) of the Act.
Most of the comments that we received, where the commenter
indicated that they were commenting on these technical corrections and
associated changes in the regulations at Sec. 424.22 and Sec. 484.250
in section VI, were, in fact, also commenting on the proposed
clarification on when documentation of a face-to-face encounter is
required in section III.B.3. While we are finalizing these regulations
text changes as proposed, we refer readers to the summary of the
comments and responses in section III.B.3. for our rationale.
Final Decision: We are finalizing the proposed regulations text
changed at Sec. 424.22 and Sec. 484.250 as proposed.

M. Survey and Enforcement Requirements for Home Health Agencies

1. Statutory Background and Authority
Section 4023 of the Omnibus Budget Reconciliation Act of 1987 (OBRA
'87) (Pub. L 100-203, enacted on December 22, 1987) added subsections
1891(e) and (f) to the Act, which expanded the Secretary's options to
enforce federal requirements for home health agencies (HHAs or the
agency). Sections 1861(e)(1) and (2) of the Act provide that if CMS
determines that an HHA is not in compliance with the Medicare home
health Conditions of Participation and the deficiencies involved either
do, or do not, immediately jeopardize the health and safety of the
individuals to whom the agency furnishes items and services, then we
may terminate the provider agreement, impose an alternative
sanction(s), or both. Section 1891(f)(1)(B) of the Act authorizes the
Secretary to develop and implement appropriate procedures for appealing
determinations relating to the imposition of alternative sanctions.
In the November 8, 2012 Federal Register (77 FR 67068), we
published the ``Alternative Sanctions for Home Health Agencies With
Deficiencies'' final rule (part 488, subpart J), as well as made
corresponding revisions to sections Sec. 489.53 and Sec. 498.3. This
subpart J added the rules for enforcement actions for HHAs including
alternative sanctions. Section 488.810(g) provides that 42 CFR part 498
applies when an HHA requests a hearing on a determination of
noncompliance that leads to the imposition of a sanction, including
termination. Section 488.845(b) describes the ranges of CMPs that may
be imposed for all condition-level findings: upper range ($8,500 to
$10,000); middle range ($1,500 to $8,500); lower range ($500 to
$4,000), as well as CMPs imposed per instance of noncompliance ($1,000
to $10,000).
Section 488.845(c)(2) addresses the appeals procedures when CMPs
are imposed, including the need for any appeal request to meet the
requirements of Sec. 498.40 and the option for waiver of a hearing.
2. Reviewability Pursuant to Appeals
We proposed to amend Sec. 488.845 by adding a new paragraph (h)
which would explain the reviewability of a CMP that is imposed on a HHA
for noncompliance with federal participation requirements. The new
language will provide that when administrative law judges (ALJs), state
hearing officers (or higher administrative review authorities) find
that the basis for imposing a civil money penalty exists, as specified
in Sec. 488.485, he or she may not set a penalty of zero or reduce a
penalty to zero; review the exercise of discretion by CMS or the state
to impose a civil money penalty; or, in reviewing the amount of the
penalty, consider any factors other than those specified in Sec. Sec.
488.485(b)(1)(i) through (b)(1)(iv). That is, when the administrative
law judge or state hearing officer (or higher administrative review
authority) finds noncompliance supporting the imposition of the CMP, he
or she must retain some amount of penalty consistent with the ranges of
penalty amounts established in Sec. 488.845(b). The proposed language
for HHA reviews is similar to the current Sec. 488.438(e) governing
the scope of review for civil money penalties imposed against skilled
nursing facilities, and is also consistent with section 1128A(d) of the
Act which requires that specific factors be considered in determining
the amount of any penalty.
The following is a summary of the comments we received regarding
the proposed amendment to Sec. 488.845 to explain the reviewability of
a CMP by an ALJ.
Comment: One commenter supported the proposal, as it would align
HHA policy more closely with SNF policy regarding ALJ reviewability.
Response: We agree with the commenter who observed that the
proposal would align HHA policy with long-standing practice and policy
with regard to the manner in which SNF CMPs are reviewed. We believe it
is important that CMS be consistent in the application of CMPs among
providers, and the proposed language for HHA CMPs is consistent with
existing language for SNFs at Sec. 488.438(e).
Comment: Two commenters believed that the HHA CMP process was too
new for changes to be addressed in the ALJ review process.
Response: The length of time the HHA CMPs have been in effect is
not relevant to the implementation of the requirements of the Act and
implementing regulations. Section 1891(f)(1)(B) of the Act requires the
Secretary to provide appropriate procedures for appealing the
determination relating to the imposition of a sanction. As provided at
Sec. 488.845(c)(2)(i) ``Appeals Procedures'', the determination that
is the basis for imposition of the CMP may be appealed. The proposed
language does not revise the regulation at Sec. 488.845(c)(2)(i), but
adds clarification regarding the scope of the review during the appeal
process.
Comment: One commenter believed that the ALJs should be allowed to
eliminate CMPs as a part of their administrative review.
Response: Section 1891(b) of the Act mandates that it is the duty
and responsibility of the Secretary to assure that the conditions of
participation as well as the enforcement of such conditions is adequate
to protect the health and safety of individuals under the care of an
HHA. Section 1891(f) of the Act further specifies that the Secretary
establish a range of intermediate sanctions which shall include, among
others, civil money penalties. Finally, section 1819(f)(1)(B) of the
Act requires the Secretary to provide appropriate procedures for
appealing the determination relating to the imposition of the sanction
and the implementing regulations at Sec. 488.845(c)(2)(i), ``Appeals
Procedures'' provide that the determination that is the basis for
imposition of the CMP may be appealed. It is within our discretion as
to the choice of remedy to be imposed. While an ALJ may review the
underlying findings that support CMS's determination to impose a CMP
and

[[Page 66109]]

whether or not the imposed amount falls within the regulatory range,
elimination of any CMP is not within the scope of the appeal process.
Comment: One commenter believed the denial of appeal of the
implementation of the CMP may not be constitutionally valid. An
additional two commenters believed this proposed language added
additional restrictions to the ALJ which resulted in the lack of due
process.
Response: We do not believe that the proposed language raises
constitutional issues or restricts due process. Section 1128A of the
Act requires that specific factors be considered in determining the
amount of the penalty. Those factors, particularly the deficiencies
cited by the survey, are considered by CMS in the establishment of the
CMP amount to be imposed. The deficiencies which give rise to a CMP may
be appealed. Section 1891(f)(1)(B) of the Act requires the Secretary to
provide appropriate procedures for appealing the determination relating
to the imposition of the sanction. These procedures are provided at
Sec. 488.845(c)(2)(i). The CMP itself would be affected if the
deficiencies underlying the determination were not sustained on appeal.
Final Decision: After careful consideration of the comments
received, we are finalizing the regulatory language as proposed.
3. Technical Adjustment
We also proposed to amend Sec. 498.3, Scope and Applicability, by
revising paragraph (b)(13) to include specific cross reference to
proposed Sec. 488.845(h) and to revise the reference to section Sec.
488.740 which was a typographical error and replace it with section
Sec. 488.820 which is the actual section that lists the sanctions
available to be imposed against an HHA. We also amended Sec.
498.3(b)(14)(i) to include cross reference to proposed Sec.
488.845(h), which establishes the scope of CMP review for HHAs.
Finally, we proposed to amend Sec. 498.60 to include specific
references to HHAs and proposed Sec. 488.845(h).

IV. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. To
fairly evaluate whether an information collection should be approved by
OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995
requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We solicited public comment on the information collection
requirement (ICR) related to the proposed changes to the home health
face-to-face encounter requirements in section III.B and the proposed
change to the therapy reassessment timeframes in section III.H. These
proposed changes are associated with ICR approved under OMB control
number as 0938-1083.

A. Proposed Changes to the Face-to-Face Encounter Requirements

The following assumptions were used in estimating the burden for
the proposed changes to the home health face-to-face requirements:

Table 37--Home Health Face-to-Face Encounter Burden Estimate Assumptions
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
# of Medicare-billing HHAs, from CY 2013 claims with 11,521
matched OASIS assessments.
Hourly rate of an office employee (Executive Secretaries $20.54 ($15.80 x; 1.30)
and Executive Administrative Assistants, 43-6014).
Hourly rate of an administrator (General and Operations $64.65 ($49.73 x; 1.30)
Managers, 11-1021).
Hourly rate of Family and General Practitioners (29-1062).. $112.91 ($86.85 x; 1.30)
----------------------------------------------------------------------------------------------------------------
Note: CY = Calendar Year.

All salary information is from the Bureau of Labor Statistics (BLS) Web
site at https://www.bls.gov/oes/current/naics4_621600.htm and includes a
fringe benefits package worth 30 percent of the base salary. The mean
hourly wage rates are based on May 2013 BLS data for each discipline,
for those providing ``home health care services.''
1. Proposed Changes to the Face-to-Face Encounter Narrative Requirement
Sections 1814(a)(2)(C) and 1835 (a)(2)(A) of the Act, as amended by
section 6407 of the Affordable Care Act require that, as a condition
for payment, prior to certifying a patient's eligibility for the
Medicare home health benefit the physician must document that the
physician himself or herself or an allowed nonphysician practitioner
(NPP) had a face-to-face encounter with the patient. Section
424.22(a)(1)(v) currently requires that that the face-to-face encounter
be related to the primary reason the patient requires home health
services and occur no more than 90 days prior to the home health start
of care date or within 30 days after the start of the home health care.
In addition, as part of the certification of eligibly, the certifying
physician must document the date of the encounter and include an
explanation (narrative) of why the clinical findings of such encounter
support that the patient is homebound, as defined in section 1835(a) of
the Act, and in need of either intermittent skilled nursing services or
therapy services, as defined in Sec. 409.42(c).
To simplify the face-to-face encounter regulations, reduce burden
for HHAs and physicians, and to mitigate instances where physicians and
HHAs unintentionally fail to comply with certification requirements, we
propose to eliminate the narrative requirement at Sec.
424.22(a)(1)(v). The certifying physician will still be required to
certify that a face-to-face patient encounter, which is related to the
primary reason the patient requires home health services, occurred no
more than 90 days prior to the home health start of care date or within
30 days of the start of the home health care and was performed by a
physician or allowed non-physician practitioner as defined in Sec.
424.22(a)(1)(v)(A), and to document the date of the encounter as part
of the certification of eligibility.
In eliminating the face-to-face encounter narrative requirement, we
assume that there will be a one-time burden for the HHA to modify the
certification form, which the HHA provides to the certifying physician.
The revised certification form must allow the certifying physician to
certify that a face-to-face patient encounter, which is related to the
primary reason the patient requires home health services, occurred no
more than 90 days prior to the home health start of care date or within
30 days of the start of the home health care

[[Page 66110]]

and was performed by a physician or allowed NPP as defined in Sec.
424.22(a)(1)(v)(A). In addition, the certification form must allow the
certifying physician to document the date that the face-to-face
encounter occurred.
We estimate that it would take a home health clerical staff person
15 minutes (\15/60\ = 0.25 hours) to modify the certification form, and
the HHA administrator 15 minutes (\15/60\ = 0.25 hours) to review the
revised form. The clerical time plus administrator time equals a one-
time burden of 30 minutes or (\30/60\) = 0.50 hours per HHA. For all
11,521 HHAs, the total time required would be (0.50 x; 11,521) = 5,761
hours. At $20.54 per hour for an office employee, the cost per HHA
would be (0.25 x; $20.54) = $5.14. At $64.65 per hour for the
administrator's time, the cost per HHA would be (0.25 x $64.65) =
$16.16. Therefore, the total one-time cost per HHA would be $21.30, and
the total one-time cost for all HHAs would be ($21.30 x 11,521) =
$245,397.
In the CY 2011 HH PPS final rule (75 FR 70455), we estimated that
the certifying physician's burden for composing the face-to-face
encounter narrative, which includes how the clinical findings of the
encounter support eligibility (writing, typing, or dictating the face-
to-face encounter narrative) signing, and dating the patient's face-to-
face encounter, was 5 minutes for each certification (\5/60\ = 0.0833
hours). Because it has been our longstanding manual policy that
physicians sign and date certifications and recertifications, there is
no additional burden to physicians for signing and dating the face-to-
face encounter documentation. We estimate that there would be 3,096,680
initial home health episodes in a year based on 2012 claims data from
the home health Datalink file. As such, the estimated burden for the
certifying physician to write the face-to-face encounter narrative
would have been 0.0833 hours per certification (\5/60\ = 0.0833 hours)
or 257,953 hours total (0.0833 hours x 3,096,680 initial home health
episodes). The estimated cost for the certifying physician to write to
face-to-face encounter narrative would have been $9.41 per
certification (0.0833 x $112.91) or $29,139,759 total ($9.41 x
3,096,680) for CY 2015.
Although we proposed to eliminate the narrative, the certifying
physician will still be required to document the date of the face-to-
face encounter as part of the certification of eligibility. We estimate
that it would take no more than 1 minute for the certifying physician
to document the date that the face-to-face encounter occurred (\1/60\ =
0.0166 hours). The estimated burden for the certifying physician to
continue to document the date of the face-to-face encounter would be
0.0166 hours per certification or 51,405 hours total (0.0166 hours x
3,096,680 initial home health episodes). The estimated cost for the
certifying physician to continue to document the date of the face-to-
face encounter would be $1.87 per certification (0.0166 x $112.91) or
$5,790,792 total ($1.87 x 3,096,680) for CY 2015. Therefore, in
eliminating the face-to-face encounter narrative requirement, as
proposed in section III.B. of the proposed rule, we estimate that
burden and costs will be reduced for certifying physicians by 206,548
hours (257,953-51,405) and $23,348,967 ($29,139,759-$5,790,792),
respectively for CY 2015.
Comment: A commenter believed that the time estimates were under-
reported for the HHA administrator (15 minutes (\15/60\ = 0.25 hours))
to review the revised certification form. The commenter stated that the
administrator would have to review the pertinent statutory and
regulatory references to ensure that the certification form is in
compliance.
Response: Since all certification requirements are remaining the
same, except for the elimination of the narrative, the administrator
should already be knowledgeable about the current statutory and
regulatory requirements with regard to certifying patient eligibility
for the home health benefit. Therefore, we will maintain our original
estimate that it will take no more than 15 minutes for the HHA
administrator to review the necessary changes to the certification form
as a result of the elimination of the face-to-face encounter narrative.
2. Proposed Clarification on When Documentation of a Face-to-Face
Encounter Is Required
To determine when documentation of a patient's face-to-face
encounter is required under sections 1814(a)(2)(C) and 1835(a)(2)(A) of
the Act, we proposed to clarify that the face-to-face encounter
requirement is applicable for certifications (not recertifications),
rather than initial episodes. A certification (versus recertification)
is generally considered to be any time that a new SOC OASIS is
completed to initiate care. We estimate that of the 6,562,856 episodes
in the CY 2012 home health Datalink file, 3,096,680 SOC assessments
were performed on initial home health episodes. If this proposal is
implemented, an additional 830,287 episodes would require documentation
of a face-to-face encounter for subsequent episodes that were initiated
with a new SOC OASIS assessment. We estimate that it would take no more
than 1 minute for the certifying physician to document the date that
the face-to-face encounter occurred (\1/60\ = 0.0166 hours). The
estimated burden for the certifying physician to document the date of
the face-to-face encounter for each certification (any time a new SOC
OASIS is completed to initiate care) would be 0.0166 hours or 13,783
total hours (0.0166 hours x 830,287 additional home health episodes).
The estimated cost for the certifying physician to document the date of
the face-to-face encounter for each additional home health episode
would be $1.87 per certification (0.0166 x $112.91) or $1,552,637 total
($1.87 x 830,287) for CY 2015.

Table 38--Estimated One-Time Form Revision Burden for HHAs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total time
OMB# Requirement HHAs Responses Hr. burden (hours) Total dollars
-----------------------------------------------------------------------------------------------------------------------------------------
0938-1083................... Sec. 424.22(a)(1)(v) 11,521 1 0.5 5,761 $245,397
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 66111]]

Table 39--Estimated Burden Reduction for Certifying Physicians
[No longer drafting a face-to-face encounter narrative]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total time
OMB# Requirement Certifications Responses Hr. burden (hours) Total dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
0938-1083....................... Sec. 424.22(a)(1)(v) 3,096,680 1 (0.0667) (206,548) ($23,348,967)
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 40--Estimated Burden for Certifying Physicians
[Documenting the date of the face-to-face encounter for additional certifications]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total time
OMB# Requirement Certifications Responses Hr. burden (hours) Total dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
0938-1083.......................... Sec. 424.22(a)(1)(v) 830,287 1 0.0166 13,783 $1,552,637
--------------------------------------------------------------------------------------------------------------------------------------------------------

In summary, all of the changes to the face-to-face encounter
requirements in section III.B of this final rule, including changes to
Sec. 424.22(a)(1)(v), will result in an estimated net reduction in
burden for certifying physicians of 192,765 hours or $21,796,330 (see
Tables 39 and 40). The changes to the face-to-face encounter
requirements at Sec. 424.22(a)(1)(v) will result in a one-time burden
for HHAs to revise the certification form of 5,761 hours or $245,397
(Table 38 above).

B. Proposed Change to the Therapy Reassessment Timeframes

Currently, Sec. 409.44(c) requires that patient's function must be
initially assessed and periodically reassessed by a qualified
therapist, of the corresponding discipline for the type of therapy
being provided, using a method which would include objective
measurement. If more than one discipline of therapy is being provided,
a qualified therapist from each of the disciplines must perform the
assessment and periodic reassessments. The measurement results and
corresponding effectiveness of the therapy, or lack thereof, must be
documented in the clinical record. At least every 30 days a qualified
therapist (instead of an assistant) must provide the needed therapy
service and functionally reassess the patient. If a patient is expected
to require 13 and/or 19 therapy visits, a qualified therapist (instead
of an assistant) must provide all of the therapy services on the 13th
visit and/or 19th therapy visit and functionally reassess the patient
in accordance with Sec. 409.44(c)(2)(i)(A). When the patient resides
in a rural area or if the patient is receiving multiple types of
therapy, a therapist from each discipline (not an assistant) must
assess the patient after the 10th therapy visit but no later than the
13th therapy visit and after the 16th therapy visit but no later than
the 19th therapy visit for the plan of care. In instances where the
frequency of a particular discipline, as ordered by a physician, does
not make it feasible for the reassessment to occur during the specified
timeframes without providing an extra unnecessary visit or delaying a
visit, then it is acceptable for the qualified therapist from that
discipline to provide all of the therapy and functionally reassess the
patient during the visit associated with that discipline that is
scheduled to occur closest to the 14th and/or 20th Medicare-covered
therapy visit, but no later than the 13th and/or 19th Medicare-covered
therapy visit. When a therapy reassessment is missed, any visits for
that discipline prior to the next reassessment are non-covered.
To lessen the burden on HHAs of counting visits and to reduce the
risk of non-covered visits so that therapists can focus more on
providing quality care for their patients, we are simplifying Sec.
409.44(c) to require that therapy reassessments must be performed at
least once every 30 calendar days. The requirement to perform a therapy
reassessment at least once every 30 calendar days would apply to all
episodes regardless of the number of therapy visits provided. All other
requirements related to therapy reassessments would remain unchanged. A
qualified therapist (instead of an assistant), from each therapy
discipline provided, must provide the ordered therapy service and
functionally reassess the patient using a method which would include
objective measurement. The measurement results and corresponding
effectiveness of the therapy, or lack thereof, must be documented in
the clinical record.
In the CY 2011 HH PPS final rule we stated that the therapy
reassessment requirements in Sec. 409.44(c) are already part of the
home health CoPs, as well as from accepted standards of clinical
practice, and therefore, we believe that these requirements do not
create any additional burden on HHAs (75 FR 70454). As stated in the CY
2011 HH PPS final rule, longstanding CoP policy at Sec. 484.55
requires HHAs to document progress toward goals and the regulations at
Sec. 409.44(c)(2)(i) already mandate that for therapy services to be
covered in the home health setting, the services must be considered
under accepted practice to be a specific, safe, and effective treatment
for the beneficiary's condition. The functional assessment does not
require a special visit to the patient, but is conducted as part of a
regularly scheduled therapy visit. Functional assessments are necessary
to demonstrate progress (or the lack thereof) toward therapy goals, and
are already part of accepted standards of clinical practice, which
include assessing a patient's function on an ongoing basis as part of
each visit. The CY 2011 HH PPS final rule goes on to state that both
the functional assessment and its accompanying documentation are
already part of existing HHA practices and accepted standards of
clinical practice. Therefore, we continue to believe that simplifying
the required reassessment timeframes from every 30 days and prior to
the 14th and 20th visits to every 30 calendar days does not place any
new documentation requirements on HHAs.
We are revising the currently approved PRA package (OMB# 0938-1083)
to describe these changes to the regulatory text.

C. Submission of PRA-Related Comments

If you comment on these information collection and recordkeeping
requirements, please submit your comments electronically as specified
in the ADDRESSES section of this final rule.
PRA-specific comments must be received on/by December 8, 2014.

[[Page 66112]]

V. Regulatory Impact Analysis

A. Statement of Need

Section 1895(b)(1) of the Act requires the Secretary to establish a
HH PPS for all costs of HH services paid under Medicare. In addition,
section 1895(b)(3)(A) of the Act requires (1) the computation of a
standard prospective payment amount include all costs for home health
services covered and paid for on a reasonable cost basis and that such
amounts be initially based on the most recent audited cost report data
available to the Secretary, and (2) the standardized prospective
payment amount be adjusted to account for the effects of case-mix and
wage levels among HHAs. Section 1895(b)(3)(B) of the Act addresses the
annual update to the standard prospective payment amounts by the
applicable percentage increase. Section 1895(b)(4) of the Act governs
the payment computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of
the Act require the standard prospective payment amount to be adjusted
for case-mix and geographic differences in wage levels. Section
1895(b)(4)(B) of the Act requires the establishment of appropriate
case-mix adjustment factors for significant variation in costs among
different units of services. Lastly, section 1895(b)(4)(C) of the Act
requires the establishment of wage adjustment factors that reflect the
relative level of wages, and wage-related costs applicable to home
health services furnished in a geographic area compared to the
applicable national average level.
Section 1895(b)(5) of the Act gives the Secretary the option to
make changes to the payment amount otherwise paid in the case of
outliers because of unusual variations in the type or amount of
medically necessary care. Section 1895(b)(3)(B)(v) of the Act requires
HHAs to submit data for purposes of measuring health care quality, and
links the quality data submission to the annual applicable percentage
increase. Also, section 1886(d)(2)(D) of the Act requires that home
health services furnished in a rural area for episodes and visits
ending on or after April 1, 2010, and before January 1, 2016, receive
an increase of 3 percent the payment amount otherwise made under
section 1895 of the Act.
Section 3131(a) of the Affordable Care Act mandates that starting
in CY 2014, the Secretary must apply an adjustment to the national,
standardized 60-day episode payment rate and other amounts applicable
under section 1895(b)(3)(A)(i)(III) of the Act to reflect factors such
as changes in the number of visits in an episode, the mix of services
in an episode, the level of intensity of services in an episode, the
average cost of providing care per episode, and other relevant factors.
In addition, section 3131(a) of the Affordable Care Act mandates that
rebasing must be phased-in over a 4-year period in equal increments,
not to exceed 3.5 percent of the amount (or amounts) as of the date of
enactment (2010) under section 1895(b)(3)(A)(i)(III) of the Act, and be
fully implemented in CY 2017.

B. Overall Impact

We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This final rule has been designated as economically
significant under section 3(f)(1) of Executive Order 12866, since the
aggregate transfer impacts in calendar year 2015 will exceed the $100
million threshold. The net transfer impacts are estimated to be -$60
million. Furthermore, we estimate a net reduction of $21.55 million in
calendar year 2015 burden costs related to the certification
requirements for home health agencies and associated physicians.
Lastly, this final rule is a major rule under the Congressional Review
Act and as a result, we have prepared a regulatory impact analysis
(RIA) that, to the best of our ability, presents the costs and benefits
of the rulemaking. In accordance with the provisions of Executive Order
12866, this regulation was reviewed by the Office of Management and
Budget.
The update set forth in this rule applies to Medicare payments
under HH PPS in CY 2015. Accordingly, the following analysis describes
the impact in CY 2015 only. We estimate that the net impact of the
proposals in this rule is approximately $60 million in decreased
payments to HHAs in CY 2015. We applied a wage index budget neutrality
factor and a case-mix weights budget neutrality factor to the rates as
discussed in section III.D.4. of this final rule; therefore, the
estimated impact of the 2015 wage index in section III.D.3. of this
final rule and the recalibration of the case-mix weights for 2015 in
section III.C. of this final rule is zero. The -$60 million impact
reflects the distributional effects of the 2.1 percent home health
payment update percentage ($390 million increase) and the effects of
the second year of the four-year phase-in of the rebasing adjustments
to the national, standardized 60-day episode payment amount, the
national per-visit payment rates, and the NRS conversion factor for an
impact of -2.4 percent ($450 million decrease). The $60 million in
decreased payments is reflected in the last column of the first row in
Table 41 as a 0.3 percent decrease in expenditures when comparing
estimated CY 2014 payments to estimated CY 2015 payments.
The RFA requires agencies to analyze options for regulatory relief
of small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of less than $7.5 million to $38.5 million in any one year.
For the purposes of the RFA, we consider all HHAs small entities as
that term is used in the RFA. Individuals and states are not included
in the definition of a small entity. The economic impact assessment is
based on estimated Medicare payments (revenues) and HHS's practice in
interpreting the RFA is to consider effects economically
``significant'' only if greater than 5 percent of providers reach a
threshold of 3 to 5 percent or more of total revenue or total costs.
The majority of HHAs' visits are Medicare-paid visits and therefore the
majority of HHAs' revenue consists of Medicare payments. Based on our
analysis for this final rule, which incorporates additional Medicare
home health claims data that were not available at the time the CY 2015
HH PPS proposed rule was published, we conclude that the policies final
in this rule will result in an estimated total impact of 3 to 5 percent
or more on Medicare revenue for greater

[[Page 66113]]

than 5 percent of HHAs. Therefore, the Secretary has determined that
this final rule will have a significant economic impact on a
substantial number of small entities. Further detailed analysis is
presented below and in Table 41, by HHA classification, type, and
location.
Executive Order 13563 specifies, to the extent practicable,
agencies should assess the costs of cumulative regulations. However,
given potential utilization pattern changes, wage index changes,
changes to the market basket forecasts, and unknowns regarding future
policy changes, we believe it is neither practicable nor appropriate to
forecast the cumulative impact of the rebasing adjustments on Medicare
payments to HHAs for future years at this time. Changes to the Medicare
program may continue to be made as a result of the Affordable Care Act
or new statutory provisions. Although these changes may not be specific
to the HH PPS, the nature of the Medicare program is such that the
changes may interact and the complexity of the interactions would make
it difficult to predict accurately the full scope of the impact upon
HHAs for future years beyond CY 2015. We note that the rebasing
adjustments to the national, standardized 60-day episode payment rate
and the national per-visit rates are capped at the statutory limit of
3.5 percent of the CY 2010 amounts for each year, 2014 through 2017,
and the NRS rebasing adjustment will be -2.82 percent in each year,
2014 through 2017 (as described in section II.C. of this final rule).
In addition, section 1102(b) of the Act requires us to prepare a
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 604 of RFA. For purposes of section
1102(b) of the Act, we define a small rural hospital as a hospital that
is located outside of a metropolitan statistical area and has fewer
than 100 beds. This final rule applies to HHAs. Therefore, the
Secretary has determined that this rule will not have a significant
economic impact on the operations of small rural hospitals.

C. Detailed Economic Analysis

This final rule sets forth updates for CY 2015 to the HH PPS rates
contained in the CY 2014 HH PPS final rule (78 FR 72304 through 72308).
The impact analysis of this final rule presents the estimated
expenditure effects of policy changes final in this rule. We use the
latest data and best analysis available, but we do not make adjustments
for future changes in such variables as number of visits or case-mix.
This analysis incorporates the latest estimates of growth in
service use and payments under the Medicare home health benefit,
primarily using Medicare claims data for CY 2013. We note that certain
events may combine to limit the scope or accuracy of our impact
analysis, because such an analysis is future-oriented and, thus,
susceptible to errors resulting from other changes in the impact time
period assessed. Some examples of such possible events are newly-
legislated general Medicare program funding changes made by the
Congress, or changes specifically related to HHAs. In addition, changes
to the Medicare program may continue to be made as a result of the
Affordable Care Act or new statutory provisions. Although these changes
may not be specific to the HH PPS, the nature of the Medicare program
is such that the changes may interact and the complexity of the
interactions could make it difficult to predict accurately the full
scope of the impact upon HHAs.
Table 41 represents how HHA revenues are likely to be affected by
the policy changes finalized in this rule. For this analysis, we used
an analytic file of CY 2013 home health claims data (as of June 30,
2014) for dates of service that ended on or before December 31, 2013,
linked to OASIS assessments. The first column of Table 41 classifies
HHAs according to a number of characteristics including provider type,
geographic region, and urban and rural locations. The third column
shows the payment effects of CY 2015 wage index. The fourth column
shows the payment effects of the CY 2015 case-mix weights. The fifth
column shows the effects of the rebasing adjustments to the national,
standardized 60-day episode payment rate, the national per-visit
payment rates, and NRS conversion factor. The sixth column shows the
effects of the CY 2015 home health payment update percentage (the home
health market basket update adjusted for multifactor productivity as
discussed in section III.D.1. of this final rule). The last column
shows the overall payment effects of all the policies discussed in this
final rule.
As illustrated in Table 41, the combined effects of all of the
changes vary by specific types of providers and by location. A
substantial amount of the variation in the estimated impacts of the
policies finalized in this rule in different areas of the country can
be attributed to variations in the CY 2015 wage index used to adjust
payments under the HH PPS and to the effects of the recalibration of
the HH PPS case-mix weights. For example, the estimated impact due to
the recalibration of the HH PPS case-mix weights for the West South
Central census region is a 2.2 percent decrease in payments for CY
2015. The case-mix weights for third or later episodes of care with no
or low therapy generally decreased as a result of the recalibration of
the HH PPS case-mix weights (see section III.C. of this final rule). In
the West South Central region, approximately one-third of episodes are
either the first or second episode of care and nearly two-thirds of
episodes are the third or later episode of care (analysis of episodes
with 0-19 therapy visits). This differs drastically from the rest of
the nation where over two-thirds of episodes are either the first or
second episode of care and less than one-third of episodes are the
third or later episode of care (analysis of episodes with 0-19 therapy
visits). Thus, the West South Central census region experiences a
larger estimated reduction in payments due to the recalibration of the
case-mix weights because it has a much larger share of episodes that
are the third or later episode compared to the rest of the nation.
Instances where the impact, due to the rebasing adjustments, is less
than others can be attributed to differences in the incidence of
outlier payments and LUPA episodes, which are paid using the national
per-visit payment rates that are subject to payment increases due to
the rebasing adjustments. We note that some individual HHAs within the
same group may experience different impacts on payments than others due
to the distributional impact of the CY 2015 wage index, the extent to
which HHAs had episodes in case-mix groups where the case-mix weight
decreased for CY 2015 relative to CY 2014, and the degree of Medicare
utilization.
For CY 2015, the average impact for all HHAs due to the effects of
rebasing is an estimated 2.4 percent decrease in payments. The overall
impact for all HHAs as a result of this final rule is a decrease of
approximately 0.3 percent in estimated total payments from CY 2014 to
CY 2015.

[[Page 66114]]

Table 41--Estimated Home Health Agency Impacts by Facility Type and Area of the Country, CY 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
CY 2015 case- CY 2015 HH Impact of all
Number of CY 2015 wage mix weights Rebasing \3\ payment CY 2015
agencies index \1\ \2\ (percentage) update policies
(percentage) (percentage) percentage \4\ (percentage)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Agencies............................................ 11,781 0.0 0.0 -2.4 2.1 -0.3
Facility Type and Control:
Free-Standing/Other Vol/NP.......................... 1,062 0.3 1.0 -2.3 2.1 1.1
Free-Standing/Other Proprietary..................... 9,194 -0.1 -0.5 -2.4 2.1 -0.9
Free-Standing/Other Government...................... 402 0.4 0.5 -2.3 2.1 0.7
Facility-Based Vol/NP............................... 774 0.2 1.6 -2.3 2.1 1.6
Facility-Based Proprietary.......................... 115 -0.2 1.3 -2.3 2.1 0.9
Facility-Based Government........................... 234 0.2 1.4 -2.4 2.1 1.3
Subtotal: Freestanding.......................... 10,658 0.0 -0.2 -2.4 2.1 -0.5
Subtotal: Facility-based........................ 1,123 0.2 1.5 -2.3 2.1 1.5
Subtotal: Vol/NP................................ 1,836 0.3 1.2 -2.3 2.1 1.3
Subtotal: Proprietary........................... 9,309 -0.1 -0.5 -2.4 2.1 -0.9
Subtotal: Government............................ 636 0.3 0.9 -2.3 2.1 1.0
Facility Type and Control: Rural:
Free-Standing/Other Vol/NP.......................... 192 0.1 1.3 -2.3 2.1 1.2
Free-Standing/Other Proprietary..................... 140 0.9 0.6 -2.4 2.1 1.2
Free-Standing/Other Government...................... 466 0.2 -0.6 -2.4 2.1 -0.7
Facility-Based Vol/NP............................... 251 0.6 1.5 -2.5 2.1 1.8
Facility-Based Proprietary.......................... 27 0.1 0.3 -2.5 2.1 0.0
Facility-Based Government........................... 137 0.6 1.3 -2.3 2.1 1.7
Facility Type and Control: Urban:
Free-Standing/Other Vol/NP.......................... 922 0.3 1.0 -2.3 2.1 1.1
Free-Standing/Other Proprietary..................... 8,870 -0.1 -0.5 -2.4 2.1 -0.9
Free-Standing/Other Government...................... 164 0.3 0.5 -2.4 2.1 0.5
Facility-Based Vol/NP............................... 523 0.2 1.6 -2.3 2.1 1.6
Facility-Based Proprietary.......................... 88 -0.2 1.4 -2.3 2.1 1.0
Facility-Based Government........................... 97 0.0 1.4 -2.4 2.1 1.1
Facility Location: Urban or Rural:
Rural............................................... 1,117 0.4 0.4 -2.4 2.1 0.5
Urban............................................... 10,664 0.0 0.0 -2.4 2.1 -0.3
Facility Location: Region of the Country:
Northeast........................................... 882 0.4 0.9 -2.2 2.1 1.2
Midwest............................................. 3,165 0.2 0.8 -2.5 2.1 0.6
South............................................... 5,722 -0.3 -0.9 -2.4 2.1 -1.5
West................................................ 1,962 0.5 0.9 -2.4 2.1 1.1
Other............................................... 50 1.7 1.8 -2.4 2.1 3.2
Facility Location: Region of the Country (Census
Region):
New England......................................... 340 0.8 0.9 -2.2 2.1 1.6
Mid Atlantic........................................ 542 0.1 0.9 -2.1 2.1 1.0
East North Central.................................. 2,415 0.2 0.6 -2.5 2.1 0.4
West North Central.................................. 750 0.1 1.6 -2.4 2.1 1.4
South Atlantic...................................... 2,054 -0.1 0.0 -2.4 2.1 -0.4
East South Central.................................. 440 -0.6 0.0 -2.5 2.1 -1.0
West South Central.................................. 3,228 -0.5 -2.2 -2.4 2.1 -3.0
Mountain............................................ 689 0.4 1.5 -2.4 2.1 1.6
Pacific............................................. 1,273 0.5 0.6 -2.4 2.1 0.8
Facility Size (Number of 1st Episodes):
< 100 episodes...................................... 2,924 -0.3 -0.3 -2.4 2.1 -0.9
100 to 249.......................................... 2,767 -0.3 -0.6 -2.4 2.1 -1.2
250 to 499.......................................... 2,569 -0.2 -0.8 -2.4 2.1 -1.3
500 to 999.......................................... 1,878 0.0 -0.2 -2.4 2.1 -0.5
1,000 or More....................................... 1,643 0.1 0.3 -2.4 2.1 0.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2013 Medicare claims data for episodes ending on or before December 31, 2013 (as of June 30, 2014) for which we had a linked OASIS
assessment.
\1\ The impact of the CY 2015 home health wage index reflects the transition to new CBSA designations as outlined in section III.D.3 this final rule
offset by the wage index budget neutrality factor described in section III.D.4 this final rule.
\2\ The impact of the CY 2015 home health case-mix weights reflects the recalibration of the case-mix weights as outlined in section III.C of this final
rule offset by the case-mix weight budget neutrality factor described in section III.D.4 of this final rule.
\3\ The impact of rebasing includes the rebasing adjustments to the national, standardized 60-day episode payment rate (-2.73 percent after the CY 2014
payment rate was adjusted for the wage index and case-mix weight budget neutrality factors), the national per-visit rates (+3.26 percent), and the NRS
conversion factor (-2.82%). The estimated impact of the NRS conversion factor rebasing adjustment is an overall -0.01 percent decrease in estimated
payments to HHAs. The overall impact of all the rebasing adjustments finalized in the CY 2014 HH PPS proposed rule and implemented for CY 2015 are
lower than the overall impact in the CY 2014 due to the case-mix budget neutrality factor and an increase in estimated outlier payments. As the
national per-visit rates increase and the national, standardized 60-day episode rate decreases more episodes qualify for outlier payments. In
addition, we decreased the fixed-dollar loss (FDL) ratio from 0.67 to 0.45 effective CY 2013 in order to qualify more episodes as outliers, and we use
CY 2013 utilization in simulating impacts for the CY 2015 HH PPS final rule.
\4\ The CY 2015 home health payment update percentage reflects the home health market basket update of 2.6 percent, reduced by a 0.5 percentage point
multifactor productivity (MFP) adjustment as required under section 1895(b)(3)(B)(vi)(I) of the Act, as described in section III.D.1 of this final
rule.

[[Page 66115]]

Region Key:
New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic = Pennsylvania, New Jersey, New York; South
Atlantic = Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia; East North Central =
Illinois, Indiana, Michigan, Ohio, Wisconsin; East South Central = Alabama, Kentucky, Mississippi, Tennessee; West North Central = Iowa, Kansas,
Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central = Arkansas, Louisiana, Oklahoma, Texas; Mountain = Arizona, Colorado,
Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; Pacific = Alaska, California, Hawaii, Oregon, Washington; Outlying = Guam, Puerto Rico, Virgin
Islands.

D. Anticipated Effects

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any one year of
$100 million in 1995 dollars, updated annually for inflation. In 2014,
that threshold is approximately $141 million. This final rule is not
anticipated to have an effect on state, local, or tribal governments in
the aggregate, or by the private sector, of $141 million or more in CY
2015.

E. Alternatives Considered

In recalibrating the HH PPS case-mix weights for CY 2015, as
discussed in section III.C. of this final rule, we considered adjusting
the payment rates in section III.D.4 to make the recalibration budget
neutral only with regard to our estimate of real case-mix growth
between CY 2012 and the CY 2013. Section 1895(b)(3)(B)(iv) of the Act
gives CMS the authority to implement payment reductions for nominal
case-mix growth--changes in case-mix that are unrelated to actual
changes in patient health status. However, instead of implementing a
case-mix budget neutrality factor that only reflects our estimate of
real increases in patient severity; we finalized the recalibration of
the case-mix weights in a fully budget-neutral manner. We will continue
to monitor case-mix growth (both real and nominal case-mix growth) as
more data become available.
With regard to the adoption of the revised OMB delineations for
purposes of calculating the wage index, we will implement the new OMB
delineations as we believe they will result in wage index values being
more representative of the actual costs of labor in a given area. We
considered having no transition period and fully implementing the new
OMB delineations beginning in CY 2015. However, this would not provide
time for HHAs to adapt to the new OMB delineations. We believe that a
transition period would help to mitigate the potential for resulting
short-term instability and negative impact on certain HHAs, and to
provide time for HHAs to adjust to their new labor market area
delineations. In determining an appropriate transition methodology,
consistent with the objectives set forth in the FY 2006 SNF PPS final
rule (70 FR 45041), we first considered transitioning the wage index to
the revised OMB delineations over a number of years in order minimize
the impact of the wage index changes in a given year. However, the
transition must be balanced against the need to ensure the most
accurate payments possible, which called for a faster transition to the
revised OMB delineations. As such, utilizing a one-year (rather than a
multiple year) transition with a blended wage index in CY 2015 will
strike the best balance. Second, we considered what type of blend would
be appropriate for purposes of the transition wage index. We are
finalizing that HHAs will receive a one-year blended wage index using
50 percent of their CY 2015 wage index based on the new OMB
delineations and 50 percent of their CY 2015 wage index based on the FY
2014 OMB delineations. A 50/50 blend best mitigates the negative
payment impacts associated with the implementation of the new OMB
delineations. While we considered alternatives to the 50/50 blend, this
type of split balances the increases and decreases in wage index values
as well as provides a readily understandable calculation for HHAs.
Next, we considered whether or not the blended wage index should be
used for all HHAs or for only a subset of HHAs, such as those HHAs that
would experience a decrease in their respective wage index values due
to implementation of the revised OMB delineations. As required in
section 1895(b)(3) of the Act, the wage index adjustment must be
implemented in a budget-neutral manner. If we were to apply the
transition policy only to those HHAs that would experience a decrease
in their respective wage index values due to implementation of the
revised OMB delineations, the wage index budget neutrality factor,
discussed in section III.D.4, would result in reduced base rates for
all HHAs as compared to the budget neutrality factor that results from
applying the blended wage index to all HHAs.
For the reasons discussed above, we believe that finalizing our
proposal to use a one-year transition with a 50/50 blended wage index
in CY 2015 as this policy balances the interests of all HHAs and will
best achieve our objective of providing relief to negatively impacted
HHAs.
Section 3131(a) of the Affordable Care Act mandates that starting
in CY 2014, the Secretary must apply an adjustment to the national,
standardized 60-day episode payment rate and other amounts applicable
under section 1895(b)(3)(A)(i)(III) of the Act to reflect factors such
as changes in the number of visits in an episode, the mix of services
in an episode, the level of intensity of services in an episode, the
average cost of providing care per episode, and other relevant factors.
In addition, section 3131(a) of the Affordable Care Act mandates that
rebasing must be phased-in over a 4-year period in equal increments,
not to exceed 3.5 percent of the amount (or amounts) as of the date of
enactment (2010) under section 1895(b)(3)(A)(i)(III) of the Act, and be
fully implemented in CY 2017. Therefore, in the CY 2014 HH PPS final
rule (78 FR 77256), we finalized rebasing adjustments to the national,
standardized 60-day episode payment amount, the national per-visit
rates and the NRS conversion factor. As we noted in the CY 2014 HH PPS
final rule, because section 3131(a) of the Affordable Care Act requires
a four year phase-in of rebasing, in equal increments, to start in CY
2014 and be fully implemented in CY 2017, we do not have the discretion
to delay, change, or eliminate the rebasing adjustments once we have
determined that rebasing is necessary (78 FR 72283).
Section 1895(b)(3)(B) of the Act requires that the standard
prospective payment amounts for CY 2015 be increased by a factor equal
to the applicable home health market basket update for those HHAs that
submit quality data as required by the Secretary. For CY 2015, section
3401(e) of the Affordable Care Act, requires that, in CY 2015 (and in
subsequent calendar years), the market basket update under the HHA
prospective payment system, as described in section 1895(b)(3)(B) of
the Act, be annually adjusted by changes in economy-wide productivity.
Beginning in CY 2015, section 1895(b)(3)(B)(vi)(I) of the Act, as
amended by section 3401(e) of the Affordable Care Act, requires the
application of the productivity

[[Page 66116]]

adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act to the
HHA PPS for CY 2015 and each subsequent CY. The -0.5 percentage point
productivity adjustment to the CY 2015 home health market basket update
(2.6 percent) is discussed in the preamble of this rule and is not
discretionary as it is a requirement in section 1895(b)(3)(B)(vi)(I) of
the Act (as amended by the Affordable Care Act).

F. Accounting Statement and Table

As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars_a004_a-4), in Table 42, we have
prepared an accounting statement showing the classification of the
transfers and costs associated with the provisions of this final rule.
Table 42 provides our best estimate of the decrease in Medicare
payments under the HH PPS as a result of the changes finalized in this
rule. Table 42 also reflects the estimated change in costs and burden
for certifying physicians and HHAs as a result of the changes to the
face-to-face encounter requirements finalized in section III.B. We
estimate a net reduction in burden for certifying physicians of 192,765
hours or $21,796,330 (see section IV of this rule). In addition, Table
42 reflects our estimate of a one-time burden for HHAs to revise the
certification form of 5,761 hours or $245,397 as described in section
IV. of this rule.

Table 42--Accounting Statement: Classification of Estimated Transfers
and Costs, From the CYs 2014 to 2015 *
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized monetized transfers. -$60 million.
From Whom to Whom?............. Federal Government to HHAs.
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
Annualized Monetized Net Burden -$21.55 million.
for Physicians Certifying
Patient Eligibility for Home
Health Services & HHAs for
Certification Form Revision.
------------------------------------------------------------------------
* The estimates reflect 2014 dollars.

G. Conclusion

In conclusion, we estimate that the net impact of this final rule
is a decrease in Medicare payments to HHAs of $60 million for CY 2015.
The $60 million decrease in estimated payments for CY 2015 reflects the
distributional effects of the 2.1 percent CY 2015 home health payment
update percentage ($390 million increase) and the second year of the 4-
year phase-in of the rebasing adjustments required by section 3131(a)
of the Affordable Care Act ($450 million decrease). Also, starting in
CY 2015, certifying physicians are estimated to incur a net reduction
in burden costs of $21,796,330 and HHAs are expected to incur a one-
time increase in burden costs to revise the certification form of
$245,397 as a result of the elimination of the face-to-face encounter
narrative requirement finalized in section III.B. This analysis,
together with the remainder of this preamble, constitutes the
Regulatory Flexibility Analysis.

VI. Federalism Analysis

Executive Order 13132 on Federalism (August 4, 1999) establishes
certain requirements that an agency must meet when it promulgates a
final rule that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. We have reviewed this final rule under the threshold
criteria of Executive Order 13132, Federalism, and have determined that
it will not have substantial direct effects on the rights, roles, and
responsibilities of states, local or tribal governments.

List of Subjects

42 CFR Part 409

Health facilities, Medicare.

42 CFR Part 424

Emergency medical services, Health facilities, Health professions,
Medicare, and Reporting and recordkeeping requirements.

42 CFR Part 484

Health facilities, Health professions, Medicare, and Reporting and
recordkeeping requirements.

42 CFR Part 488

Administrative practice and procedure, Health facilities, Medicare,
and Reporting and recordkeeping requirements.

42 CFR Part 498

Health facilities, Medicare, Reporting and recordkeeping
requirements.

For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 409--HOSPITAL INSURANCE BENEFITS

0
1. The authority citation for part 409 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

Sec. 409.44 [Amended]

0
2. Section 409.44 is amended by--
0
a. Removing ``intermediary's'' from paragraph (a) and adding ``Medicare
Administrative Contractor's'' in its place.
0
b. Adding ``calendar'' between ``30'' and ``days'' in paragraph
(c)(2)(i)(B).
0
c. Removing paragraphs (c)(2)(i)(C) and (D).
0
d. Redesignating paragraphs (c)(2)(i)(E) through (H) as paragraphs
(c)(2)(i)(C) through (F).
0
e. Removing ``(c)(2)(i)(A), (B), (C), and (D) of this section,'' from
newly redesignated paragraph (c)(2)(i)(C) introductory text and adding
``(c)(2)(i)(A) and (B) of this section,'' in its place.
0
f. Removing ``(c)(2)(i)(E)(2) and (c)(2)(i)(E)(3) of this section are
met,'' from newly redesignated paragraph (c)(2)(i)(C)(1) and adding
``(c)(2)(i)(C)(2) and (c)(2)(i)(C)(3) of this section are met,'' in its
place.
0
g. Removing ``Sec. 409.44(c)(2)(i)(H) of this section.'' from newly
redesignated paragraph (c)(2)(i)(C)(3) and adding ``paragraph
(c)(2)(i)(F) of this section.'' in its place.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
3. The authority citation for part 424 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

0
4. Section 424.22 is amended by--

[[Page 66117]]

0
a. Revising paragraphs (a) and (b) and adding new paragraph (c).
0
b. Removing ``(d)(i)'' from paragraph (d)(2) and adding ``(d)(1)'' in
its place.
The revisions read as follows:

Sec. 424.22 Requirements for home health services.

* * * * *
(a) Certification--(1) Content of certification. As a condition for
payment of home health services under Medicare Part A or Medicare Part
B, a physician must certify the patient's eligibility for the home
health benefit, as outlined in sections 1814(a)(2)(C) and 1835(a)(2)(A)
of the Act, as follows in paragraphs (a)(1)(i) through (v) of this
section. The patient's medical record, as specified in paragraph (c) of
this section, must support the certification of eligibility as outlined
in paragraph (a)(1)(i) through (v) of this section.
(i) The individual needs or needed intermittent skilled nursing
care, or physical therapy or speech-language pathology services as
defined in Sec. 409.42(c) of this chapter. If a patient's underlying
condition or complication requires a registered nurse to ensure that
essential non-skilled care is achieving its purpose, and necessitates a
registered nurse be involved in the development, management, and
evaluation of a patient's care plan, the physician will include a brief
narrative describing the clinical justification of this need. If the
narrative is part of the certification form, then the narrative must be
located immediately prior to the physician's signature. If the
narrative exists as an addendum to the certification form, in addition
to the physician's signature on the certification form, the physician
must sign immediately following the narrative in the addendum.
(ii) Home health services are or were required because the
individual is or was confined to the home, as defined in sections
1835(a) and 1814(a) of the Act, except when receiving outpatient
services.
(iii) A plan for furnishing the services has been established and
will be or was periodically reviewed by a physician who is a doctor of
medicine, osteopathy, or podiatric medicine, and who is not precluded
from performing this function under paragraph (d) of this section. (A
doctor of podiatric medicine may perform only plan of treatment
functions that are consistent with the functions he or she is
authorized to perform under State law.)
(iv) The services will be or were furnished while the individual
was under the care of a physician who is a doctor of medicine,
osteopathy, or podiatric medicine.
(v) A face-to-face patient encounter, which is related to the
primary reason the patient requires home health services, occurred no
more than 90 days prior to the home health start of care date or within
30 days of the start of the home health care and was performed by a
physician or allowed non-physician practitioner as defined in paragraph
(a)(1)(v)(A) of this section. The certifying physician must also
document the date of the encounter as part of the certification.
(A) The face-to-face encounter must be performed by one of the
following:
(1) The certifying physician himself or herself.
(2) A physician, with privileges, who cared for the patient in an
acute or post-acute care facility from which the patient was directly
admitted to home health.
(3) A nurse practitioner or a clinical nurse specialist (as those
terms are defined in section 1861(aa)(5) of the Act) who is working in
accordance with State law and in collaboration with the certifying
physician or in collaboration with an acute or post-acute care
physician with privileges who cared for the patient in the acute or
post-acute care facility from which the patient was directly admitted
to home health.
(4) A certified nurse midwife (as defined in section 1861(gg) of
the Act) as authorized by State law, under the supervision of the
certifying physician or under the supervision of an acute or post-acute
care physician with privileges who cared for the patient in the acute
or post-acute care facility from which the patient was directly
admitted to home health.
(5) A physician assistant (as defined in section 1861(aa)(5) of the
Act) under the supervision of the certifying physician or under the
supervision of an acute or post-acute care physician with privileges
who cared for the patient in the acute or post-acute care facility from
which the patient was directly admitted to home health.
(B) The face-to-face patient encounter may occur through
telehealth, in compliance with section 1834(m) of the Act and subject
to the list of payable Medicare telehealth services established by the
applicable physician fee schedule regulation.
(1) Timing and signature. The certification of need for home health
services must be obtained at the time the plan of care is established
or as soon thereafter as possible and must be signed and dated by the
physician who establishes the plan.
(2) [Reserved]
(2) [Reserved]
(b) Recertification--(1) Timing and signature of recertification.
Recertification is required at least every 60 days when there is a need
for continuous home health care after an initial 60-day episode.
Recertification should occur at the time the plan of care is reviewed,
and must be signed and dated by the physician who reviews the plan of
care. Recertification is required at least every 60 days unless there
is a--
(i) Beneficiary elected transfer; or
(ii) Discharge with goals met and/or no expectation of a return to
home health care.
(2) Content and basis of recertification. The recertification
statement must indicate the continuing need for services and estimate
how much longer the services will be required. Need for occupational
therapy may be the basis for continuing services that were initiated
because the individual needed skilled nursing care or physical therapy
or speech therapy. If a patient's underlying condition or complication
requires a registered nurse to ensure that essential non-skilled care
is achieving its purpose, and necessitates a registered nurse be
involved in the development, management, and evaluation of a patient's
care plan, the physician will include a brief narrative describing the
clinical justification of this need. If the narrative is part of the
recertification form, then the narrative must be located immediately
prior to the physician's signature. If the narrative exists as an
addendum to the recertification form, in addition to the physician's
signature on the recertification form, the physician must sign
immediately following the narrative in the addendum.
(c) Determining patient eligibility for Medicare home health
services. Documentation in the certifying physician's medical records
and/or the acute/post-acute care facility's medical records (if the
patient was directly admitted to home health) shall be used as the
basis for certification of home health eligibility. This documentation
shall be provided upon request to the home health agency, review
entities, and/or CMS. Criteria for patient eligibility are described in
paragraphs (a)(1) and (b) of this section. If the documentation used as
the basis for the certification of eligibility is not sufficient to
demonstrate that the patient is or was eligible to receive services
under the Medicare home health benefit, payment will not be rendered
for home health services provided.
* * * * *

[[Page 66118]]

PART 484--HOME HEALTH SERVICES

0
5. The authority citation for part 484 continues to read as follows:

Authority: Secs 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395(hh)) unless otherwise indicated.

0
6. Section 484.4 is amended by revising the definition of ``Speech-
language pathologist'' to read as follows:

Sec. 484.4 Personnel qualifications.

* * * * *
Speech-language pathologist. A person who has a master's or
doctoral degree in speech-language pathology, and who meets either of
the following requirements:
(a) Is licensed as a speech-language pathologist by the State in
which the individual furnishes such services; or
(b) In the case of an individual who furnishes services in a State
which does not license speech-language pathologists:
(1) Has successfully completed 350 clock hours of supervised
clinical practicum (or is in the process of accumulating such
supervised clinical experience);
(2) Performed not less than 9 months of supervised full-time
speech-language pathology services after obtaining a master's or
doctoral degree in speech-language pathology or a related field; and
(3) Successfully completed a national examination in speech-
language pathology approved by the Secretary.

0
7. Section 484.250 is amended by revising paragraph (a)(1) to read as
follows:

Sec. 484.250 Patient assessment data.

(a) * * *
(1) The OASIS data described at Sec. 484.55(b)(1) and (d)(1) for
CMS to administer the payment rate methodologies described in
Sec. Sec. 484.215, 484.230, and 484.235, and to meet the quality
reporting requirements of section 1895(b)(3)(B)(v) of the Act.
* * * * *

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
8. The authority citation for part 488 continues to read as follows:

Authority: Secs. 1102, 1128I and 1871 of the Social Security
Act, unless otherwise noted (42 U.S.C. 1302, 1320a-7j, and 1395hh);
Pub. L. 110-149, 121 Stat. 1819.

0
9. Section 488.845 is amended by adding paragraph (h) to read as
follows:

Sec. 488.845 Civil money penalties.

* * * * *
(h) Review of the penalty. When an administrative law judge or
state hearing officer (or higher administrative review authority) finds
that the basis for imposing a civil monetary penalty exists, as
specified in this part, the administrative law judge, State hearing
officer (or higher administrative review authority) may not--
(1) Set a penalty of zero or reduce a penalty to zero;
(2) Review the exercise of discretion by CMS to impose a civil
monetary penalty; and
(3) Consider any factors in reviewing the amount of the penalty
other than those specified in paragraph (b) of this section.

PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT
PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT
AFFECT THE PARTCIPATION OF ICFS/IID AND CERTAIN NFS IN THE MEDICAID
PROGRAM

0
10. The authority citation for part 498 continues to read as follows:

Authority: Secs. 1102, 1128I and 1871 of the Social Security
Act (42 U.S.C. 1302, 1320a-7j, and 1395hh).

0
11. Section 498.3 is amended by revising paragraphs (b)(13) and (14)(i)
to read as follows:

Sec. 498.3 Scope and applicability.

* * * * *
(b) * * *
(13) Except as provided at paragraph (d)(12) of this section for
SNFs, NFs, and HHAs, the finding of noncompliance leading to the
imposition of enforcement actions specified in Sec. 488.406 or 488.820
of this chapter, but not the determination as to which sanction was
imposed. The scope of review on the imposition if a civil money penalty
is specified in Sec. Sec. 488.438(e) and 488.845(h) of this chapter.
(14) * * *
(i) The range of civil money penalty amounts that CMS could collect
(for SNFs or NFs, the scope of review during a hearing on the
imposition of a civil money penalty is set forth in Sec. 488.438(e) of
this chapter and for HHAs, the scope of review during a hearing on the
imposition of a civil money penalty is set forth in Sec. 488.845(h) of
this chapter); or
* * * * *

0
12. Section 498.60 is amended by revising paragraphs (c)(1) and (2) to
read as follows:

Sec. 498.60 Conduct of hearing.

* * * * *
(c) * * *
(1) The scope of review is as specified in Sec. Sec. 488.438(e)
and 488.845(h) of this chapter; and
(2) CMS' determination as to the level of noncompliance of a SNF,
NF, or HHA must be upheld unless it is clearly erroneous.

Dated: October 22, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.

Approved: October 28, 2014.

Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2014-26057 Filed 10-30-14; 4:15 pm]
BILLING CODE 4120-01-P

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