Medicare Program; FY 2021 Hospice Wage Index and Payment Rate Update, 20949-20967 [2020-07959]
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Federal Register / Vol. 85, No. 73 / Wednesday, April 15, 2020 / Proposed Rules
PART 409—HOSPITAL INSURANCE
BENEFITS
1. The authority citation for part 409
continues to read as follows:
■
Authority: 42 U.S.C. 1302 and 1395hh.
2. Section 409.35 is amended by
revising paragraph (a) to read as follows:
■
§ 409.35
Criteria for ‘‘practical matter’’.
(a) General considerations. In making
a ‘‘practical matter’’ determination, as
required by § 409.31(b)(3), consideration
must be given to the patient’s condition
and to the availability and feasibility of
using more economical alternative
facilities and services. However, in
making that determination, the
availability of Medicare payment for
those services may not be a factor. For
example, if a beneficiary can obtain
daily physical therapy services on an
outpatient basis, the unavailability of
Medicare payment for those alternative
services due to the beneficiary’s nonenrollment in Part B may not be a basis
for finding that the needed care can only
be provided in a SNF.
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PART 413—PRINCIPLES OF
REASONABLE COST
REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE
SERVICES; PROSPECTIVELY
DETERMINED PAYMENT RATES FOR
SKILLED NURSING FACILITIES;
PAYMENT FOR ACUTE KIDNEY
INJURY DIALYSIS
3. The authority citation for part 413
continues to read as follows:
■
Authority: 42 U.S.C. 1302, 1395d(d),
1395f(b), 1395g, 1395l(a), (i), and (n),
1395x(v), 1395hh, 1395rr, 1395tt, and
1395ww.
§ 413.114
[Amended]
4. Section 413.114 is amended in
paragraph (c)(2) by removing the
reference ‘‘§ 413.55(a)(1)’’ and adding in
its place the reference ‘‘§ 413.53(a)(1)’’.
■ 5. Section 413.338 is amended by
revising paragraphs (a)(9) and (11) and
(e)(1) and (3) to read as follows:
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§ 413.338 Skilled nursing facility valuebased purchasing program.
(a) * * *
(9) Performance standards are the
levels of performance that SNFs must
meet or exceed to earn points under the
SNF VBP Program for a fiscal year, and
are announced no later than 60 days
prior to the start of the performance
period that applies to the SNF
readmission measure for that fiscal year.
Beginning with the performance
standards that apply to FY 2021, if CMS
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discovers an error in the performance
standard calculations subsequent to
publishing their numerical values for a
fiscal year, CMS will update the
numerical values to correct the error. If
CMS subsequently discovers one or
more other errors with respect to the
same fiscal year, CMS will not further
update the numerical values for that
fiscal year.
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(11) SNF readmission measure means,
prior to October 1, 2019, the all-cause
all-condition hospital readmission
measure (SNFRM) or the all-condition
risk-adjusted potentially preventable
hospital readmission rate (SNFPPR)
specified by CMS for application in the
SNF Value-Based Purchasing Program.
Beginning October 1, 2019, the term
SNF readmission measure means the
all-cause all-condition hospital
readmission measure (SNFRM) or the
all-condition risk-adjusted potentially
preventable hospital readmission rate
(Skilled Nursing Facility Potentially
Preventable Readmissions after Hospital
Discharge measure) specified by CMS
for application in the SNF Value-Based
Purchasing Program.
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(e) * * *
(1) Beginning October 1, 2016, CMS
will provide quarterly confidential
feedback reports to SNFs on their
performance on the SNF readmission
measure. SNFs will have the
opportunity to review and submit
corrections for these data by March 31st
following the date that CMS provides
the reports, for reports issued prior to
October 1, 2019. Beginning with the
performance period quality measure
quarterly report issued on or after
October 1, 2019 that contains the
performance period measure rate and all
of the underlying claim information
used to calculate the measure rate that
applies for the fiscal year, SNFs will
have 30 days following the date that
CMS provides these reports to review
and submit corrections for the data
contained in these reports. Beginning
with the baseline period quality
measure quarterly report issued on or
after October 1, 2020 that contains the
baseline period measure rate and all of
the underlying claim information used
to calculate the measure rate that
applies for the fiscal year, SNFs will
have 30 days following the date that
CMS provides these reports to review
and submit corrections for the data
contained in these reports. Any such
correction requests must be
accompanied by appropriate evidence
showing the basis for the correction.
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20949
(3) CMS will publicly report the
information described in paragraphs
(e)(1) and (2) of this section on the
Nursing Home Compare website or a
successor website. Beginning with
information publicly reported on or
after October 1, 2019, the following
exceptions apply:
(i) If CMS determines that a SNF has
fewer than 25 eligible stays during the
baseline period for a fiscal year but has
25 or more eligible stays during the
performance period for that fiscal year,
CMS will not publicly report the SNF’s
baseline period SNF readmission
measure rate and improvement score for
that fiscal year;
(ii) If CMS determines that a SNF is
a low-volume SNF with respect to a
fiscal year and assigns a performance
score to the SNF under paragraph (d)(3)
of this section, CMS will not publicly
report the SNF’s performance period
SNF readmission measure rate,
achievement score or improvement
score for the fiscal year; and
(iii) If CMS determines that a SNF has
zero eligible cases during the
performance period with respect to a
fiscal year, CMS will not publicly report
any information for that SNF for that
fiscal year.
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Dated: March 24, 2020.
Seema Verma
Administrator, Centers for Medicare &
Medicaid Services.
Dated: April 9, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2020–07875 Filed 4–10–20; 4:15 pm]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 418
[CMS–1733–P]
RIN 0938–AU09
Medicare Program; FY 2021 Hospice
Wage Index and Payment Rate Update
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
update the hospice wage index,
payment rates, and cap amount for fiscal
year (FY) 2021. This rule also proposes
changes to the hospice wage index by
adopting the most recent Office of
SUMMARY:
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Management and Budget statistical area
delineations, with a 5 percent cap on
wage index decreases. Finally, this
proposed rule summarizes the changes
to the hospice election statement
finalized in the FY 2020 Hospice Wage
Index and Rate Update final rule and
effective for October 1, 2020; and
provides hospices with a model election
statement and sample addendum.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on June 9, 2020.
ADDRESSES: In commenting, refer to file
code CMS–1733–P.
Comments, including mass comment
submissions, must be submitted in one
of the following three ways (choose only
one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to https://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–1733–P, P.O. Box 8010, Baltimore,
MD 21244–1850.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–1733–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: For
general questions about hospice
payment policy, send your inquiry via
email to: hospicepolicy@cms.hhs.gov.
SUPPLEMENTARY INFORMATION: Inspection
of Public Comments: All comments
received before the close of the
comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following
website as soon as possible after they
have been received: https://
www.regulations.gov. Follow the search
instructions on that website to view
public comments.
Wage index addenda will be available
only through the internet on our website
at: (https://www.cms.gov/Medicare/
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Medicare-Fee-for-Service-Payment/
Hospice/Hospice-Wage-Index.html.)
I. Executive Summary
A. Purpose
This rule proposes updates to the
hospice wage index, payment rates, and
cap amount for fiscal year (FY) 2021, as
required under section 1814(i) of the
Social Security Act (the Act). In
addition, this rule proposes to adopt the
most recent Office of Management and
Budget (OMB) statistical area
delineations and apply a 5 percent cap
on wage index decreases; and proposes
to sunset the Service Intensity Add-on
(SIA) budget neutrality factor.
B. Summary of the Major Provisions
Section III.A.1 of this rule proposes to
adopt the OMB statistical area
delineations outlined in a September 14,
2018, OMB bulletin. Section III.A.2
proposes to apply a 5 percent cap on
wage index decreases. Section III.B.1
proposes updates to the hospice wage
index and makes the application of the
updated wage data budget neutral for all
four levels of hospice care. In section
III.B.2 of this proposed rule we discuss
the proposed FY 2021 hospice payment
update percentage of 2.6 percent.
Section III.B.3 of this proposed rule
proposes to sunset the service intensity
add-on budget neutrality factor (SBNF)
and update the hospice payment rates.
Section III.B.4 proposes the hospice cap
amount for FY 2021 by the hospice
payment update percentage discussed in
section III.B.2 of this rule. Finally,
section III.C discusses the modifications
to the hospice election statement and
the election statement addendum that
were finalized in the FY 2020 Hospice
final rule (84 FR 38484) and solicits
comments on model examples of the
modified election statement and the
addendum.
C. Summary of Impacts
The overall economic impact of this
proposed rule is estimated to be $580
million in increased payments to
hospices for FY 2021.
II. Background
A. Hospice Care
Hospice care is a comprehensive,
holistic approach to treatment that
recognizes the impending death of a
terminally ill individual and warrants a
change in the focus from curative care
to palliative care for relief of pain and
for symptom management. Medicare
regulations define ‘‘palliative care’’ as
patient and family-centered care that
optimizes quality of life by anticipating,
preventing, and treating suffering.
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Palliative care throughout the
continuum of illness involves
addressing physical, intellectual,
emotional, social, and spiritual needs
and to facilitate patient autonomy,
access to information, and choice (42
CFR 418.3). Palliative care is at the core
of hospice philosophy and care
practices, and is a critical component of
the Medicare hospice benefit.
The goal of hospice care is to help
terminally ill individuals continue life
with minimal disruption to normal
activities while remaining primarily in
the home environment. A hospice uses
an interdisciplinary approach to deliver
medical, nursing, social, psychological,
emotional, and spiritual services
through a collaboration of professionals
and other caregivers, with the goal of
making the beneficiary as physically
and emotionally comfortable as
possible. Hospice is compassionate
beneficiary and family/caregivercentered care for those who are
terminally ill.
As referenced in our regulations at
§ 418.22(b)(1), to be eligible for
Medicare hospice services, the patient’s
attending physician (if any) and the
hospice medical director must certify
that the individual is ‘‘terminally ill,’’ as
defined in section 1861(dd)(3)(A) of the
Act and our regulations at § 418.3; that
is, the individual’s prognosis is for a life
expectancy of 6 months or less if the
terminal illness runs its normal course.
The regulations at § 418.22(b)(3) require
that the certification and recertification
forms include a brief narrative
explanation of the clinical findings that
support a life expectancy of 6 months or
less.
Under the Medicare hospice benefit,
the election of hospice care is a patient
choice and once a terminally ill patient
elects to receive hospice care, a hospice
interdisciplinary group is essential in
the seamless provision of services.
These hospice services are provided
primarily in the individual’s home. The
hospice interdisciplinary group works
with the beneficiary, family, and
caregivers to develop a coordinated,
comprehensive care plan; reduce
unnecessary diagnostics or ineffective
therapies; and maintain ongoing
communication with individuals and
their families about changes in their
condition. The beneficiary’s care plan
will shift over time to meet the changing
needs of the individual, family, and
caregiver(s) as the individual
approaches the end of life.
If, in the judgment of the hospice
interdisciplinary team, which includes
the hospice physician, the patient’s
symptoms cannot be effectively
managed at home, then the patient is
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eligible for GIP, a more medically
intense level of care. GIP must be
provided in a Medicare-certified
hospice freestanding facility, skilled
nursing facility, or hospital. GIP is
provided to ensure that any new or
worsening symptoms are intensively
addressed so that the beneficiary can
return to his or her home and continue
to receive routine home care. Limited,
short-term, intermittent, IRC is also
available because of the absence or need
for relief of the family or other
caregivers. Additionally, an individual
can receive CHC during a period of
crisis in which an individual requires
continuous care to achieve palliation or
management of acute medical symptoms
so that the individual can remain at
home. Continuous home care may be
covered for as much as 24 hours a day,
and these periods must be
predominantly nursing care, in
accordance with our regulations at
§ 418.204. A minimum of 8 hours of
nursing care, or nursing and aide care,
must be furnished on a particular day to
qualify for the continuous home care
rate (§ 418.302(e)(4)).
Hospices must comply with
applicable civil rights laws,1 including
section 504 of the Rehabilitation Act of
1973 and the Americans with
Disabilities Act, under which covered
entities must take appropriate steps to
ensure effective communication with
patients and patient care representatives
with disabilities, including the
provisions of auxiliary aids and
services. Additionally, they must take
reasonable steps to ensure meaningful
access for individuals with limited
English proficiency, consistent with
Title VI of the Civil Rights Act of 1964.
Further information about these
requirements may be found at: https://
www.hhs.gov/ocr/civilrights.
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B. Services Covered by the Medicare
Hospice Benefit
Coverage under the Medicare Hospice
benefit requires that hospice services
must be reasonable and necessary for
the palliation and management of the
terminal illness and related conditions.
Section 1861(dd)(1) of the Act
establishes the services that are to be
rendered by a Medicare-certified
hospice program. These covered
services include: Nursing care; physical
therapy; occupational therapy; speechlanguage pathology therapy; medical
social services; home health aide
services (here called hospice aide
1 Hospices are also subject to additional Federal
civil rights laws, including the Age Discrimination
Act, Section 1557 of the Affordable Care Act, and
conscience and religious freedom laws.
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services); physician services;
homemaker services; medical supplies
(including drugs and biologicals);
medical appliances; counseling services
(including dietary counseling); shortterm inpatient care in a hospital,
nursing facility, or hospice inpatient
facility (including both respite care and
procedures necessary for pain control
and acute or chronic symptom
management); continuous home care
during periods of crisis, and only as
necessary to maintain the terminally ill
individual at home; and any other item
or service which is specified in the plan
of care and for which payment may
otherwise be made under Medicare, in
accordance with Title XVIII of the Act.
Section 1814(a)(7)(B) of the Act
requires that a written plan for
providing hospice care to a beneficiary
who is a hospice patient be established
before care is provided by, or under
arrangements made by, that hospice
program; and that the written plan be
periodically reviewed by the
beneficiary’s attending physician (if
any), the hospice medical director, and
an interdisciplinary group (described in
section 1861(dd)(2)(B) of the Act). The
services offered under the Medicare
hospice benefit must be available to
beneficiaries as needed, 24 hours a day,
7 days a week (section 1861(dd)(2)(A)(i)
of the Act).
Upon the implementation of the
hospice benefit, the Congress also
expected hospices to continue to use
volunteer services, though these
services are not reimbursed by Medicare
(see section 1861(dd)(2)(E) of the Act).
As stated in the FY 1983 Hospice Wage
Index and Rate Update proposed rule
(48 FR 38149), the hospice
interdisciplinary group should comprise
paid hospice employees as well as
hospice volunteers, and that ‘‘the
hospice benefit and the resulting
Medicare reimbursement is not
intended to diminish the voluntary
spirit of hospices.’’ This expectation
supports the hospice philosophy of
community based, holistic,
comprehensive, and compassionate end
of life care.
C. Medicare Payment for Hospice Care
Sections 1812(d), 1813(a)(4),
1814(a)(7), 1814(i), and 1861(dd) of the
Act, and our regulations in 42 CFR part
418, establish eligibility requirements,
payment standards and procedures;
define covered services; and delineate
the conditions a hospice must meet to
be approved for participation in the
Medicare program. Part 418, subpart G,
provides for a per diem payment in one
of four prospectively-determined rate
categories of hospice care (RHC, CHC,
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IRC, and GIP), based on each day a
qualified Medicare beneficiary is under
hospice care (once the individual has
elected). This per diem payment is to
include all of the hospice services and
items needed to manage the
beneficiary’s care, as required by section
1861(dd)(1) of the Act.
While payment is made to hospices is
to cover all items, services, and drugs
for the palliation and management of
the terminal illness and related
conditions, federal funds cannot be used
for the prohibited activities, even in the
context of a per diem payment. Recent
news reports 2 have brought to light the
potential role hospices could play in
medical aid in dying (MAID) where
such practices have been legalized in
certain states. We wish to remind
hospices that The Assisted Suicide
Funding Restriction Act of 1997
(ASFRA) (Pub. L. 105–12) prohibits the
use of federal funds to provide or pay
for any health care item or service or
health benefit coverage for the purpose
of causing, or assisting to cause, the
death of any individual including mercy
killing, euthanasia, or assisted suicide.
However, pursuant to section 3(b)(4) of
ASFRA, the prohibition does not apply
to the provision of an item or service for
the purpose of alleviating pain or
discomfort, even if such use may
increase the risk of death, so long as the
item or service is not furnished for the
specific purpose of causing or
accelerating death.
1. Omnibus Budget Reconciliation Act
of 1989
Section 6005(a) of the Omnibus
Budget Reconciliation Act of 1989 (Pub.
L. 101–239) amended section
1814(i)(1)(C) of the Act and provided
changes in the methodology concerning
updating the daily payment rates based
on the hospital market basket
percentage increase applied to the
payment rates in effect during the
previous federal FY.
2. Balanced Budget Act of 1997
Section 4441(a) of the Balanced
Budget Act of 1997 (BBA) (Pub. L. 105–
33) established that updates to the
hospice payment rates beginning FY
2002 and subsequent FYs be the
hospital market basket percentage
increase for the FY.
3. FY 1998 Hospice Wage Index Final
Rule
The FY 1998 Hospice Wage Index
final rule (62 FR 42860), implemented a
2 Nelson, R., Should Medical Aid in Dying Be Part
of Hospice Care? Medscape Nurses. February 26,
2020. https://www.medscape.com/viewarticle/
925769#vp_1.
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new methodology for calculating the
hospice wage index and instituted an
annual Budget Neutrality Adjustment
Factor (BNAF) so aggregate Medicare
payments to hospices would remain
budget neutral to payments calculated
using the 1983 wage index.
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4. FY 2010 Hospice Wage Index Final
Rule
The FY 2010 Hospice Wage Index and
Rate Update final rule (74 FR 39384)
instituted an incremental 7-year phaseout of the BNAF beginning in FY 2010
through FY 2016. The BNAF phase-out
reduced the amount of the BNAF
increase applied to the hospice wage
index value, but was not a reduction in
the hospice wage index value itself or in
the hospice payment rates.
5. The Affordable Care Act
Starting with FY 2013 (and in
subsequent FYs), the market basket
percentage update under the hospice
payment system referenced in sections
1814(i)(1)(C)(ii)(VII) and
1814(i)(1)(C)(iii) of the Act is subject to
annual reductions related to changes in
economy-wide productivity, as
specified in section 1814(i)(1)(C)(iv) of
the Act.
In addition, sections 1814(i)(5)(A)
through (C) of the Act, as added by
section 3132(a) of the Patient Protection
and Affordable Care Act (PPACA) (Pub.
L. 111–148), required hospices to begin
submitting quality data, based on
measures specified by the Secretary of
the Department of Health and Human
Services (the Secretary), for FY 2014
and subsequent FYs. Beginning in FY
2014, hospices that fail to report quality
data have their market basket percentage
increase reduced by 2 percentage points.
Section 1814(a)(7)(D)(i) of the Act, as
added by section 3132(b)(2) of the
PPACA, required, effective January 1,
2011, that a hospice physician or nurse
practitioner have a face-to-face
encounter with the beneficiary to
determine continued eligibility of the
beneficiary’s hospice care prior to the
180th day recertification and each
subsequent recertification, and to attest
that such visit took place. When
implementing this provision, we
finalized in the FY 2011 Hospice Wage
Index final rule (75 FR 70435) that the
180th day recertification and
subsequent recertifications would
correspond to the beneficiary’s third or
subsequent benefit periods. Further,
section 1814(i)(6) of the Act, as added
by section 3132(a)(1)(B) of the PPACA,
authorized the Secretary to collect
additional data and information
determined appropriate to revise
payments for hospice care and other
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purposes. The types of data and
information suggested in the PPACA
could capture accurate resource
utilization, which could be collected on
claims, cost reports, and possibly other
mechanisms, as the Secretary
determined to be appropriate. The data
collected could be used to revise the
methodology for determining the
payment rates for RHC and other
services included in hospice care, no
earlier than October 1, 2013, as
described in section 1814(i)(6)(D) of the
Act. In addition, we were required to
consult with hospice programs and the
Medicare Payment Advisory
Commission (MedPAC) regarding
additional data collection and payment
revision options.
6. FY 2012 Hospice Wage Index Final
Rule
In the FY 2012 Hospice Wage Index
final rule (76 FR 47308 through 47314)
we announced that beginning in 2012,
the hospice aggregate cap would be
calculated using the patient-by-patient
proportional methodology, within
certain limits. We allowed existing
hospices the option of having their cap
calculated through the original
streamlined methodology, also within
certain limits. As of FY 2012, new
hospices have their cap determinations
calculated using the patient-by-patient
proportional methodology. If a hospice’s
total Medicare payments for the cap
year exceed the hospice aggregate cap,
then the hospice must repay the excess
back to Medicare.
7. IMPACT Act of 2014
The Improving Medicare Post-Acute
Care Transformation Act of 2014
(IMPACT Act) (Pub. L. 113–185) became
law on October 6, 2014. Section 3(a) of
the IMPACT Act mandated that all
Medicare certified hospices be surveyed
every 3 years beginning April 6, 2015
and ending September 30, 2025. In
addition, section 3(c) of the IMPACT
Act requires medical review of hospice
cases involving beneficiaries receiving
more than 180 days of care in select
hospices that show a preponderance of
such patients; section 3(d) of the
IMPACT Act contains a new provision
mandating that the cap amount for
accounting years that end after
September 30, 2016, and before October
1, 2025 be updated by the hospice
payment update rather than using the
consumer price index for urban
consumers (CPI–U) for medical care
expenditures.
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8. FY 2015 Hospice Wage Index and
Payment Rate Update Final Rule
The FY 2015 Hospice Wage Index and
Rate Update final rule (79 FR 50452)
finalized a requirement that the Notice
of Election (NOE) be filed within 5
calendar days after the effective date of
hospice election. If the NOE is filed
beyond this 5-day period, hospice
providers are liable for the services
furnished during the days from the
effective date of hospice election to the
date of NOE filing (79 FR 50474).
Similar to the NOE, the claims
processing system must be notified of a
beneficiary’s discharge from hospice or
hospice benefit revocation within 5
calendar days after the effective date of
the discharge/revocation (unless the
hospice has already filed a final claim)
through the submission of a final claim
or a Notice of Termination or
Revocation (NOTR).
The FY 2015 Hospice Wage Index and
Rate Update final rule (79 FR 50479)
also finalized a requirement that the
election form include the beneficiary’s
choice of attending physician and that
the beneficiary provide the hospice with
a signed document when he or she
chooses to change attending physicians.
In addition, the FY 2015 Hospice
Wage Index and Rate Update final rule
(79 FR 50496) provided background,
eligibility criteria, survey respondents,
and implementation of the Hospice
Experience of Care Survey for informal
caregivers. Hospice providers were
required to begin using this survey for
hospice patients as of 2015.
Finally, the FY 2015 Hospice Wage
Index and Rate Update final rule
required providers to complete their
aggregate cap determination not sooner
than 3 months after the end of the cap
year, and not later than 5 months after,
and remit any overpayments. Those
hospices that fail to submit their
aggregate cap determinations on a
timely basis will have their payments
suspended until the determination is
completed and received by the Medicare
contractor (79 FR 50503).
9. FY 2016 Hospice Wage Index and
Payment Rate Update Final Rule
In the FY 2016 Hospice Wage Index
and Rate Update final rule (80 FR
47172), we created two different
payment rates for RHC that resulted in
a higher base payment rate for the first
60 days of hospice care and a reduced
base payment rate for subsequent days
of hospice care. We also created a SIA
payment payable for services during the
last 7 days of the beneficiary’s life, equal
to the CHC hourly payment rate
multiplied by the amount of direct
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patient care provided by a registered
nurse (RN) or social worker that occurs
during the last 7 days (80 FR 47177).
In addition to the hospice payment
reform changes discussed, the FY 2016
Hospice Wage Index and Rate Update
final rule (80 FR 47186) implemented
changes mandated by the IMPACT Act,
in which the cap amount for accounting
years that end after September 30, 2016
and before October 1, 2025 would be
updated by the hospice payment update
percentage rather than using the CPI–U.
This was applied to the 2016 cap year,
starting on November 1, 2015 and
ending on October 31, 2016. In addition,
we finalized a provision to align the cap
accounting year for both the inpatient
cap and the hospice aggregate cap with
the fiscal year for FY 2017 and
thereafter. Finally, the FY 2016 Hospice
Wage Index and Rate Update final rule
(80 FR 47144) clarified that hospices
would have to report all diagnoses of
the beneficiary on the hospice claim as
a part of the ongoing data collection
efforts for possible future hospice
payment refinements.
10. FY 2017 Hospice Wage Index and
Payment Rate Update Final Rule
In the FY 2017 Hospice Wage Index
and Rate Update final rule (81 FR
52160), we finalized several new
policies and requirements related to the
HQRP. First, we codified our policy that
if the National Quality Forum (NQF)
made non-substantive changes to
specifications for HQRP measures as
part of the NQF’s re-endorsement
process, we would continue to utilize
the measure in its new endorsed status,
without going through new notice-andcomment rulemaking. We would
continue to use rulemaking to adopt
substantive updates made by the NQF to
the endorsed measures we have adopted
for the HQRP; determinations about
what constitutes a substantive versus
non-substantive change would be made
on a measure-by-measure basis. Second,
we finalized two new quality measures
for the HQRP for the FY 2019 payment
determination and subsequent years:
Hospice Visits when Death is Imminent
Measure Pair and Hospice and Palliative
Care Composite Process MeasureComprehensive Assessment at
Admission (81 FR 52173). The data
collection mechanism for both of these
measures is the HIS, and the measures
were effective April 1, 2017. Regarding
the CAHPS® Hospice Survey, we
finalized a policy that hospices that
receive their CMS Certification Number
(CCN) after January 1, 2017 for the FY
2019 Annual Payment Update (APU)
and January 1, 2018 for the FY 2020
APU will be exempted from the Hospice
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Consumer Assessment of Healthcare
Providers and Systems (CAHPS®)
requirements due to newness (81 FR
52182). The exemption is determined by
CMS and is for 1 year only.
11. FY 2020 Hospice Wage Index and
Payment Rate Update Final Rule
In the FY 2020 Hospice Wage Index
and Rate Update final rule (84 FR
38487), we rebased the payment rates
for CHC and GIP and set those rates
equal to their average estimated FY 2019
costs per day. We also rebased IRC per
diem rates equal to the estimated FY
2019 average costs per day, with a
reduction of 5 percent to the FY 2019
average cost per day to account for
coinsurance. We finalized the FY 2020
proposal to reduce the RHC payment
rates by 2.72 percent to offset the
increases to CHC, IRC, and GIP payment
rates to implement this policy in a
budget-neutral manner in accordance
with section 1814(i)(6) of the Act (84 FR
38496). We also finalized a policy to use
the current year’s pre-floor, prereclassified hospital inpatient wage
index as the wage adjustment to the
labor portion of the hospice rates.
Finally, in the FY 2020 Hospice Wage
Index and Rate Update final rule (84 FR
38505) we finalized modifications to the
hospice election statement content
requirements at § 418.24(b) by requiring
hospices, upon request, to furnish an
election statement addendum effective
beginning in FY 2021. The addendum
must list those items, services, and
drugs the hospice has determined to be
unrelated to the terminal illness and
related conditions, increasing coverage
transparency for beneficiaries under a
hospice election.
III. Provisions of the Proposed Rule
A. Proposed Hospice Wage Index
Changes
1. Proposed Implementation of New
Labor Market Delineations
Generally, OMB issues major
revisions to statistical areas every 10
years, based on the results of the
decennial census. However, OMB
occasionally issues minor updates and
revisions to statistical areas in the years
between the decennial censuses. On
April 10, 2018, OMB issued OMB
Bulletin No. 18–03 which superseded
the August 15, 2017 OMB Bulletin No.
17–01. On September 14, 2018, OMB
issued OMB Bulletin No. 18–04, which
superseded the April 10, 2018 OMB
Bulletin No. 18–03. These bulletins
established revisions to the delineations
of Metropolitan Statistical Areas (MSA),
Micropolitan Statistical Areas, and
Combines Statistical Areas, and
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20953
guidance on uses of the delineation in
these areas. A copy of the September 14,
2018 bulletin is available online at:
https://www.whitehouse.gov/wpcontent/uploads/2018/09/Bulletin-1804.pdf. (We note, on March 6, 2020
OMB issued Bulletin 20–01 (available
on the web at https://
www.whitehouse.gov/wp-content/
uploads/2020/03/Bulletin-20-01.pdf),
and as discussed below was not issued
in time for development of this
proposed rule.) This bulletin states 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 September 14, 2018, are not as
sweeping as the changes made when we
adopted the CBSA geographic
designations for FY 2006, the September
14, 2018 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. We
believe it is important for the hospice
wage index to use the latest OMB
delineations available in order to
maintain a more accurate and up-to-date
payment system that reflects the reality
of population shifts and labor market
conditions. We further believe that
using the most current OMB
delineations would increase the
integrity of the hospice wage index by
creating a more accurate representation
of geographic variation in wage levels.
We are proposing to implement the new
OMB delineations as described in the
September 14, 2018 OMB Bulletin No.
18–04 for the hospice wage index
effective beginning in FY 2021. As
noted above, the March 6, 2020 OMB
Bulletin 20–01 was not issued in time
for development of this proposed rule.
While we do not believe that the minor
updates included in OMB Bulletin 20–
01 would impact our proposed updates
to the CBSA-based labor market area
delineations, if needed we would
include any updates from this bulletin
in any changes that would be adopted
in the FY 2021 hospice final rule.
i. Micropolitan Statistical Areas
As discussed in the FY 2006 Hospice
Wage Index proposed rule (70 FR
22397) and final rule (70 FR 45132),
CMS considered how to use the
Micropolitan Statistical Area definitions
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in the calculation of the wage index.
OMB defines a ‘‘Micropolitan Statistical
Area’’ as a ‘‘CBSA’’ associated with at
least one urban cluster that has a
population of at least 10,000, but less
than 50,000 (75 FR 37252). We refer to
these as Micropolitan Areas. After
extensive impact analysis, consistent
with the treatment of these areas under
the IPPS as discussed in the FY 2005
IPPS final rule (69 FR 49029 through
49032), CMS determined the best course
of action would be to treat Micropolitan
Areas as ‘‘rural’’ and include them in
the calculation of each state’s Hospice
rural wage index (see 70 FR 22397 and
70 FR 45132). Thus, the hospice
statewide rural wage index is
determined using IPPS hospital data
from hospitals located in nonMetropolitan Statistical Areas (MSA).
Based upon the 2010 Decennial
Census data, a number of urban counties
have switched status and have joined or
became Micropolitan Areas, and some
counties that once were part of a
Micropolitan Area, have become urban.
Overall, there are fewer Micropolitan
Areas (542) under the new OMB
delineations based on the 2010 Census
than existed under the latest data from
the 2000 Census (581). We believe that
the best course of action would be to
continue the policy established in the
FY 2006 Hospice Wage Index final rule
and include Micropolitan Areas in each
state’s rural wage index. These areas
continue to be defined as having
relatively small urban cores
(populations of 10,000 to 49,999).
Therefore, in conjunction with our
proposal to implement the new OMB
labor market delineations beginning in
FY 2021 and consistent with the
treatment of Micropolitan Areas under
the IPPS, we are proposing to continue
to treat Micropolitan Areas as ‘‘rural’’
and to include Micropolitan Areas in
the calculation of each state’s rural wage
index.
ii. Urban Counties Becoming Rural
If we adopt the new OMB
delineations (based upon the 2010
decennial Census data), a total of 34
counties (and county equivalents) that
are currently considered urban would
be considered rural beginning in FY
2021. Table 1 below lists the 34 counties
that would change to rural status if we
finalize our proposal to implement the
new OMB delineations.
TABLE 1—COUNTIES THAT WOULD CHANGE TO RURAL STATUS
County name
State
BAKER ................................................................................
NEWTON ............................................................................
GOLDEN VALLEY ..............................................................
WALKER .............................................................................
SIOUX .................................................................................
FLOYD ................................................................................
DE WITT .............................................................................
FORD ..................................................................................
BUCKINGHAM ....................................................................
ARANSAS ...........................................................................
MC DONALD ......................................................................
LE FLORE ...........................................................................
WELLS ................................................................................
HOOD .................................................................................
SOMERVELL ......................................................................
HAMILTON ..........................................................................
BARRY ................................................................................
KALAWAO ..........................................................................
VAN BUREN .......................................................................
SCOTT ................................................................................
TRIMBLE .............................................................................
BENTON .............................................................................
SIBLEY ................................................................................
HICKMAN ............................................................................
GULF ...................................................................................
CUSTER .............................................................................
CAROLINE ..........................................................................
WEBSTER ..........................................................................
PLYMOUTH ........................................................................
UNION .................................................................................
PEND OREILLE ..................................................................
COLUMBIA .........................................................................
PULASKI .............................................................................
KINGMAN ...........................................................................
GA .....
TX .....
MT .....
AL .....
ND .....
VA .....
IL .......
IL .......
VA .....
TX .....
MO ....
OK .....
IN ......
TX .....
TX .....
NE .....
MI ......
HI ......
MI ......
IN ......
KY .....
MS ....
MN ....
TN .....
FL ......
SD .....
VA .....
LA .....
IA ......
SC .....
WA ....
WA ....
GA .....
KS .....
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iii. Rural Counties Becoming Urban
If we finalize our proposal to
implement the new OMB delineations
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CBSA
CBSA name
10500
13140
13740
13820
13900
13980
14010
16580
16820
18580
22220
22900
23060
23104
23104
24260
24340
27980
28020
31140
31140
32820
33460
34980
37460
39660
40060
43340
43580
43900
44060
47460
47580
48620
Albany, GA.
Beaumont-Port Arthur, TX.
Billings, MT.
Birmingham-Hoover, AL.
Bismarck, ND.
Blacksburg-Christiansburg-Radford, VA.
Bloomington, IL.
Champaign-Urbana, IL.
Charlottesville, VA.
Corpus Christi, TX.
Fayetteville-Springdale-Rogers, AR–MO.
Fort Smith, AR–OK.
Fort Wayne, IN.
Fort Worth-Arlington, TX.
Fort Worth-Arlington, TX.
Grand Island, NE.
Grand Rapids-Wyoming, MI.
Kahului-Wailuku-Lahaina, HI.
Kalamazoo-Portage, MI.
Louisville/Jefferson County, KY–IN.
Louisville/Jefferson County, KY–IN.
Memphis, TN–MS–AR.
Minneapolis—St. Paul—Bloomington, MN–WI.
Nashville-Davidson-Murfreesboro-Franklin, TN.
Panama City, FL.
Rapid City, SD.
Richmond, VA.
Shreveport-Bossier City, LA.
Sioux City, IA–NE–SD.
Spartanburg, SC.
Spokane-Spokane Valley, WA.
Walla Walla, WA.
Warner Robins, GA.
Wichita, KS.
(based upon the 2010 decennial Census
data), a total of 47 counties (and county
equivalents) that are currently
designated rural would be considered
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urban beginning in FY 2021. Table 2
below lists the 47 counties that would
change to urban status.
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TABLE 2—COUNTIES THAT WOULD CHANGE TO URBAN STATUS
County name
State
GREENE .............................................................................
WASHINGTON ...................................................................
FRANKLIN ..........................................................................
LEVY ...................................................................................
STEWART ...........................................................................
TALBOT ..............................................................................
POWER ...............................................................................
FULTON ..............................................................................
JOHNSON ...........................................................................
FRANKLIN ..........................................................................
PARKE ................................................................................
WARREN ............................................................................
BOONE ...............................................................................
JASPER ..............................................................................
GEARY ................................................................................
CARTER .............................................................................
ASSUMPTION ....................................................................
MOREHOUSE .....................................................................
FRANKLIN ..........................................................................
IONIA ..................................................................................
SHIAWASSEE ....................................................................
LAKE ...................................................................................
COVINGTON ......................................................................
HOLMES .............................................................................
STONE ................................................................................
COOPER .............................................................................
HOWARD ............................................................................
STILLWATER ......................................................................
ANSON ...............................................................................
CAMDEN .............................................................................
GRANVILLE ........................................................................
HARNETT ...........................................................................
OTTAWA .............................................................................
CLARENDON ......................................................................
GIBSON ..............................................................................
STEWART ...........................................................................
HARRISON .........................................................................
STERLING ..........................................................................
KING AND QUEEN .............................................................
MADISON ...........................................................................
SOUTHAMPTON ................................................................
FRANKLIN CITY .................................................................
JACKSON ...........................................................................
MORGAN ............................................................................
LINCOLN .............................................................................
ADJUNTAS .........................................................................
LAS MARIAS ......................................................................
AL .....
AL .....
AR .....
FL ......
GA .....
GA .....
ID ......
IL .......
IL .......
IN ......
IN ......
IN ......
IA ......
IA ......
KS .....
KY .....
LA .....
LA .....
MA ....
MI ......
MI ......
MN ....
MS ....
MS ....
MS ....
MO ....
MO ....
MT .....
NC .....
NC .....
NC .....
NC .....
OH ....
SC .....
TN .....
TN .....
TX .....
TX .....
VA .....
VA .....
VA .....
VA .....
WV ....
WV ....
WI .....
PR .....
PR .....
iv. Urban Counties Moving to a Different
Urban CBSA
In addition to rural counties becoming
urban and urban counties becoming
rural, several urban counties would shift
from one urban CBSA to another urban
CBSA under our proposal to adopt the
new OMB delineations. In other cases,
CBSA
CBSA name
46220
33660
22900
23540
17980
17980
38540
37900
16060
17140
45460
29200
11180
19780
31740
26580
12940
33740
44140
24340
29620
20260
25620
27140
25060
17860
17860
13740
16740
47260
20500
22180
45780
44940
27180
17300
30980
41660
40060
47894
47260
47260
16620
25180
48140
38660
32420
Tuscaloosa, AL.
Mobile, AL.
Fort Smith, AR–OK.
Gainesville, FL.
Columbus, GA–AL.
Columbus, GA–AL.
Pocatello, ID.
Peoria, IL.
Carbondale-Marion, IL.
Cincinnati, OH–KY–IN.
Terre Haute, IN.
Lafayette-West Lafayette, IN.
Ames, IA.
Des Moines-West Des Moines, IA.
Manhattan, KS.
Huntington-Ashland, WV–KY–OH.
Baton Rouge, LA.
Monroe, LA.
Springfield, MA.
Grand Rapids-Kentwood, MI.
Lansing-East Lansing, MI.
Duluth, MN–WI.
Hattiesburg, MS.
Jackson, MS.
Gulfport-Biloxi, MS.
Columbia, MO.
Columbia, MO.
Billings, MT.
Charlotte-Concord-Gastonia, NC–SC.
Virginia Beach-Norfolk-Newport News, VA–NC.
Durham-Chapel Hill, NC.
Fayetteville, NC.
Toledo, OH.
Sumter, SC.
Jackson, TN.
Clarksville, TN–KY.
Longview, TX.
San Angelo, TX.
Richmond, VA.
Washington-Arlington-Alexandria, DC–VA–MD–WV.
Virginia Beach-Norfolk-Newport News, VA–NC.
Virginia Beach-Norfolk-Newport News, VA–NC.
Charleston, WV.
Hagerstown-Martinsburg, MD–WV.
Wausau-Weston, WI.
Ponce, PR.
Mayagu¨ez, PR.
applying the new OMB delineations
would involve a change only in CBSA
name or number, while the CBSA
continues to encompass the same
constituent counties. For example,
CBSA 19380 (Dayton, OH) would
experience both a change to its number
and its name, and become CBSA 19430
(Dayton-Kettering, OH), while all of its
three constituent counties would remain
the same. In other cases, only the name
of the CBSA would be modified, and
none of the currently assigned counties
would be reassigned to a different urban
CBSA. Table 3 below lists CBSAs where
we are proposing to change either the
name or CBSA number only.
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TABLE 3—COUNTIES THAT WOULD CHANGE NAME OR CBSA NUMBER
Proposed
CBSA code
10540
11500
12060
12420
13460
13980
...........
...........
...........
...........
...........
...........
VerDate Sep<11>2014
Current CBSA
code
Proposed CBSA title
Albany-Lebanon, OR .....................................................
Anniston-Oxford, AL ......................................................
Atlanta-Sandy Springs-Alpharetta, GA ..........................
Austin-Round Rock-Georgetown, TX ............................
Bend, OR .......................................................................
Blacksburg-Christiansburg, VA .....................................
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10540
11500
12060
12420
13460
13980
Sfmt 4702
Current CBSA title
Albany, OR.
Anniston-Oxford-Jacksonville, AL.
Atlanta-Sandy Springs-Roswell, GA.
Austin-Round Rock, TX.
Bend-Redmond, OR.
Blacksburg-Christiansburg-Radford, VA.
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TABLE 3—COUNTIES THAT WOULD CHANGE NAME OR CBSA NUMBER—Continued
Proposed
CBSA code
14740
15380
19430
24340
24860
25060
25540
25940
28700
31860
33340
34940
35660
36084
36500
38060
39150
23224
44420
44700
45940
46700
47300
48140
48424
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
Current CBSA
code
Proposed CBSA title
Bremerton-Silverdale-Port Orchard, WA .......................
Buffalo-Cheektowaga, NY .............................................
Dayton-Kettering, OH ....................................................
Grand Rapids-Kentwood, MI .........................................
Greenville-Anderson, SC ...............................................
Gulfport-Biloxi, MS ........................................................
Hartford-East Hartford-Middletown, CT .........................
Hilton Head Island-Bluffton, SC ....................................
Kingsport-Bristol, TN–VA ..............................................
Mankato, MN .................................................................
Milwaukee-Waukesha, WI .............................................
Naples-Marco Island, FL ...............................................
Niles, MI ........................................................................
Oakland-Berkeley-Livermore, CA ..................................
Olympia-Lacey-Tumwater, WA .....................................
Phoenix-Mesa-Chandler, AZ .........................................
Prescott Valley-Prescott, AZ .........................................
Frederick-Gaithersburg-Rockville, MD ..........................
Staunton, VA .................................................................
Stockton, CA .................................................................
Trenton-Princeton, NJ ...................................................
Vallejo, CA .....................................................................
Visalia, CA .....................................................................
Wausau-Weston, WI .....................................................
West Palm Beach-Boca Raton-Boynton Beach, FL .....
We are not discussing these proposed
changes in this section because, in our
view, they are inconsequential changes
with respect to the hospice wage index.
However, in other cases, if we adopt the
new OMB delineations, counties would
shift between existing and new CBSAs,
14740
15380
19380
24340
24860
25060
25540
25940
28700
31860
33340
34940
35660
36084
36500
38060
39140
43524
44420
44700
45940
46700
47300
48140
48424
Current CBSA title
Bremerton-Silverdale, WA.
Buffalo-Cheektowaga-Niagara Falls, NY.
Dayton, OH.
Grand Rapids-Wyoming, MI.
Greenville-Anderson-Mauldin, SC.
Gulfport-Biloxi-Pascagoula, MS.
Hartford-West Hartford-East Hartford, CT.
Hilton Head Island-Bluffton-Beaufort, SC.
Kingsport-Bristol-Bristol, TN–VA.
Mankato-North Mankato, MN.
Milwaukee-Waukesha-West Allis, WI.
Naples-Immokalee-Marco Island, FL.
Niles-Benton Harbor, MI.
Oakland-Hayward-Berkeley, CA.
Olympia-Tumwater, WA.
Phoenix-Mesa-Scottsdale, AZ.
Prescott, AZ.
Silver Spring-Frederick-Rockville, MD.
Staunton-Waynesboro, VA.
Stockton-Lodi, CA.
Trenton, NJ.
Vallejo-Fairfield, CA.
Visalia-Porterville, CA.
Wausau, WI.
West Palm Beach-Boca Raton-Delray Beach, FL.
changing the constituent makeup of the
CBSAs. In another type of change, some
CBSAs have counties that would split
off to become part of or to form entirely
new labor market areas. Finally, in some
cases, a CBSA would lose counties to
another existing CBSA if we adopt the
new OMB delineations. Table 4 below
lists the urban counties that would
move from one urban CBSA to a newly
or modified CBSA if we adopt the new
OMB delineations.
TABLE 4—COUNTIES THAT WOULD CHANGE TO A DIFFERENT CBSA
Previous CBSA
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16974
16974
16974
16974
16974
16974
20524
20524
26580
28940
35084
35614
35614
35614
35614
38660
38660
38660
38660
New CBSA
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
...................................................
16984
16984
16984
20994
16984
16984
39100
35614
16620
34100
35154
35154
35154
35154
39100
49500
49500
49500
49500
2. Proposed Transition Period
As discussed above, overall, we
believe that our proposal to adopt the
revised OMB delineations for FY 2021
would result in hospice wage index
values being more representative of the
actual costs of labor in a given area.
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County
COOK ................................................................................................................
DU PAGE ...........................................................................................................
GRUNDY ...........................................................................................................
KENDALL ...........................................................................................................
MC HENRY ........................................................................................................
WILL ...................................................................................................................
DUTCHESS .......................................................................................................
PUTNAM ............................................................................................................
LINCOLN ...........................................................................................................
GRAINGER ........................................................................................................
SOMERSET .......................................................................................................
MIDDLESEX ......................................................................................................
MONMOUTH .....................................................................................................
OCEAN ..............................................................................................................
ORANGE ...........................................................................................................
GUANICA ...........................................................................................................
GUAYANILLA ....................................................................................................
PENUELAS ........................................................................................................
YAUCO ..............................................................................................................
However, we also recognize that some
hospices would experience decreases in
their area wage index values as a result
of our proposal. We also realize that
many hospices would have higher area
wage index values under our proposal.
To mitigate the potential impacts of
proposed policies on hospices, we have
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IL.
IL.
IL.
IL.
IL.
IL.
NY.
NY.
WV.
TN.
NJ.
NJ.
NJ.
NJ.
NY.
PR.
PR.
PR.
PR.
in the past provided for transition
periods when adopting changes that
have significant payment implications,
particularly large negative impacts. For
example, we have proposed and
finalized budget neutral transition
policies to help mitigate negative
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impacts on hospices following the
adoption of the new CBSA delineations
based on the 2010 decennial census data
in the FY 2016 hospice final rule (80 FR
47142). Specifically, we implemented a
1-year 50/50 blended wage to the new
OMB delineations. We applied a
blended wage index for one year (FY
2016) for all geographic areas that
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 was calculated equal to 50
percent of the FY 2016 wage index
using the old labor market area
delineation and 50 percent of the FY
2016 wage index using the new labor
market area delineation, which resulted
in an average of the two values. While
we believed that using the new OMB
delineations would create a more
accurate payment adjustment for
differences in area wage levels, we also
recognized that adopting such changes
may cause some short-term instability in
hospice payments, in particular for
hospices that would be negatively
impacted by the proposed adoption of
the updates to the OMB delineations.
Therefore, we are proposing a transition
policy to help mitigate any significant
negative impacts that hospices may
experience due to our proposal to adopt
the revised OMB delineations.
Specifically, for FY 2021 as a transition,
we are proposing to apply a 5 percent
cap on any decrease in a geographic
area’s wage index value from the wage
index value from the prior FY. This
transition would allow the effects of our
proposed adoption of the revised CBSA
delineations to be phased in over 2
years, where the estimated reduction in
a geographic area’s wage index would
be capped at 5 percent in FY 2021 (that
is, no cap would be applied to the
reduction in the wage index for the
second year (FY 2022)). We believe a 5
percent cap on the overall decrease in
a geographic area’s wage index value
would be appropriate for FY 2021, as it
provides predictability in payment
levels from FY 2020 to the upcoming FY
2021 and additional transparency
because it is administratively simpler
than our prior 1-year 50/50 blended
wage index approach. We believe 5
percent is a reasonable level for the cap
because it would effectively mitigate
any significant decreases in a
geographic area’s wage index value for
FY 2021. Because we believe that using
the new OMB delineations would create
a more accurate payment adjustment for
differences in area wage levels we are
proposing to include a cap on the
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overall decrease in a geographic area’s
wage index value.
Overall, the impact between the FY
2021 wage index using the old OMB
delineations and the proposed FY 2021
wage index using the new OMB
delineations would be 0.0 percent due
to the wage index standardization
factor, which ensures that wage index
updates and revisions are implemented
in a budget-neutral manner. We invite
comments on our proposed transition
methodology.
The proposed wage index applicable
to FY 2021 can be found in on the CMS
website at https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/Hospice. The proposed
hospice wage index for FY 2021 would
be effective October 1, 2020 through
September 30, 2021.
The wage index file also provides a
crosswalk between the FY 2021 wage
index using the current OMB
delineations and the FY 2021 wage
index using the proposed revised OMB
delineations that would be in effect in
FY 2021 if these proposed changes are
finalized. This file shows each state and
county and its corresponding proposed
wage index along with the previous
CBSA number, the new CBSA number
or alternate identification number, and
the new CBSA name.
B. Proposed Routine FY 2021 Hospice
Wage Index and Rate Update
1. Proposed FY 2021 Hospice Wage
Index
The hospice wage index is used to
adjust payment rates for hospice
agencies under the Medicare program to
reflect local differences in area wage
levels, based on the location where
services are furnished. The hospice
wage index utilizes the wage adjustment
factors used by the Secretary for
purposes of section 1886(d)(3)(E) of the
Act for hospital wage adjustments. Our
regulations at § 418.306(c) require each
labor market to be established using the
most current hospital wage data
available, including any changes made
by OMB to the Metropolitan Statistical
Areas (MSAs) definitions.
In the FY 2020 Hospice Wage Index
final rule (84 FR 38484), we finalized
the proposal to use the current FY’s
hospital wage index data to calculate
the hospice wage index values. In
section III.A above we discuss our
proposal to use the pre-floor, prereclassified hospital wage index data to
calculate the hospice wage index values.
For FY 2021, the proposed hospice wage
index would be based on the FY 2021
hospital pre-floor, pre-reclassified wage
index with a 5 percent cap on wage
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index decreases. This means that the
hospital wage data used for the hospice
wage index would reflect the new OMB
delineations but would not take into
account any geographic reclassification
of hospitals including those in
accordance with section 1886(d)(8)(B) or
1886(d)(10) of the Act. The appropriate
wage index value is applied to the labor
portion of the hospice payment rate
based on the geographic area in which
the beneficiary resides when receiving
RHC or CHC. The appropriate wage
index value is applied to the labor
portion of the payment rate based on the
geographic location of the facility for
beneficiaries receiving GIP or IRC.
In the FY 2006 Hospice Wage Index
final rule (70 FR 45135), we adopted the
policy that, for urban labor markets
without a hospital from which hospital
wage index data could be derived, all of
the Core-Based Statistical Areas
(CBSAs) within the state would be used
to calculate a statewide urban average
pre-floor, pre-reclassified hospital wage
index value to use as a reasonable proxy
for these areas. For FY 2021, the only
CBSA without a hospital from which
hospital wage data can be derived is
25980, Hinesville-Fort Stewart, Georgia.
The FY 2021 adjusted wage index value
for Hinesville-Fort Stewart, Georgia is
0.8539.
There exist some geographic areas
where there were no hospitals, and thus,
no hospital wage data on which to base
the calculation of the hospice wage
index. In the FY 2008 Hospice Wage
Index final rule (72 FR 50217 through
50218), we implemented a methodology
to update the hospice wage index for
rural areas without hospital wage data.
In cases where there was a rural area
without rural hospital wage data, we use
the average pre-floor, pre-reclassified
hospital wage index data from all
contiguous CBSAs, to represent a
reasonable proxy for the rural area. The
term ‘‘contiguous’’ means sharing a
border (72 FR 50217). Currently, the
only rural area without a hospital from
which hospital wage data could be
derived is Puerto Rico. However, 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
FY 2021, we propose to continue to use
the most recent pre-floor, prereclassified hospital wage index value
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available for Puerto Rico, which is
0.4047, subsequently adjusted by the
hospice floor.
As described in the August 8, 1997
Hospice Wage Index final rule (62 FR
42860), the pre-floor and prereclassified hospital wage index is used
as the raw wage index for the hospice
benefit. These raw wage index values
are subject to application of the hospice
floor to compute the hospice wage index
used to determine payments to
hospices. As discussed above the
adjusted pre-floor, pre-reclassified
hospital wage index values below 0.8
will be further adjusted by a 15 percent
increase subject to a maximum wage
index value of 0.8. For example, if
County A has a pre-floor, prereclassified hospital wage index value of
0.3994, we would multiply 0.3994 by
1.15, which equals 0.4593. Since 0.4593
is not greater than 0.8, then County A’s
hospice wage index would be 0.4593. In
another example, if County B has a prefloor, pre-reclassified hospital wage
index value of 0.7440, we would
multiply 0.7440 by 1.15 which equals
0.8556. Because 0.8556 is greater than
0.8, County B’s hospice wage index
would be 0.8.
The proposed hospice wage index
applicable for FY 2021 (October 1, 2020
through September 30, 2021) is
available on our website at: https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/Hospice/HospiceWage-Index.html.
2. Proposed FY 2021 Hospice Payment
Update Percentage
Section 4441(a) of the Balanced
Budget Act of 1997 (BBA) (Pub. L. 105–
33) amended section 1814(i)(1)(C)(ii)(VI)
of the Act to establish updates to
hospice rates for FYs 1998 through
2002. Hospice rates were to be updated
by a factor equal to the inpatient
hospital market basket percentage
increase set out under section
1886(b)(3)(B)(iii) of the Act, minus 1
percentage point. Payment rates for FYs
since 2002 have been updated according
to section 1814(i)(1)(C)(ii)(VII) of the
Act, which states that the update to the
payment rates for subsequent FYs must
be the inpatient market basket
percentage increase for that FY.
Section 3401(g) of the Affordable Care
Act mandated that, starting with FY
2013 (and in subsequent FYs), the
hospice payment update percentage
would be annually reduced by changes
in economy-wide productivity as
specified in section 1886(b)(3)(B)(xi)(II)
of the Act. The statute defines the
productivity adjustment to be equal to
the 10-year moving average of changes
in annual economy-wide private
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nonfarm business multifactor
productivity (MFP).
The proposed hospice payment
update percentage for FY 2021 is based
on the current estimate of the inpatient
hospital market basket update of 3.0
percent (based on IHS Global Inc.’s
fourth-quarter 2019 forecast with
historical data through the third quarter
2019). Due to the requirements at
sections 1886(b)(3)(B)(xi)(II) and
1814(i)(1)(C)(v) of the Act, the inpatient
hospital market basket update for FY
2021 of 3.0 percent must be reduced by
a MFP adjustment as mandated by
Affordable Care Act (currently estimated
to be 0.4 percentage point for FY 2021).
In effect, the proposed hospice payment
update percentage for FY 2021 would be
2.6 percent. If more recent data becomes
available after the publication of this
proposed rule and before the
publication of the final rule (for
example, more recent estimates of the
inpatient hospital market basket update
and MFP adjustment), we would use
such data to determine the hospice
payment update percentage for FY 2021
in the final rule.
Currently, the labor portion of the
hospice payment rates is as follows: For
RHC, 68.71 percent; for CHC, 68.71
percent; for General Inpatient Care,
64.01 percent; and for Respite Care,
54.13 percent. The non-labor portion is
equal to 100 percent minus the labor
portion for each level of care. Therefore,
the non-labor portion of the payment
rates is as follows: For RHC, 31.29
percent; for CHC, 31.29 percent; for
General Inpatient Care, 35.99 percent;
and for Respite Care, 45.87 percent.
RHC rate for days 61 and beyond. In
addition, in that final rule, we
implemented a SIA payment for RHC
when direct patient care is provided by
a RN or social worker during the last 7
days of the beneficiary’s life. The SIA
payment is equal to the CHC hourly rate
multiplied by the hours of nursing or
social work provided (up to 4 hours
total) that occurred on the day of
service, if certain criteria are met. In
order to maintain budget neutrality, as
required under section 1814(i)(6)(D)(ii)
of the Act, the new RHC rates were
adjusted by a service intensity add-on
budget neutrality factor (SBNF). The
SBNF is used to reduce the overall RHC
rate in order to ensure that SIA payment
are budget-neutral. At the beginning of
every fiscal year, SIA utilization is
compared to the prior year in order
calculate a budget neutrality
adjustment.
As shown in Table 5, for FY 2016
through FY 2020, there have been very
minor SBNF adjustments suggesting that
the utilization of the SIA from one year
to the next remains relatively constant.
Because the SBNF remains stable, we
are proposing to remove the factor to
simplify the RHC payment rate updates.
Therefore, the RHC payment rates
would typically only be updated by the
wage index standardization factor and
the hospice payment update percentage.
We invite comments on this proposal.
3. Proposed FY 2021 Hospice Payment
Rates
There are four payment categories that
are distinguished by the location and
intensity of the services provided. The
base payments are adjusted for
geographic differences in wages by
multiplying the labor share, which
varies by category, of each base rate by
the applicable hospice wage index. A
hospice is paid the RHC rate for each
day the beneficiary is enrolled in
hospice, unless the hospice provides
CHC, IRC, or GIP. CHC is provided
during a period of patient crisis to
maintain the patient at home; IRC is
short-term care to allow the usual
caregiver to rest and be relieved from
caregiving; and GIP is to treat symptoms
that cannot be managed in another
setting.
As discussed in the FY 2016 Hospice
Wage Index and Rate Update final rule
(80 FR 47172), we implemented two
different RHC payment rates, one RHC
rate for the first 60 days and a second
FY
FY
FY
FY
FY
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TABLE 5—FY 2016–FY 2020 SIA
BUDGET NEUTRALITY FACTORS
Days 1–60
2016
2017
2018
2019
2020
............
............
............
............
............
0.9806
1.0000
1.0017
0.9991
0.9924
Days 61+
0.9957
0.9999
1.0005
0.9998
0.9982
In the FY 2017 Hospice Wage Index
and Rate Update final rule (81 FR
52156), we initiated a policy of applying
a wage index standardization factor to
hospice payments in order to eliminate
the aggregate effect of annual variations
in hospital wage data. In order to
calculate the wage index
standardization factor, we simulate total
payments using the FY 2020 hospice
wage index and FY 2020 payment rates
and compare it to our simulation of total
payments using the FY 2021 wage index
with a 5 percent cap on wage index
decreases and FY 2020 payment rates.
By dividing payments for each level of
care (RHC days 1 through 60, RHC days
61+, CHC, IRC, and GIP) using the FY
2020 wage index and payment rates by
payments for each level of care using
the FY 2021 wage index and payment
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rates, we obtain a wage index
standardization factor for each level of
care. The wage index standardization
factors for each level of care are shown
in the tables below.
The proposed FY 2021 RHC rates
shown in Table 6 will only be updated
by the wage index standardization factor
and the hospice payment update
percentage as mentioned previously.
20959
The proposed FY 2021 payment rates
for CHC, IRC, and GIP are shown in
Table 7.
TABLE 6—PROPOSED FY 2021 HOSPICE RHC PAYMENT RATES
FY 2020
payment rates
Code
Description
651 ..........................
651 ..........................
Routine Home Care (days 1–60) .............
Routine Home Care (days 61+) ...............
$194.50
153.72
Wage index
standardization
factor
Proposed
FY 2021 hospice
payment update
× 0.9989
× 0.9990
× 1.026
× 1.026
Proposed
FY 2021
payment rates
$199.34
157.56
TABLE 7—PROPOSED FY 2021 HOSPICE CHC, IRC, AND GIP PAYMENT RATES
FY 2020
payment rates
Code
Description
652 ..........................
Continuous Home Care Full Rate = 24
hours of care.
Inpatient Respite Care .............................
General Inpatient Care .............................
655 ..........................
656 ..........................
Wage index
standardization
factor
FY 2021 hospice
payment update
FY 2021
payment rates
$1,395.63
× 0.9991
× 1.026
* $1,430.63
450.10
1,021.25
× 0.9993
× 0.9988
× 1.026
× 1.026
461.48
1,046.55
* ($59.61 per hour.)
Sections 1814(i)(5)(A) through (C) of
the Act require that hospices submit
quality data, based on measures to be
specified by the Secretary. In the FY
2012 Hospice Wage Index final rule (76
FR 47320 through 47324), we
implemented a HQRP as required by
section 3004 of the Affordable Care Act.
Hospices were required to begin
collecting quality data in October 2012,
and submit that quality data in 2013.
Section 1814(i)(5)(A)(i) of the Act
requires that beginning with FY 2014
and each subsequent FY, the Secretary
shall reduce the market basket update
by 2 percentage points for any hospice
that does not comply with the quality
data submission requirements with
respect to that FY. The proposed FY
2021 rates for hospices that do not
submit the required quality data would
be updated by the proposed FY 2021
hospice payment update percentage of
2.6 percent minus 2 percentage points.
These rates are shown in Tables 8 and
9.
TABLE 8—PROPOSED FY 2021 HOSPICE RHC PAYMENT RATES FOR HOSPICES THAT DO NOT SUBMIT THE REQUIRED
QUALITY DATA
FY 2020
payment rates
Code
Description
651 ..........................
651 ..........................
Routine Home Care (days 1–60) .............
Routine Home Care (days 61+) ...............
$194.50
153.72
Wage index
standardization
factor
Proposed
FY 2021 hospice
payment update of
2.6% minus
2 percentage
points
= +0.6%
× 0.9989
× 0.9990
× 1.006
× 1.006
Proposed
FY 2021
payment rates
$195.45
154.49
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TABLE 9—PROPOSED FY 2021 HOSPICE CHC, IRC, AND GIP PAYMENT RATES FOR HOSPICES THAT DO NOT SUBMIT
THE REQUIRED QUALITY DATA
FY 2020
payment rates
Code
Description
652 ..........................
Continuous Home Care Full Rate= 24
hours of care.
Inpatient Respite Care .............................
General Inpatient Care .............................
655 ..........................
656 ..........................
Wage index
standardization
factor
Proposed
FY 2021 hospice
payment update of
2.6% minus
2 percentage
points
= +0.6%
$1,395.63
× 0.9991
× 1.006
* $1,402.74
450.10
1,021.25
× 0.9993
× 0.9988
× 1.006
× 1.006
452.48
1,026.14
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* ($58.45 per hour.)
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FY 2021
payment rates
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4. Proposed Hospice Cap Amount for FY
2021
As discussed in the FY 2016 Hospice
Wage Index and Rate Update final rule
(80 FR 47183), we implemented changes
mandated by the IMPACT Act of 2014
(Pub. L. 113–185). Specifically, for
accounting years that end after
September 30, 2016 and before October
1, 2025, the hospice cap is updated by
the hospice payment update percentage
rather than using the CPI–U. The
proposed hospice cap amount for the FY
2021 cap year will be $30,743.86, which
is equal to the FY 2020 cap amount
($29,964.78) updated by the proposed
FY 2021 hospice payment update
percentage of 2.6 percent.
C. Election Statement Content
Modifications and Addendum To
Provide Greater Coverage Transparency
and Safeguard Patient Rights
In the FY 2020 Hospice final rule (84
FR 38484), we finalized modifications to
the hospice election statement content
requirements at § 418.24(b) to increase
coverage transparency for patients
under a hospice election. In addition to
the existing election statement content
requirements at § 418.24(b), we finalized
that hospices also would be required to
include the following on the election
statement:
• Information about the holistic,
comprehensive nature of the Medicare
hospice benefit.
• A statement that, although it would
be rare, there could be some necessary
items, drugs, or services that will not be
covered by the hospice because the
hospice has determined that these
items, drugs, or services are to treat a
condition that is unrelated to the
terminal illness and related conditions.
• Information about beneficiary costsharing for hospice services.
• Notification of the beneficiary’s (or
representative’s) right to request an
election statement addendum that
includes a written list and a rationale
for the conditions, items, drugs, or
services that the hospice has determined
to be unrelated to the terminal illness
and related conditions and that
immediate advocacy is available
through the Beneficiary and Family
Centered Care Quality Improvement
Organization (BFCC–QIO) if the
beneficiary (or representative) disagrees
with the hospice’s determination.
Also in the CY 2020 hospice final
rule, we finalized the requirements as
set forth at § 418.24(c) for the hospice
election statement addendum titled,
‘‘Patient Notification of Hospice NonCovered Items, Services, and Drugs’’
and would include the following
content requirements:
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1. Name of the hospice;
2. Beneficiary’s name and hospice
medical record identifier;
3. Identification of the beneficiary’s
terminal illness and related conditions;
4. A list of the beneficiary’s current
diagnoses/conditions present on
hospice admission (or upon plan of care
update, as applicable) and the
associated items, services, and drugs,
not covered by the hospice because they
have been determined by the hospice to
be unrelated to the terminal illness and
related conditions;
5. A written clinical explanation, in
language the beneficiary and his or her
representative can understand, as to
why the identified conditions, items,
services, and drugs are considered
unrelated to the terminal illness and
related conditions and not needed for
pain or symptom management. This
clinical explanation would be
accompanied by a general statement that
the decision as to whether or not
conditions, items, services, and drugs is
related is made for each patient and that
the beneficiary should share this
clinical explanation with other health
care providers from which they seek
services unrelated to their terminal
illness and related conditions;
6. References to any relevant clinical
practice, policy, or coverage guidelines.
7. Information on:
a. The purpose of Addendum; and
b. the patient’s right to immediate
advocacy.
8. Name and signature of Medicare
hospice beneficiary (or representative)
and date signed, along with a statement
that signing this addendum (or its
updates) is only acknowledgement of
receipt of the addendum (or its updates)
and not necessarily the beneficiary’s
agreement with the hospice’s
determinations.
We finalized a policy requiring that
the election statement modifications
apply to all hospice elections. However,
the addendum only would be furnished
to beneficiaries, their representatives,
non-hospice providers, or Medicare
contractors who requested such
information. Additionally, we finalized
a policy that if the beneficiary (or
representative) requested an addendum
at the time of hospice election, the
hospice would have 5 days from the
start of hospice care to furnish this
information in writing. Furthermore, if
the beneficiary requested the election
statement at the time of hospice
election, but died within 5 days, the
hospice would not be required to
furnish the addendum as the
requirement would be deemed to have
been met in this circumstance. If the
addendum was requested during the
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course of hospice care (that is, after the
date of the hospice election), we
finalized a policy that the hospice
would have 72 hours from the date of
the request to provide the written
addendum.
The election statement modifications
and the election statement addendum
requirements will be effective for
hospice elections beginning on and after
October 1, 2020 (that is, FY 2021).
While we finalized the content
requirements for the election statement
addendum, we did not finalize a
specific form, and hospices will develop
and design the addendum to meet their
needs, similar to how hospices develop
their own hospice election statement.
Additionally, we finalized a policy
that the signed addendum (and any
signed updates) would be a new
condition for payment. However, this
does not mean in order to meet this
condition for payment that the
beneficiary (or representative), or nonhospice provider would have to agree
with the hospice’s determination. For
purposes of this condition for payment,
we finalized the policy that the signed
addendum was only an
acknowledgement of the beneficiary’s
(or representative’s) receipt of the
addendum (or its updates) and this
payment requirement would be met if
there was a signed addendum (and any
signed updates) in the requesting
beneficiary’s medical record with the
hospice. This addendum would not be
required to be submitted routinely with
each hospice claim. Likewise, the
hospice beneficiary (or representative)
would not have to separately consent to
the release of this information to nonhospice providers furnishing services
for unrelated conditions, because the
Health Insurance Portability and
Accountability Act of 1996 (HIPAA)
Privacy Rule allows those doctors,
nurses, hospitals, laboratory
technicians, and other health care
providers that are covered entities to use
or disclose protected health
information, such as X-rays, laboratory
and pathology reports, diagnoses, and
other medical information for treatment
purposes without the patient’s express
authorization. This includes sharing the
information to consult with other
providers, including providers who are
not covered entities, to treat a different
patient, or to refer the patient (45 CFR
164.506).
We delayed the effective date of the
election statement content
modifications and the hospice election
statement addendum until FY 2021 to
allow hospices adequate time to make
the necessary modifications to their
current election statements, develop
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their own election statement addendum,
and make any changes to their current
software and business processes to
accommodate the requirements.
Furthermore, in the FY 2020 Hospice
final rule, we stated we would examine
the operational and logistical issues
highlighted by commenters in response
to the election statement addendum to
determine if any additional proposals
would be required for FY 2021
rulemaking. These issues included
concerns about the best way to furnish
this information to patients and their
representatives in the most clear and
unobtrusive way; mechanisms to make
necessary changes or adjustments to the
addendum content; obtaining necessary
signature(s) on the addendum; expected
documentation in the hospice’s medical
record to determine whether the
addendum was requested, when it was
requested, whether it was present, and
whether the condition for payment
requirement has been met; expectations
as to the auditing process by the
Medicare Administrative Contractors
(MACs) when an Additional
Documentation Request (ADR) was
made; and the provision of MAC and
BFCC–QIO education.
As noted in the FY 2020 Hospice final
rule (84 FR 38509), the hospice
Conditions of Participation (CoPs) at
§ 418.52(a) require that during the initial
assessment visit, in advance of
furnishing care, the hospice must
provide the patient or representative
with verbal (meaning spoken) and
written notice of the patient’s rights and
responsibilities in a language and
manner that the patient understands.
Furthermore, hospices are to inform the
beneficiary of the services covered
under the Medicare hospice benefit, as
well as the scope of such services. The
intent of this standard was to ensure
that patients were aware of their
potential out-of-pocket costs for hospice
care, such as co-payments, so that they
would not be surprised by financial
concerns at this stressful time (73 FR
32097). Therefore, hospices are already
tasked with providing detailed
information on hospice services and
limitations to those services to the
patient upon election of the benefit. We
believe that the addendum further
complements these requirements by
ensuring that the hospice informs them
of any items, services, or drugs which
the terminally ill individual would have
to seek outside of the benefit. As we also
noted in the FY 2020 Hospice final rule,
we stated that we would furnish a
modified model election statement and
election statement addendum to provide
the industry as they move forward
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making the changes to their own
election statements and as they develop
an addendum to communicate those
items, services, and drugs they will not
be covering because they have
determined them to be unrelated to the
terminal illness and related conditions.
We have posted the modified model
election statement and addendum on
the Hospice Center web page, https://
www.cms.gov/Center/Provider-Type/
Hospice-Center, to give hospices an idea
as to the requirements and how they can
develop their own forms. Because we
detailed the content requirements in the
FY 2020 Hospice final rule, we believe
that hospices have been provided with
specific information in order to develop
their own election statement addendum
without any further proposals. We
expect to issue an MLN Matters® article
to accompany this proposed rule to
further educate the hospice community
as to the election statement and
addendum content requirements
effective for hospice elections beginning
on and after October 1, 2020.
Regarding mechanisms to make any
necessary changes or adjustments to the
requested addendum content, hospices
have the option to make updates to the
addendum, if necessary, to include such
conditions, items, services and drugs
they determine to be unrelated
throughout the course of a hospice
election in a format that works best for
their current processes. Hospices are
already required to make updates to the
plan of care at least every 15 days, or
more often as the patient’s condition
warrants, in accordance with the
requirements at § 418.56(d). Therefore,
hospices already have systems in place
to address and document the changing
needs of the patient via the hospice plan
of care. We would expect that hospices
would adopt a similar process for
making any necessary changes or
adjustments to the election statement
addendum. Moreover, we do not expect
that there would be frequent changes to
the addendum, especially as a patient
continues in a hospice election and
where most conditions are or become
related to the terminal prognosis and
therefore, the responsibility of the
hospice to manage.
The hospice election statement has
always required the signature of the
electing individual (or their
representative). This requirement has
not changed with the modifications to
the election statement and if the
individual (or representative) requests
the election statement addendum, the
finalized requirements include the
signature of the individual (or
representative), as well as the date the
addendum was signed. We would
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expect that the signature on the
addendum would be similar to how
each hospice obtains the individual’s
signature on the election statement
itself. That is, if the individual
electronically signs the election
statement, there is nothing prohibiting
the hospice from having the addendum
electronically signed. We note that it is
at the contractor’s discretion as to how
they address patient/representative
electronic signatures in their review of
medical records, so hospices should
confirm with their respective Medicare
contractors as to the use of electronic
signatures for beneficiary (or
representative) signatures. However, the
addendum is required to be furnished to
the individual in writing so that the
individual (or representative) can
understand the information provided,
make treatment decisions based on that
information, and share such information
with non-hospice providers rendering
items and services to the individual.
Therefore, the format of the addendum
must be usable for the patient; most
often we would expect that this would
be in a hard copy format that the
individual can keep for his/her own
records, similar to how hospices are
required by the hospice CoPs at
§ 418.52(a)(3) to provide the individual
a copy of the notice of patient rights and
responsibilities.
For purposes of this condition for
payment, we finalized that the signed
addendum is only acknowledgement of
the beneficiary’s (or representative’s)
receipt of the addendum (or its updates)
and this payment requirement would be
met if there was a signed addendum
(and any signed updates) in the
requesting beneficiary’s medical record
with the hospice. The hospice CoPs at
§ 418.104(a)(2) says that the patient’s
record must include ‘‘signed copies of
the notice of patient rights in
accordance with § 418.52 and election
statement in accordance with § 418.24.’’
As the addendum is part of the election
statement as set forth in § 418.24, then
it is also a required part of the patient’s
record, if the addendum has been
requested by the beneficiary (or
representative).
We believe that a signed addendum
connotes that the hospice had the
discussion about the addendum and its
content. Likewise, in the event that the
individual (or representative) did not
request the addendum, we would expect
hospices to document, in some fashion,
that the addendum was discussed with
the patient (or representative) at the
time of admission, similar to how other
patient and family discussions are
documented in the hospice’s clinical
record. Hospices can develop a way to
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document whether or not the addendum
was requested at the time of hospice
election (or at any time throughout the
course of hospice care). This could be
done in checklist format or as anecdotal
notes by the nurse. However, we did not
propose a specific format in which to
document such conversations and
hospices can develop their own
processes to incorporate into their
current workflow. We believe careful
documentation that the addendum was
discussed and whether or not it was
requested would be an essential step
hospices could take to protect
themselves from possible claims denials
related to any absence of an addendum
(or addendum update) in the medical
record. The model election form and
addendum posted on the Hospice
Center web page will provide one
example as to how hospices can
document that the addendum was
discussed at the time of election. We
believe that hospices are the best to
determine how to assimilate this
requirement into their current processes
and that it is not necessary to propose
a specific process, thereby creating extra
burden for hospices.
For purposes of an ADR and to
mitigate any concerns about situations
in which there was no beneficiary (or
representative) request for the
addendum, hospices may submit any
documentation as it relates to the
presence or non-presence of the
addendum, given that it is a condition
for payment. That is, if the beneficiary
(or representative) requested the
election statement addendum, then the
hospice should submit the signed
addendum as part of any ADR. And if
the beneficiary (or representative) did
not request the election statement
addendum, then the hospice can submit
any documentation in response to an
ADR that indicates that no beneficiary
(or representative) request for an
addendum was made to ensure that it is
clear that the hospice addressed the
addendum with the beneficiary. We
believe that this situation is similar to
the patient-designated attending
physician requirement on the hospice
election statement. That is, the hospice
attending physician must be identified
by the beneficiary on the hospice
election statement, but only if the
beneficiary designates one. We are
aware that many hospices have
included a checkbox on their election
statement to indicate when the
beneficiary has opted not to designate
an attending physician. Hospices may
choose to adopt a similar process for the
election statement addendum to ensure
that they have documented those
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situations when a beneficiary does not
request an addendum upon having been
told of their right to request one.
However, we understand stakeholder
concerns regarding potential claims
denials in the event that there is no
signed addendum in the beneficiary’s
hospice clinical record because it was
not requested. While we believe that a
consistent, comprehensive process for
documenting when a beneficiary (or
representative) does not request the
addendum will help mitigate claim
denial issues, upon display of this
proposed rule, we have posted a model
hospice election statement and
addendum on the Hospice Center web
page (https://www.cms.gov/Center/
Provider-Type/Hospice-Center) to assist
hospices in understanding the content
requirements. We remind hospices that
the modifications to the election
statement are effective for all hospice
elections beginning on and after October
1, 2020. The model election statement
posted on the Hospice Center web page
illustrates how hospices can incorporate
the finalized modifications into their
own election statements. The model
addendum, also posted on the Hospice
Center web page, demonstrates how
hospices can include all of the
addendum requirements in a format that
could assimilate into their current
processes. We are soliciting comments
on both of these model examples to see
if they are helpful in educating hospices
in how to meet these requirements
effective on October 1, 2020.
Additionally, we will provide education
to Medicare contractors to help ensure
that these finalized policies are fully
understood by all relevant stakeholders.
We are not proposing any changes to
the policies finalized in the FY 2020
Hospice final rule regarding the election
statement content modifications or the
requirements for the election statement
addendum as set forth at § 418.24. These
finalized policies will be effective for all
hospice elections beginning on and after
October 1, 2020.
Note: There are no proposals or
updates in this proposed rule to the
Hospice Quality Reporting Program.
IV. Collection of Information
Requirements
This document does not impose
information collection requirements,
that is, reporting, recordkeeping or
third-party disclosure requirements.
Consequently, there is no need for
review by the Office of Management and
Budget under the authority of the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.).
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V. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
time specified in the DATES section of
this preamble, and, when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
VI. Regulatory Impact Analysis
A. Statement of Need
This proposed rule meets the
requirements of our regulations at
§ 418.306(c) and (d), which require
annual issuance, in the Federal
Register, of the hospice wage index
based on the most current available
CMS hospital wage data, including any
changes to the definitions of CBSAs or
previously used Metropolitan Statistical
Areas (MSAs), as well as any changes to
the methodology for determining the per
diem payment rates. This proposed rule
would also update payment rates for
each of the categories of hospice care,
described in § 418.302(b), for FY 2021 as
required under section
1814(i)(1)(C)(ii)(VII) of the Act. The
payment rate updates are subject to
changes in economy-wide productivity
as specified in section
1886(b)(3)(B)(xi)(II) of the Act.
B. Overall Impacts
We estimate that the aggregate impact
of the payment provisions in this
proposed rule would result in an
estimated increase of $580 million in
payments to hospices, resulting from the
hospice payment update percentage of
2.6 percent for FY 2021. The impact
analysis of this proposed rule represents
the projected effects of the changes in
hospice payments from FY 2020 to FY
2021. Using the most recent data
available at the time of rulemaking, in
this case FY 2019 hospice claims data
as of January 13, 2020, we apply the
current FY 2020 wage index. Then,
using the same FY 2019 data, we apply
the FY 2021 wage index to simulate FY
2021 payments. Finally, we apply a
budget neutrality adjustment so that the
aggregate simulated payments do not
increase or decrease due to changes in
the wage index.
Certain events may limit the scope or
accuracy of our impact analysis, because
such an analysis is susceptible to
forecasting errors due to other changes
in the forecasted impact time period.
The nature of the Medicare program is
such that the changes may interact, and
the complexity of the interaction of
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these changes could make it difficult to
predict accurately the full scope of the
impact upon hospices.
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), the Congressional
Review Act (5 U.S.C. 804(2)), and
Executive Order 13771 on Reducing
Regulation and Controlling Regulatory
Costs (January 30, 2017).
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). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (1) Having an annual
effect on the economy of $100 million
or more in any 1 year, or adversely and
materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
economically significant effects ($100
million or more in any 1 year). We
estimate that this rulemaking is
‘‘economically significant’’ as measured
by the $100 million threshold, and
hence also a major rule under the
Congressional Review Act. Accordingly,
we have prepared a RIA that, to the best
of our ability presents the costs and
benefits of the rulemaking.
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C. Anticipated Effects
The Regulatory Flexibility Act (RFA)
requires agencies to analyze options for
regulatory relief of small businesses if a
rule has a significant impact on a
substantial number of small entities.
The great majority of hospitals and most
other health care providers and
suppliers are small entities by meeting
the Small Business Administration
(SBA) definition of a small business (in
the service sector, having revenues of
less than $7.5 million to $38.5 million
in any 1 year), or being nonprofit
organizations. For purposes of the RFA,
we consider all hospices as small
entities as that term is used in the RFA.
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 effect of the FY 2021
hospice payment update percentage
results in an overall increase in
estimated hospice payments of 2.6
percent, or $580 million. The
distributional effects of the proposed FY
2021 hospice wage index do not result
in a greater than 5 percent of hospices
experiencing decreases in payments of 3
percent or more of total revenue.
Therefore, the Secretary has determined
that this rule will not create a significant
economic impact on a substantial
number of small entities.
In addition, section 1102(b) of the
Social Security Act requires us to
prepare a regulatory impact analysis 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 603 of the 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 rule will only affect hospices.
Therefore, the Secretary has determined
that this rule will not have a significant
impact on the operations of a substantial
number of small rural hospitals.
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 1 year of $100
million in 1995 dollars, updated
annually for inflation. The 2020 UMRA
threshold is $156 million. This rule is
not anticipated to have an effect on
state, local, or tribal governments, in the
aggregate, or on the private sector of
$156 million or more.
Executive Order 13132 establishes
certain requirements that an agency
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must meet when it promulgates a
proposed rule (and subsequent 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 rule under these
criteria of Executive Order 13132, and
have determined that it will not impose
substantial direct costs on state or local
governments.
If regulations impose administrative
costs on private entities, such as the
time needed to read and interpret this
proposed rule, we should estimate the
cost associated with regulatory review.
Due to the uncertainty involved with
accurately quantifying the number of
entities that will review the rule, we
assume that the total number of unique
commenters on last year’s proposed rule
will be the number of reviewers of this
proposed rule. We acknowledge that
this assumption may understate or
overstate the costs of reviewing this
proposed rule. It is possible that not all
commenters reviewed last year’s rule in
detail, and it is also possible that some
reviewers chose not to comment on the
proposed rule. For these reasons we
thought that the number of past
commenters would be a fair estimate of
the number of reviewers of this
proposed rule.
Using the wage information from the
Bureau of Labor Statistics (BLS) for
medical and health service managers
(Code 11–9111), we estimate that the
cost of reviewing this rule is $107.38 per
hour, including overhead and fringe
benefits (https://www.bls.gov/oes/
current/oes_nat.htm). This proposed
rule consists of approximately 15,000
words. Assuming an average reading
speed of 250 words per minute, it would
take approximately 0.50 hours for the
staff to review half of it. For each
hospice that reviews the rule, the
estimated cost is $53.69 (0.50 hour ×
$107.38). Therefore, we estimate that
the total cost of reviewing this
regulation is $7,946.12 ($53.69 × 148
reviewers).
D. Detailed Economic Analysis
1. Proposed Hospice Payment Update
for FY 2021
The FY 2021 hospice payment
impacts appear in Table 11. We tabulate
the resulting payments according to the
classifications (for example, provider
type, geographic region, facility size),
and compare the difference between
current and future payments to
determine the overall impact. The first
column shows the breakdown of all
hospices by provider type and control
(non-profit, for-profit, government,
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other), facility location, facility size. The
second column shows the number of
hospices in each of the categories in the
first column. The third column shows
the effect of using the FY 2021 updated
wage data. This represents the effect of
moving from the FY 2020 hospice wage
index to the FY 2021 unadjusted
hospice wage index with the old OMB
delineations. The fourth column shows
the effect of moving from the old OMB
delineations to the new OMB
delineations with a 5 percent cap on
wage index decreases. The aggregate
impact of the changes in columns three
and four is zero percent, due to the
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hospice wage index standardization
factor. However, there are distributional
effects of the FY 2021 hospice wage
index. The fifth column shows the
proposed FY 2021 hospice payment
update percentage of 2.6 percent as
mandated by section 1814(i)(1)(C) of the
Act, and is consistent for all providers.
The 2.6 percent hospice payment
update percentage is based on an
estimated 3.0 percent inpatient hospital
market basket update, reduced by a 0.4
percentage point productivity
adjustment. It is projected that aggregate
payments would increase by 2.6
percent, assuming hospices do not
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change their service and billing
practices. The sixth column shows the
estimated total impact for FY 2021.
We note that simulated payments are
based on utilization in FY 2019 as seen
on Medicare hospice claims (accessed
from the CCW in January of 2020) and
only include payments related to the
level of care and do not include
payments related to the service intensity
add-on.
As illustrated in Table 10, the
combined effects of all the proposals
vary by specific types of providers and
by location.
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E. Alternatives Considered
For the FY 2021 Hospice Wage Index
and Rate Update proposed rule, we
considered alternatives to the proposals
articulated in section III.A. We
considered not adopting the OMB
delineations. However, we have
historically adopted the latest OMB
delineations as we believe that
implementing the new OMB
delineations would result in wage index
values being more representative of the
actual costs of labor in a given area.
Additionally, we considered not
implementing the 1-year 5 percent cap
on wage index decreases. However, we
decided that the 5 percent cap was a
better option for the transition because
it would mitigate potential negative
impacts from the transition to the new
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OMB delineations and allow providers
the opportunity to adjust to the changes
in their wage index values gradually.
F. Accounting Statement
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/omb/circulars/
a004/a-4.pdf), in Table 11, we have
prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of this proposed rule. Table
11 provides our best estimate of the
possible changes in Medicare payments
under the hospice benefit as a result of
the policies in this proposed rule. This
estimate is based on the data for 4,408
hospices in our impact analysis file,
which was constructed using FY 2019
claims available in January 2020. All
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expenditures are classified as transfers
to hospices.
TABLE 11—ACCOUNTING STATEMENT:
OF
ESTIMATED
CLASSIFICATION
TRANSFERS AND COSTS, FROM FY
2020 TO FY 2021
Category
Annualized Monetized
Transfers
From Whom to
Whom?
Transfers
$580 million. *
Federal Government
to Medicare Hospices.
* The net increase of $580 million in transfer
payments is a result of the 2.6 percent hospice payment update compared to payments
in FY 2020.
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G. Regulatory Reform Analysis Under
E.O. 13771
FEDERAL COMMUNICATIONS
COMMISSION
Executive Order 13771, entitled
‘‘Reducing Regulation and Controlling
Regulatory Costs,’’ was issued on
January 30, 2017 (82 FR 9339, February
3, 2017) and requires that the costs
associated with significant new
regulations ‘‘shall, to the extent
permitted by law, be offset by the
elimination of existing costs associated
with at least two prior regulations.’’ It
has been determined that this proposed
rule is an action that primarily results
in transfers and does not impose more
than de minimis costs as described
above and thus is not a regulatory or
deregulatory action for the purposes of
Executive Order 13771.
47 CFR Parts 1, 2, 18
H. Conclusion
We estimate that aggregate payments
to hospices in FY 2021 will increase by
$580 million, or 2.6 percent, compared
to payments in FY 2020. We estimate
that in FY 2021, hospices in urban areas
will experience, on average, 2.6 percent
increase in estimated payments
compared to FY 2020. While hospices in
rural areas will experience, on average,
2.8 percent increase in estimated
payments compared to FY 2020.
Hospices providing services in the
Middle Atlantic region would
experience the largest estimated
increases in payments of 3.0 percent.
Hospices serving patients in areas in the
New England and Outlying regions
would experience, on average, the
lowest estimated increase of 1.7 percent
and 1.8 percent, respectively in FY 2021
payments.
In accordance with the provisions of
Executive Order 12866, this regulation
was reviewed by the Office of
Management and Budget.
Dated: March 24, 2020.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: April 9, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2020–07959 Filed 4–10–20; 4:15 pm]
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[ET Docket No. 19–226; FCC 19–126; FRS
16643]
Human Exposure to Radiofrequency
Electromagnetic Fields; Correction
Federal Communications
Commission.
ACTION: Proposed rule; correction.
AGENCY:
The Federal Communications
Commission (Commission) is correcting
a date that appeared in the Federal
Register on April 6, 2020. In this
document, the Commission seeks
comment on expanding the range of
frequencies for which its radiofrequency
(RF) exposure limits apply; on applying
localized exposure limits above 6 GHz
in parallel to the localized exposure
limits already established below 6 GHz;
on specifying the conditions and
methods for averaging the RF exposure,
in both time and area, during evaluation
for compliance with the RF exposure
limits in the rules; on addressing new
RF exposure issues raised by wireless
power transfer (WPT) devices; and on
the definition of a WPT device.
DATES: Comments are due on or before
May 15, 2020, and reply comments are
due on or before June 15, 2020.
ADDRESSES: Interested parties may
submit comments and replies, identified
by ET Docket No. 19–226, by any of the
following methods:
• Federal Communications
Commission’s website: https://
fja_llfoss.fcc.gov/ecfs2/. Follow the
instructions for submitting comments.
• Mail: Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. All
filings must be addressed to the
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Secretary, Federal Communications
Commission.
• People with Disabilities: Contact the
Commission to request reasonable
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documents, sign language interpreters,
CART, etc.) by email: FCC504@fcc.gov
or phone: 202–418–0530 or TTY: 202–
418–0432.
For detailed instructions on submitting
comments and additional information
on the rulemaking process, see the
SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT:
Martin Doczkat, email: martin.doczkat@
fcc.gov of the Office of Engineering and
Technology Electromagnetic
SUMMARY:
PO 00000
Frm 00082
Fmt 4702
Sfmt 4702
20967
Compatibility Division; the
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information collection requirements
contained in this document, contact
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Director, at (202) 418–2991 or
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SUPPLEMENTARY INFORMATION: In FR Doc.
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the Federal Register on April 6, 2020,
the following correction is made:
■ 1. On page 19117, in the first column,
in DATES, the instruction ‘‘reply
comments are due on or before June 1,
2020.’’ is corrected to read ‘‘reply
comments are due on or before June 15,
2020.’’
Dated: April 6, 2020.
Federal Communications Commission.
Cecilia Sigmund,
Federal Register Liaison Officer.
[FR Doc. 2020–07866 Filed 4–14–20; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 17
[Docket No. FWS–R2–ES–2020–0007;
FXES111302WOLF0–201–FF02ENEH00]
RIN 1018–BE52
Endangered and Threatened Wildlife
and Plants; Revision to the
Nonessential Experimental Population
of the Mexican Wolf (Canis lupus
baileyi); Environmental Impact
Statement
Fish and Wildlife Service,
Interior.
ACTION: Notice of intent to prepare a
supplement to an environmental impact
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AGENCY:
We, the U.S. Fish and
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SUMMARY:
E:\FR\FM\15APP1.SGM
15APP1
]]>Agencies
[Federal Register Volume 85, Number 73 (Wednesday, April 15, 2020)]
[Proposed Rules]
[Pages 20949-20967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07959]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 418
[CMS-1733-P]
RIN 0938-AU09
Medicare Program; FY 2021 Hospice Wage Index and Payment Rate
Update
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would update the hospice wage index,
payment rates, and cap amount for fiscal year (FY) 2021. This rule also
proposes changes to the hospice wage index by adopting the most recent
Office of
[[Page 20950]]
Management and Budget statistical area delineations, with a 5 percent
cap on wage index decreases. Finally, this proposed rule summarizes the
changes to the hospice election statement finalized in the FY 2020
Hospice Wage Index and Rate Update final rule and effective for October
1, 2020; and provides hospices with a model election statement and
sample addendum.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. on June 9, 2020.
ADDRESSES: In commenting, refer to file code CMS-1733-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (choose only one of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1733-P, P.O. Box 8010,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1733-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: For general questions about hospice
payment policy, send your inquiry via email to:
[email protected].
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: https://www.regulations.gov. Follow the search instructions on
that website to view public comments.
Wage index addenda will be available only through the internet on
our website at: (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.)
I. Executive Summary
A. Purpose
This rule proposes updates to the hospice wage index, payment
rates, and cap amount for fiscal year (FY) 2021, as required under
section 1814(i) of the Social Security Act (the Act). In addition, this
rule proposes to adopt the most recent Office of Management and Budget
(OMB) statistical area delineations and apply a 5 percent cap on wage
index decreases; and proposes to sunset the Service Intensity Add-on
(SIA) budget neutrality factor.
B. Summary of the Major Provisions
Section III.A.1 of this rule proposes to adopt the OMB statistical
area delineations outlined in a September 14, 2018, OMB bulletin.
Section III.A.2 proposes to apply a 5 percent cap on wage index
decreases. Section III.B.1 proposes updates to the hospice wage index
and makes the application of the updated wage data budget neutral for
all four levels of hospice care. In section III.B.2 of this proposed
rule we discuss the proposed FY 2021 hospice payment update percentage
of 2.6 percent. Section III.B.3 of this proposed rule proposes to
sunset the service intensity add-on budget neutrality factor (SBNF) and
update the hospice payment rates. Section III.B.4 proposes the hospice
cap amount for FY 2021 by the hospice payment update percentage
discussed in section III.B.2 of this rule. Finally, section III.C
discusses the modifications to the hospice election statement and the
election statement addendum that were finalized in the FY 2020 Hospice
final rule (84 FR 38484) and solicits comments on model examples of the
modified election statement and the addendum.
C. Summary of Impacts
The overall economic impact of this proposed rule is estimated to
be $580 million in increased payments to hospices for FY 2021.
II. Background
A. Hospice Care
Hospice care is a comprehensive, holistic approach to treatment
that recognizes the impending death of a terminally ill individual and
warrants a change in the focus from curative care to palliative care
for relief of pain and for symptom management. Medicare regulations
define ``palliative care'' as patient and family-centered care that
optimizes quality of life by anticipating, preventing, and treating
suffering. Palliative care throughout the continuum of illness involves
addressing physical, intellectual, emotional, social, and spiritual
needs and to facilitate patient autonomy, access to information, and
choice (42 CFR 418.3). Palliative care is at the core of hospice
philosophy and care practices, and is a critical component of the
Medicare hospice benefit.
The goal of hospice care is to help terminally ill individuals
continue life with minimal disruption to normal activities while
remaining primarily in the home environment. A hospice uses an
interdisciplinary approach to deliver medical, nursing, social,
psychological, emotional, and spiritual services through a
collaboration of professionals and other caregivers, with the goal of
making the beneficiary as physically and emotionally comfortable as
possible. Hospice is compassionate beneficiary and family/caregiver-
centered care for those who are terminally ill.
As referenced in our regulations at Sec. 418.22(b)(1), to be
eligible for Medicare hospice services, the patient's attending
physician (if any) and the hospice medical director must certify that
the individual is ``terminally ill,'' as defined in section
1861(dd)(3)(A) of the Act and our regulations at Sec. 418.3; that is,
the individual's prognosis is for a life expectancy of 6 months or less
if the terminal illness runs its normal course. The regulations at
Sec. 418.22(b)(3) require that the certification and recertification
forms include a brief narrative explanation of the clinical findings
that support a life expectancy of 6 months or less.
Under the Medicare hospice benefit, the election of hospice care is
a patient choice and once a terminally ill patient elects to receive
hospice care, a hospice interdisciplinary group is essential in the
seamless provision of services. These hospice services are provided
primarily in the individual's home. The hospice interdisciplinary group
works with the beneficiary, family, and caregivers to develop a
coordinated, comprehensive care plan; reduce unnecessary diagnostics or
ineffective therapies; and maintain ongoing communication with
individuals and their families about changes in their condition. The
beneficiary's care plan will shift over time to meet the changing needs
of the individual, family, and caregiver(s) as the individual
approaches the end of life.
If, in the judgment of the hospice interdisciplinary team, which
includes the hospice physician, the patient's symptoms cannot be
effectively managed at home, then the patient is
[[Page 20951]]
eligible for GIP, a more medically intense level of care. GIP must be
provided in a Medicare-certified hospice freestanding facility, skilled
nursing facility, or hospital. GIP is provided to ensure that any new
or worsening symptoms are intensively addressed so that the beneficiary
can return to his or her home and continue to receive routine home
care. Limited, short-term, intermittent, IRC is also available because
of the absence or need for relief of the family or other caregivers.
Additionally, an individual can receive CHC during a period of crisis
in which an individual requires continuous care to achieve palliation
or management of acute medical symptoms so that the individual can
remain at home. Continuous home care may be covered for as much as 24
hours a day, and these periods must be predominantly nursing care, in
accordance with our regulations at Sec. 418.204. A minimum of 8 hours
of nursing care, or nursing and aide care, must be furnished on a
particular day to qualify for the continuous home care rate (Sec.
418.302(e)(4)).
Hospices must comply with applicable civil rights laws,\1\
including section 504 of the Rehabilitation Act of 1973 and the
Americans with Disabilities Act, under which covered entities must take
appropriate steps to ensure effective communication with patients and
patient care representatives with disabilities, including the
provisions of auxiliary aids and services. Additionally, they must take
reasonable steps to ensure meaningful access for individuals with
limited English proficiency, consistent with Title VI of the Civil
Rights Act of 1964. Further information about these requirements may be
found at: https://www.hhs.gov/ocr/civilrights.
---------------------------------------------------------------------------
\1\ Hospices are also subject to additional Federal civil rights
laws, including the Age Discrimination Act, Section 1557 of the
Affordable Care Act, and conscience and religious freedom laws.
---------------------------------------------------------------------------
B. Services Covered by the Medicare Hospice Benefit
Coverage under the Medicare Hospice benefit requires that hospice
services must be reasonable and necessary for the palliation and
management of the terminal illness and related conditions. Section
1861(dd)(1) of the Act establishes the services that are to be rendered
by a Medicare-certified hospice program. These covered services
include: Nursing care; physical therapy; occupational therapy; speech-
language pathology therapy; medical social services; home health aide
services (here called hospice aide services); physician services;
homemaker services; medical supplies (including drugs and biologicals);
medical appliances; counseling services (including dietary counseling);
short-term inpatient care in a hospital, nursing facility, or hospice
inpatient facility (including both respite care and procedures
necessary for pain control and acute or chronic symptom management);
continuous home care during periods of crisis, and only as necessary to
maintain the terminally ill individual at home; and any other item or
service which is specified in the plan of care and for which payment
may otherwise be made under Medicare, in accordance with Title XVIII of
the Act.
Section 1814(a)(7)(B) of the Act requires that a written plan for
providing hospice care to a beneficiary who is a hospice patient be
established before care is provided by, or under arrangements made by,
that hospice program; and that the written plan be periodically
reviewed by the beneficiary's attending physician (if any), the hospice
medical director, and an interdisciplinary group (described in section
1861(dd)(2)(B) of the Act). The services offered under the Medicare
hospice benefit must be available to beneficiaries as needed, 24 hours
a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act).
Upon the implementation of the hospice benefit, the Congress also
expected hospices to continue to use volunteer services, though these
services are not reimbursed by Medicare (see section 1861(dd)(2)(E) of
the Act). As stated in the FY 1983 Hospice Wage Index and Rate Update
proposed rule (48 FR 38149), the hospice interdisciplinary group should
comprise paid hospice employees as well as hospice volunteers, and that
``the hospice benefit and the resulting Medicare reimbursement is not
intended to diminish the voluntary spirit of hospices.'' This
expectation supports the hospice philosophy of community based,
holistic, comprehensive, and compassionate end of life care.
C. Medicare Payment for Hospice Care
Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of
the Act, and our regulations in 42 CFR part 418, establish eligibility
requirements, payment standards and procedures; define covered
services; and delineate the conditions a hospice must meet to be
approved for participation in the Medicare program. Part 418, subpart
G, provides for a per diem payment in one of four prospectively-
determined rate categories of hospice care (RHC, CHC, IRC, and GIP),
based on each day a qualified Medicare beneficiary is under hospice
care (once the individual has elected). This per diem payment is to
include all of the hospice services and items needed to manage the
beneficiary's care, as required by section 1861(dd)(1) of the Act.
While payment is made to hospices is to cover all items, services,
and drugs for the palliation and management of the terminal illness and
related conditions, federal funds cannot be used for the prohibited
activities, even in the context of a per diem payment. Recent news
reports \2\ have brought to light the potential role hospices could
play in medical aid in dying (MAID) where such practices have been
legalized in certain states. We wish to remind hospices that The
Assisted Suicide Funding Restriction Act of 1997 (ASFRA) (Pub. L. 105-
12) prohibits the use of federal funds to provide or pay for any health
care item or service or health benefit coverage for the purpose of
causing, or assisting to cause, the death of any individual including
mercy killing, euthanasia, or assisted suicide. However, pursuant to
section 3(b)(4) of ASFRA, the prohibition does not apply to the
provision of an item or service for the purpose of alleviating pain or
discomfort, even if such use may increase the risk of death, so long as
the item or service is not furnished for the specific purpose of
causing or accelerating death.
---------------------------------------------------------------------------
\2\ Nelson, R., Should Medical Aid in Dying Be Part of Hospice
Care? Medscape Nurses. February 26, 2020. https://www.medscape.com/viewarticle/925769#vp_1.
---------------------------------------------------------------------------
1. Omnibus Budget Reconciliation Act of 1989
Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989
(Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided
changes in the methodology concerning updating the daily payment rates
based on the hospital market basket percentage increase applied to the
payment rates in effect during the previous federal FY.
2. Balanced Budget Act of 1997
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33) established that updates to the hospice payment rates beginning
FY 2002 and subsequent FYs be the hospital market basket percentage
increase for the FY.
3. FY 1998 Hospice Wage Index Final Rule
The FY 1998 Hospice Wage Index final rule (62 FR 42860),
implemented a
[[Page 20952]]
new methodology for calculating the hospice wage index and instituted
an annual Budget Neutrality Adjustment Factor (BNAF) so aggregate
Medicare payments to hospices would remain budget neutral to payments
calculated using the 1983 wage index.
4. FY 2010 Hospice Wage Index Final Rule
The FY 2010 Hospice Wage Index and Rate Update final rule (74 FR
39384) instituted an incremental 7-year phase-out of the BNAF beginning
in FY 2010 through FY 2016. The BNAF phase-out reduced the amount of
the BNAF increase applied to the hospice wage index value, but was not
a reduction in the hospice wage index value itself or in the hospice
payment rates.
5. The Affordable Care Act
Starting with FY 2013 (and in subsequent FYs), the market basket
percentage update under the hospice payment system referenced in
sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act is
subject to annual reductions related to changes in economy-wide
productivity, as specified in section 1814(i)(1)(C)(iv) of the Act.
In addition, sections 1814(i)(5)(A) through (C) of the Act, as
added by section 3132(a) of the Patient Protection and Affordable Care
Act (PPACA) (Pub. L. 111-148), required hospices to begin submitting
quality data, based on measures specified by the Secretary of the
Department of Health and Human Services (the Secretary), for FY 2014
and subsequent FYs. Beginning in FY 2014, hospices that fail to report
quality data have their market basket percentage increase reduced by 2
percentage points.
Section 1814(a)(7)(D)(i) of the Act, as added by section 3132(b)(2)
of the PPACA, required, effective January 1, 2011, that a hospice
physician or nurse practitioner have a face-to-face encounter with the
beneficiary to determine continued eligibility of the beneficiary's
hospice care prior to the 180th day recertification and each subsequent
recertification, and to attest that such visit took place. When
implementing this provision, we finalized in the FY 2011 Hospice Wage
Index final rule (75 FR 70435) that the 180th day recertification and
subsequent recertifications would correspond to the beneficiary's third
or subsequent benefit periods. Further, section 1814(i)(6) of the Act,
as added by section 3132(a)(1)(B) of the PPACA, authorized the
Secretary to collect additional data and information determined
appropriate to revise payments for hospice care and other purposes. The
types of data and information suggested in the PPACA could capture
accurate resource utilization, which could be collected on claims, cost
reports, and possibly other mechanisms, as the Secretary determined to
be appropriate. The data collected could be used to revise the
methodology for determining the payment rates for RHC and other
services included in hospice care, no earlier than October 1, 2013, as
described in section 1814(i)(6)(D) of the Act. In addition, we were
required to consult with hospice programs and the Medicare Payment
Advisory Commission (MedPAC) regarding additional data collection and
payment revision options.
6. FY 2012 Hospice Wage Index Final Rule
In the FY 2012 Hospice Wage Index final rule (76 FR 47308 through
47314) we announced that beginning in 2012, the hospice aggregate cap
would be calculated using the patient-by-patient proportional
methodology, within certain limits. We allowed existing hospices the
option of having their cap calculated through the original streamlined
methodology, also within certain limits. As of FY 2012, new hospices
have their cap determinations calculated using the patient-by-patient
proportional methodology. If a hospice's total Medicare payments for
the cap year exceed the hospice aggregate cap, then the hospice must
repay the excess back to Medicare.
7. IMPACT Act of 2014
The Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act) (Pub. L. 113-185) became law on October 6, 2014. Section
3(a) of the IMPACT Act mandated that all Medicare certified hospices be
surveyed every 3 years beginning April 6, 2015 and ending September 30,
2025. In addition, section 3(c) of the IMPACT Act requires medical
review of hospice cases involving beneficiaries receiving more than 180
days of care in select hospices that show a preponderance of such
patients; section 3(d) of the IMPACT Act contains a new provision
mandating that the cap amount for accounting years that end after
September 30, 2016, and before October 1, 2025 be updated by the
hospice payment update rather than using the consumer price index for
urban consumers (CPI-U) for medical care expenditures.
8. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule
The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR
50452) finalized a requirement that the Notice of Election (NOE) be
filed within 5 calendar days after the effective date of hospice
election. If the NOE is filed beyond this 5-day period, hospice
providers are liable for the services furnished during the days from
the effective date of hospice election to the date of NOE filing (79 FR
50474). Similar to the NOE, the claims processing system must be
notified of a beneficiary's discharge from hospice or hospice benefit
revocation within 5 calendar days after the effective date of the
discharge/revocation (unless the hospice has already filed a final
claim) through the submission of a final claim or a Notice of
Termination or Revocation (NOTR).
The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR
50479) also finalized a requirement that the election form include the
beneficiary's choice of attending physician and that the beneficiary
provide the hospice with a signed document when he or she chooses to
change attending physicians.
In addition, the FY 2015 Hospice Wage Index and Rate Update final
rule (79 FR 50496) provided background, eligibility criteria, survey
respondents, and implementation of the Hospice Experience of Care
Survey for informal caregivers. Hospice providers were required to
begin using this survey for hospice patients as of 2015.
Finally, the FY 2015 Hospice Wage Index and Rate Update final rule
required providers to complete their aggregate cap determination not
sooner than 3 months after the end of the cap year, and not later than
5 months after, and remit any overpayments. Those hospices that fail to
submit their aggregate cap determinations on a timely basis will have
their payments suspended until the determination is completed and
received by the Medicare contractor (79 FR 50503).
9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule
In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR
47172), we created two different payment rates for RHC that resulted in
a higher base payment rate for the first 60 days of hospice care and a
reduced base payment rate for subsequent days of hospice care. We also
created a SIA payment payable for services during the last 7 days of
the beneficiary's life, equal to the CHC hourly payment rate multiplied
by the amount of direct
[[Page 20953]]
patient care provided by a registered nurse (RN) or social worker that
occurs during the last 7 days (80 FR 47177).
In addition to the hospice payment reform changes discussed, the FY
2016 Hospice Wage Index and Rate Update final rule (80 FR 47186)
implemented changes mandated by the IMPACT Act, in which the cap amount
for accounting years that end after September 30, 2016 and before
October 1, 2025 would be updated by the hospice payment update
percentage rather than using the CPI-U. This was applied to the 2016
cap year, starting on November 1, 2015 and ending on October 31, 2016.
In addition, we finalized a provision to align the cap accounting year
for both the inpatient cap and the hospice aggregate cap with the
fiscal year for FY 2017 and thereafter. Finally, the FY 2016 Hospice
Wage Index and Rate Update final rule (80 FR 47144) clarified that
hospices would have to report all diagnoses of the beneficiary on the
hospice claim as a part of the ongoing data collection efforts for
possible future hospice payment refinements.
10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule
In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR
52160), we finalized several new policies and requirements related to
the HQRP. First, we codified our policy that if the National Quality
Forum (NQF) made non-substantive changes to specifications for HQRP
measures as part of the NQF's re-endorsement process, we would continue
to utilize the measure in its new endorsed status, without going
through new notice-and-comment rulemaking. We would continue to use
rulemaking to adopt substantive updates made by the NQF to the endorsed
measures we have adopted for the HQRP; determinations about what
constitutes a substantive versus non-substantive change would be made
on a measure-by-measure basis. Second, we finalized two new quality
measures for the HQRP for the FY 2019 payment determination and
subsequent years: Hospice Visits when Death is Imminent Measure Pair
and Hospice and Palliative Care Composite Process Measure-Comprehensive
Assessment at Admission (81 FR 52173). The data collection mechanism
for both of these measures is the HIS, and the measures were effective
April 1, 2017. Regarding the CAHPS[supreg] Hospice Survey, we finalized
a policy that hospices that receive their CMS Certification Number
(CCN) after January 1, 2017 for the FY 2019 Annual Payment Update (APU)
and January 1, 2018 for the FY 2020 APU will be exempted from the
Hospice Consumer Assessment of Healthcare Providers and Systems
(CAHPS[supreg]) requirements due to newness (81 FR 52182). The
exemption is determined by CMS and is for 1 year only.
11. FY 2020 Hospice Wage Index and Payment Rate Update Final Rule
In the FY 2020 Hospice Wage Index and Rate Update final rule (84 FR
38487), we rebased the payment rates for CHC and GIP and set those
rates equal to their average estimated FY 2019 costs per day. We also
rebased IRC per diem rates equal to the estimated FY 2019 average costs
per day, with a reduction of 5 percent to the FY 2019 average cost per
day to account for coinsurance. We finalized the FY 2020 proposal to
reduce the RHC payment rates by 2.72 percent to offset the increases to
CHC, IRC, and GIP payment rates to implement this policy in a budget-
neutral manner in accordance with section 1814(i)(6) of the Act (84 FR
38496). We also finalized a policy to use the current year's pre-floor,
pre-reclassified hospital inpatient wage index as the wage adjustment
to the labor portion of the hospice rates. Finally, in the FY 2020
Hospice Wage Index and Rate Update final rule (84 FR 38505) we
finalized modifications to the hospice election statement content
requirements at Sec. 418.24(b) by requiring hospices, upon request, to
furnish an election statement addendum effective beginning in FY 2021.
The addendum must list those items, services, and drugs the hospice has
determined to be unrelated to the terminal illness and related
conditions, increasing coverage transparency for beneficiaries under a
hospice election.
III. Provisions of the Proposed Rule
A. Proposed Hospice Wage Index Changes
1. Proposed Implementation of New Labor Market Delineations
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. However, OMB
occasionally issues minor updates and revisions to statistical areas in
the years between the decennial censuses. On April 10, 2018, OMB issued
OMB Bulletin No. 18-03 which superseded the August 15, 2017 OMB
Bulletin No. 17-01. On September 14, 2018, OMB issued OMB Bulletin No.
18-04, which superseded the April 10, 2018 OMB Bulletin No. 18-03.
These bulletins established revisions to the delineations of
Metropolitan Statistical Areas (MSA), Micropolitan Statistical Areas,
and Combines Statistical Areas, and guidance on uses of the delineation
in these areas. A copy of the September 14, 2018 bulletin is available
online at: https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf. (We note, on March 6, 2020 OMB issued Bulletin 20-
01 (available on the web at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf), and as discussed below was not
issued in time for development of this proposed rule.) This bulletin
states 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 September 14, 2018, are not as
sweeping as the changes made when we adopted the CBSA geographic
designations for FY 2006, the September 14, 2018 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. We believe it is
important for the hospice wage index to use the latest OMB delineations
available in order to maintain a more accurate and up-to-date payment
system that reflects the reality of population shifts and labor market
conditions. We further believe that using the most current OMB
delineations would increase the integrity of the hospice wage index by
creating a more accurate representation of geographic variation in wage
levels. We are proposing to implement the new OMB delineations as
described in the September 14, 2018 OMB Bulletin No. 18-04 for the
hospice wage index effective beginning in FY 2021. As noted above, the
March 6, 2020 OMB Bulletin 20-01 was not issued in time for development
of this proposed rule. While we do not believe that the minor updates
included in OMB Bulletin 20-01 would impact our proposed updates to the
CBSA-based labor market area delineations, if needed we would include
any updates from this bulletin in any changes that would be adopted in
the FY 2021 hospice final rule.
i. Micropolitan Statistical Areas
As discussed in the FY 2006 Hospice Wage Index proposed rule (70 FR
22397) and final rule (70 FR 45132), CMS considered how to use the
Micropolitan Statistical Area definitions
[[Page 20954]]
in the calculation of the wage index. OMB defines a ``Micropolitan
Statistical Area'' as a ``CBSA'' associated with at least one urban
cluster that has a population of at least 10,000, but less than 50,000
(75 FR 37252). We refer to these as Micropolitan Areas. After extensive
impact analysis, consistent with the treatment of these areas under the
IPPS as discussed in the FY 2005 IPPS final rule (69 FR 49029 through
49032), CMS determined the best course of action would be to treat
Micropolitan Areas as ``rural'' and include them in the calculation of
each state's Hospice rural wage index (see 70 FR 22397 and 70 FR
45132). Thus, the hospice statewide rural wage index is determined
using IPPS hospital data from hospitals located in non-Metropolitan
Statistical Areas (MSA).
Based upon the 2010 Decennial Census data, a number of urban
counties have switched status and have joined or became Micropolitan
Areas, and some counties that once were part of a Micropolitan Area,
have become urban. Overall, there are fewer Micropolitan Areas (542)
under the new OMB delineations based on the 2010 Census than existed
under the latest data from the 2000 Census (581). We believe that the
best course of action would be to continue the policy established in
the FY 2006 Hospice Wage Index final rule and include Micropolitan
Areas in each state's rural wage index. These areas continue to be
defined as having relatively small urban cores (populations of 10,000
to 49,999). Therefore, in conjunction with our proposal to implement
the new OMB labor market delineations beginning in FY 2021 and
consistent with the treatment of Micropolitan Areas under the IPPS, we
are proposing to continue to treat Micropolitan Areas as ``rural'' and
to include Micropolitan Areas in the calculation of each state's rural
wage index.
ii. Urban Counties Becoming Rural
If we adopt the new OMB delineations (based upon the 2010 decennial
Census data), a total of 34 counties (and county equivalents) that are
currently considered urban would be considered rural beginning in FY
2021. Table 1 below lists the 34 counties that would change to rural
status if we finalize our proposal to implement the new OMB
delineations.
Table 1--Counties That Would Change to Rural Status
----------------------------------------------------------------------------------------------------------------
County name State CBSA CBSA name
----------------------------------------------------------------------------------------------------------------
BAKER................................... GA.................. 10500 Albany, GA.
NEWTON.................................. TX.................. 13140 Beaumont-Port Arthur, TX.
GOLDEN VALLEY........................... MT.................. 13740 Billings, MT.
WALKER.................................. AL.................. 13820 Birmingham-Hoover, AL.
SIOUX................................... ND.................. 13900 Bismarck, ND.
FLOYD................................... VA.................. 13980 Blacksburg-Christiansburg-
Radford, VA.
DE WITT................................. IL.................. 14010 Bloomington, IL.
FORD.................................... IL.................. 16580 Champaign-Urbana, IL.
BUCKINGHAM.............................. VA.................. 16820 Charlottesville, VA.
ARANSAS................................. TX.................. 18580 Corpus Christi, TX.
MC DONALD............................... MO.................. 22220 Fayetteville-Springdale-Rogers,
AR-MO.
LE FLORE................................ OK.................. 22900 Fort Smith, AR-OK.
WELLS................................... IN.................. 23060 Fort Wayne, IN.
HOOD.................................... TX.................. 23104 Fort Worth-Arlington, TX.
SOMERVELL............................... TX.................. 23104 Fort Worth-Arlington, TX.
HAMILTON................................ NE.................. 24260 Grand Island, NE.
BARRY................................... MI.................. 24340 Grand Rapids-Wyoming, MI.
KALAWAO................................. HI.................. 27980 Kahului-Wailuku-Lahaina, HI.
VAN BUREN............................... MI.................. 28020 Kalamazoo-Portage, MI.
SCOTT................................... IN.................. 31140 Louisville/Jefferson County, KY-
IN.
TRIMBLE................................. KY.................. 31140 Louisville/Jefferson County, KY-
IN.
BENTON.................................. MS.................. 32820 Memphis, TN-MS-AR.
SIBLEY.................................. MN.................. 33460 Minneapolis--St. Paul--
Bloomington, MN-WI.
HICKMAN................................. TN.................. 34980 Nashville-Davidson-Murfreesboro-
Franklin, TN.
GULF.................................... FL.................. 37460 Panama City, FL.
CUSTER.................................. SD.................. 39660 Rapid City, SD.
CAROLINE................................ VA.................. 40060 Richmond, VA.
WEBSTER................................. LA.................. 43340 Shreveport-Bossier City, LA.
PLYMOUTH................................ IA.................. 43580 Sioux City, IA-NE-SD.
UNION................................... SC.................. 43900 Spartanburg, SC.
PEND OREILLE............................ WA.................. 44060 Spokane-Spokane Valley, WA.
COLUMBIA................................ WA.................. 47460 Walla Walla, WA.
PULASKI................................. GA.................. 47580 Warner Robins, GA.
KINGMAN................................. KS.................. 48620 Wichita, KS.
----------------------------------------------------------------------------------------------------------------
iii. Rural Counties Becoming Urban
If we finalize our proposal to implement the new OMB delineations
(based upon the 2010 decennial Census data), a total of 47 counties
(and county equivalents) that are currently designated rural would be
considered urban beginning in FY 2021. Table 2 below lists the 47
counties that would change to urban status.
[[Page 20955]]
Table 2--Counties That Would Change to Urban Status
----------------------------------------------------------------------------------------------------------------
County name State CBSA CBSA name
----------------------------------------------------------------------------------------------------------------
GREENE.................................. AL.................. 46220 Tuscaloosa, AL.
WASHINGTON.............................. AL.................. 33660 Mobile, AL.
FRANKLIN................................ AR.................. 22900 Fort Smith, AR-OK.
LEVY.................................... FL.................. 23540 Gainesville, FL.
STEWART................................. GA.................. 17980 Columbus, GA-AL.
TALBOT.................................. GA.................. 17980 Columbus, GA-AL.
POWER................................... ID.................. 38540 Pocatello, ID.
FULTON.................................. IL.................. 37900 Peoria, IL.
JOHNSON................................. IL.................. 16060 Carbondale-Marion, IL.
FRANKLIN................................ IN.................. 17140 Cincinnati, OH-KY-IN.
PARKE................................... IN.................. 45460 Terre Haute, IN.
WARREN.................................. IN.................. 29200 Lafayette-West Lafayette, IN.
BOONE................................... IA.................. 11180 Ames, IA.
JASPER.................................. IA.................. 19780 Des Moines-West Des Moines, IA.
GEARY................................... KS.................. 31740 Manhattan, KS.
CARTER.................................. KY.................. 26580 Huntington-Ashland, WV-KY-OH.
ASSUMPTION.............................. LA.................. 12940 Baton Rouge, LA.
MOREHOUSE............................... LA.................. 33740 Monroe, LA.
FRANKLIN................................ MA.................. 44140 Springfield, MA.
IONIA................................... MI.................. 24340 Grand Rapids-Kentwood, MI.
SHIAWASSEE.............................. MI.................. 29620 Lansing-East Lansing, MI.
LAKE.................................... MN.................. 20260 Duluth, MN-WI.
COVINGTON............................... MS.................. 25620 Hattiesburg, MS.
HOLMES.................................. MS.................. 27140 Jackson, MS.
STONE................................... MS.................. 25060 Gulfport-Biloxi, MS.
COOPER.................................. MO.................. 17860 Columbia, MO.
HOWARD.................................. MO.................. 17860 Columbia, MO.
STILLWATER.............................. MT.................. 13740 Billings, MT.
ANSON................................... NC.................. 16740 Charlotte-Concord-Gastonia, NC-
SC.
CAMDEN.................................. NC.................. 47260 Virginia Beach-Norfolk-Newport
News, VA-NC.
GRANVILLE............................... NC.................. 20500 Durham-Chapel Hill, NC.
HARNETT................................. NC.................. 22180 Fayetteville, NC.
OTTAWA.................................. OH.................. 45780 Toledo, OH.
CLARENDON............................... SC.................. 44940 Sumter, SC.
GIBSON.................................. TN.................. 27180 Jackson, TN.
STEWART................................. TN.................. 17300 Clarksville, TN-KY.
HARRISON................................ TX.................. 30980 Longview, TX.
STERLING................................ TX.................. 41660 San Angelo, TX.
KING AND QUEEN.......................... VA.................. 40060 Richmond, VA.
MADISON................................. VA.................. 47894 Washington-Arlington-Alexandria,
DC-VA-MD-WV.
SOUTHAMPTON............................. VA.................. 47260 Virginia Beach-Norfolk-Newport
News, VA-NC.
FRANKLIN CITY........................... VA.................. 47260 Virginia Beach-Norfolk-Newport
News, VA-NC.
JACKSON................................. WV.................. 16620 Charleston, WV.
MORGAN.................................. WV.................. 25180 Hagerstown-Martinsburg, MD-WV.
LINCOLN................................. WI.................. 48140 Wausau-Weston, WI.
ADJUNTAS................................ PR.................. 38660 Ponce, PR.
LAS MARIAS.............................. PR.................. 32420 Mayag[uuml]ez, PR.
----------------------------------------------------------------------------------------------------------------
iv. Urban Counties Moving to a Different Urban CBSA
In addition to rural counties becoming urban and urban counties
becoming rural, several urban counties would shift from one urban CBSA
to another urban CBSA under our proposal to adopt the new OMB
delineations. In other cases, applying the new OMB delineations would
involve a change only in CBSA name or number, while the CBSA continues
to encompass the same constituent counties. For example, CBSA 19380
(Dayton, OH) would experience both a change to its number and its name,
and become CBSA 19430 (Dayton-Kettering, OH), while all of its three
constituent counties would remain the same. In other cases, only the
name of the CBSA would be modified, and none of the currently assigned
counties would be reassigned to a different urban CBSA. Table 3 below
lists CBSAs where we are proposing to change either the name or CBSA
number only.
Table 3--Counties That Would Change Name or CBSA Number
----------------------------------------------------------------------------------------------------------------
Current CBSA
Proposed CBSA code Proposed CBSA title code Current CBSA title
----------------------------------------------------------------------------------------------------------------
10540............................... Albany-Lebanon, OR.......... 10540 Albany, OR.
11500............................... Anniston-Oxford, AL......... 11500 Anniston-Oxford-
Jacksonville, AL.
12060............................... Atlanta-Sandy Springs- 12060 Atlanta-Sandy Springs-
Alpharetta, GA. Roswell, GA.
12420............................... Austin-Round Rock- 12420 Austin-Round Rock, TX.
Georgetown, TX.
13460............................... Bend, OR.................... 13460 Bend-Redmond, OR.
13980............................... Blacksburg-Christiansburg, 13980 Blacksburg-Christiansburg-
VA. Radford, VA.
[[Page 20956]]
14740............................... Bremerton-Silverdale-Port 14740 Bremerton-Silverdale, WA.
Orchard, WA.
15380............................... Buffalo-Cheektowaga, NY..... 15380 Buffalo-Cheektowaga-Niagara
Falls, NY.
19430............................... Dayton-Kettering, OH........ 19380 Dayton, OH.
24340............................... Grand Rapids-Kentwood, MI... 24340 Grand Rapids-Wyoming, MI.
24860............................... Greenville-Anderson, SC..... 24860 Greenville-Anderson-Mauldin,
SC.
25060............................... Gulfport-Biloxi, MS......... 25060 Gulfport-Biloxi-Pascagoula,
MS.
25540............................... Hartford-East Hartford- 25540 Hartford-West Hartford-East
Middletown, CT. Hartford, CT.
25940............................... Hilton Head Island-Bluffton, 25940 Hilton Head Island-Bluffton-
SC. Beaufort, SC.
28700............................... Kingsport-Bristol, TN-VA.... 28700 Kingsport-Bristol-Bristol,
TN-VA.
31860............................... Mankato, MN................. 31860 Mankato-North Mankato, MN.
33340............................... Milwaukee-Waukesha, WI...... 33340 Milwaukee-Waukesha-West
Allis, WI.
34940............................... Naples-Marco Island, FL..... 34940 Naples-Immokalee-Marco
Island, FL.
35660............................... Niles, MI................... 35660 Niles-Benton Harbor, MI.
36084............................... Oakland-Berkeley-Livermore, 36084 Oakland-Hayward-Berkeley,
CA. CA.
36500............................... Olympia-Lacey-Tumwater, WA.. 36500 Olympia-Tumwater, WA.
38060............................... Phoenix-Mesa-Chandler, AZ... 38060 Phoenix-Mesa-Scottsdale, AZ.
39150............................... Prescott Valley-Prescott, AZ 39140 Prescott, AZ.
23224............................... Frederick-Gaithersburg- 43524 Silver Spring-Frederick-
Rockville, MD. Rockville, MD.
44420............................... Staunton, VA................ 44420 Staunton-Waynesboro, VA.
44700............................... Stockton, CA................ 44700 Stockton-Lodi, CA.
45940............................... Trenton-Princeton, NJ....... 45940 Trenton, NJ.
46700............................... Vallejo, CA................. 46700 Vallejo-Fairfield, CA.
47300............................... Visalia, CA................. 47300 Visalia-Porterville, CA.
48140............................... Wausau-Weston, WI........... 48140 Wausau, WI.
48424............................... West Palm Beach-Boca Raton- 48424 West Palm Beach-Boca Raton-
Boynton Beach, FL. Delray Beach, FL.
----------------------------------------------------------------------------------------------------------------
We are not discussing these proposed changes in this section
because, in our view, they are inconsequential changes with respect to
the hospice wage index. However, in other cases, if we adopt the new
OMB delineations, counties would shift between existing and new CBSAs,
changing the constituent makeup of the CBSAs. In another type of
change, some CBSAs have counties that would split off to become part of
or to form entirely new labor market areas. Finally, in some cases, a
CBSA would lose counties to another existing CBSA if we adopt the new
OMB delineations. Table 4 below lists the urban counties that would
move from one urban CBSA to a newly or modified CBSA if we adopt the
new OMB delineations.
Table 4--Counties That Would Change to a Different CBSA
------------------------------------------------------------------------
Previous CBSA New CBSA County State
------------------------------------------------------------------------
16974........................ 16984 COOK........... IL.
16974........................ 16984 DU PAGE........ IL.
16974........................ 16984 GRUNDY......... IL.
16974........................ 20994 KENDALL........ IL.
16974........................ 16984 MC HENRY....... IL.
16974........................ 16984 WILL........... IL.
20524........................ 39100 DUTCHESS....... NY.
20524........................ 35614 PUTNAM......... NY.
26580........................ 16620 LINCOLN........ WV.
28940........................ 34100 GRAINGER....... TN.
35084........................ 35154 SOMERSET....... NJ.
35614........................ 35154 MIDDLESEX...... NJ.
35614........................ 35154 MONMOUTH....... NJ.
35614........................ 35154 OCEAN.......... NJ.
35614........................ 39100 ORANGE......... NY.
38660........................ 49500 GUANICA........ PR.
38660........................ 49500 GUAYANILLA..... PR.
38660........................ 49500 PENUELAS....... PR.
38660........................ 49500 YAUCO.......... PR.
------------------------------------------------------------------------
2. Proposed Transition Period
As discussed above, overall, we believe that our proposal to adopt
the revised OMB delineations for FY 2021 would result in hospice wage
index values being more representative of the actual costs of labor in
a given area. However, we also recognize that some hospices would
experience decreases in their area wage index values as a result of our
proposal. We also realize that many hospices would have higher area
wage index values under our proposal.
To mitigate the potential impacts of proposed policies on hospices,
we have in the past provided for transition periods when adopting
changes that have significant payment implications, particularly large
negative impacts. For example, we have proposed and finalized budget
neutral transition policies to help mitigate negative
[[Page 20957]]
impacts on hospices following the adoption of the new CBSA delineations
based on the 2010 decennial census data in the FY 2016 hospice final
rule (80 FR 47142). Specifically, we implemented a 1-year 50/50 blended
wage to the new OMB delineations. We applied a blended wage index for
one year (FY 2016) for all geographic areas that 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 was calculated equal to 50 percent of
the FY 2016 wage index using the old labor market area delineation and
50 percent of the FY 2016 wage index using the new labor market area
delineation, which resulted in an average of the two values. While we
believed that using the new OMB delineations would create a more
accurate payment adjustment for differences in area wage levels, we
also recognized that adopting such changes may cause some short-term
instability in hospice payments, in particular for hospices that would
be negatively impacted by the proposed adoption of the updates to the
OMB delineations. Therefore, we are proposing a transition policy to
help mitigate any significant negative impacts that hospices may
experience due to our proposal to adopt the revised OMB delineations.
Specifically, for FY 2021 as a transition, we are proposing to apply a
5 percent cap on any decrease in a geographic area's wage index value
from the wage index value from the prior FY. This transition would
allow the effects of our proposed adoption of the revised CBSA
delineations to be phased in over 2 years, where the estimated
reduction in a geographic area's wage index would be capped at 5
percent in FY 2021 (that is, no cap would be applied to the reduction
in the wage index for the second year (FY 2022)). We believe a 5
percent cap on the overall decrease in a geographic area's wage index
value would be appropriate for FY 2021, as it provides predictability
in payment levels from FY 2020 to the upcoming FY 2021 and additional
transparency because it is administratively simpler than our prior 1-
year 50/50 blended wage index approach. We believe 5 percent is a
reasonable level for the cap because it would effectively mitigate any
significant decreases in a geographic area's wage index value for FY
2021. Because we believe that using the new OMB delineations would
create a more accurate payment adjustment for differences in area wage
levels we are proposing to include a cap on the overall decrease in a
geographic area's wage index value.
Overall, the impact between the FY 2021 wage index using the old
OMB delineations and the proposed FY 2021 wage index using the new OMB
delineations would be 0.0 percent due to the wage index standardization
factor, which ensures that wage index updates and revisions are
implemented in a budget-neutral manner. We invite comments on our
proposed transition methodology.
The proposed wage index applicable to FY 2021 can be found in on
the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice. The proposed hospice wage index for FY 2021
would be effective October 1, 2020 through September 30, 2021.
The wage index file also provides a crosswalk between the FY 2021
wage index using the current OMB delineations and the FY 2021 wage
index using the proposed revised OMB delineations that would be in
effect in FY 2021 if these proposed changes are finalized. This file
shows each state and county and its corresponding proposed wage index
along with the previous CBSA number, the new CBSA number or alternate
identification number, and the new CBSA name.
B. Proposed Routine FY 2021 Hospice Wage Index and Rate Update
1. Proposed FY 2021 Hospice Wage Index
The hospice wage index is used to adjust payment rates for hospice
agencies under the Medicare program to reflect local differences in
area wage levels, based on the location where services are furnished.
The hospice wage index utilizes the wage adjustment factors used by the
Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital
wage adjustments. Our regulations at Sec. 418.306(c) require each
labor market to be established using the most current hospital wage
data available, including any changes made by OMB to the Metropolitan
Statistical Areas (MSAs) definitions.
In the FY 2020 Hospice Wage Index final rule (84 FR 38484), we
finalized the proposal to use the current FY's hospital wage index data
to calculate the hospice wage index values. In section III.A above we
discuss our proposal to use the pre-floor, pre-reclassified hospital
wage index data to calculate the hospice wage index values. For FY
2021, the proposed hospice wage index would be based on the FY 2021
hospital pre-floor, pre-reclassified wage index with a 5 percent cap on
wage index decreases. This means that the hospital wage data used for
the hospice wage index would reflect the new OMB delineations but would
not take into account any geographic reclassification of hospitals
including those in accordance with section 1886(d)(8)(B) or 1886(d)(10)
of the Act. The appropriate wage index value is applied to the labor
portion of the hospice payment rate based on the geographic area in
which the beneficiary resides when receiving RHC or CHC. The
appropriate wage index value is applied to the labor portion of the
payment rate based on the geographic location of the facility for
beneficiaries receiving GIP or IRC.
In the FY 2006 Hospice Wage Index final rule (70 FR 45135), we
adopted the policy that, for urban labor markets without a hospital
from which hospital wage index data could be derived, all of the Core-
Based Statistical Areas (CBSAs) within the state would be used to
calculate a statewide urban average pre-floor, pre-reclassified
hospital wage index value to use as a reasonable proxy for these areas.
For FY 2021, the only CBSA without a hospital from which hospital wage
data can be derived is 25980, Hinesville-Fort Stewart, Georgia. The FY
2021 adjusted wage index value for Hinesville-Fort Stewart, Georgia is
0.8539.
There exist some geographic areas where there were no hospitals,
and thus, no hospital wage data on which to base the calculation of the
hospice wage index. In the FY 2008 Hospice Wage Index final rule (72 FR
50217 through 50218), we implemented a methodology to update the
hospice wage index for rural areas without hospital wage data. In cases
where there was a rural area without rural hospital wage data, we use
the average pre-floor, pre-reclassified hospital wage index data from
all contiguous CBSAs, to represent a reasonable proxy for the rural
area. The term ``contiguous'' means sharing a border (72 FR 50217).
Currently, the only rural area without a hospital from which hospital
wage data could be derived is Puerto Rico. However, 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 FY 2021, we propose to continue to use the
most recent pre-floor, pre-reclassified hospital wage index value
[[Page 20958]]
available for Puerto Rico, which is 0.4047, subsequently adjusted by
the hospice floor.
As described in the August 8, 1997 Hospice Wage Index final rule
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index
is used as the raw wage index for the hospice benefit. These raw wage
index values are subject to application of the hospice floor to compute
the hospice wage index used to determine payments to hospices. As
discussed above the adjusted pre-floor, pre-reclassified hospital wage
index values below 0.8 will be further adjusted by a 15 percent
increase subject to a maximum wage index value of 0.8. For example, if
County A has a pre-floor, pre-reclassified hospital wage index value of
0.3994, we would multiply 0.3994 by 1.15, which equals 0.4593. Since
0.4593 is not greater than 0.8, then County A's hospice wage index
would be 0.4593. In another example, if County B has a pre-floor, pre-
reclassified hospital wage index value of 0.7440, we would multiply
0.7440 by 1.15 which equals 0.8556. Because 0.8556 is greater than 0.8,
County B's hospice wage index would be 0.8.
The proposed hospice wage index applicable for FY 2021 (October 1,
2020 through September 30, 2021) is available on our website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.
2. Proposed FY 2021 Hospice Payment Update Percentage
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish
updates to hospice rates for FYs 1998 through 2002. Hospice rates were
to be updated by a factor equal to the inpatient hospital market basket
percentage increase set out under section 1886(b)(3)(B)(iii) of the
Act, minus 1 percentage point. Payment rates for FYs since 2002 have
been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act,
which states that the update to the payment rates for subsequent FYs
must be the inpatient market basket percentage increase for that FY.
Section 3401(g) of the Affordable Care Act mandated that, starting
with FY 2013 (and in subsequent FYs), the hospice payment update
percentage would be annually reduced by changes in economy-wide
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act.
The statute defines the productivity adjustment to be equal to the 10-
year moving average of changes in annual economy-wide private nonfarm
business multifactor productivity (MFP).
The proposed hospice payment update percentage for FY 2021 is based
on the current estimate of the inpatient hospital market basket update
of 3.0 percent (based on IHS Global Inc.'s fourth-quarter 2019 forecast
with historical data through the third quarter 2019). Due to the
requirements at sections 1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of
the Act, the inpatient hospital market basket update for FY 2021 of 3.0
percent must be reduced by a MFP adjustment as mandated by Affordable
Care Act (currently estimated to be 0.4 percentage point for FY 2021).
In effect, the proposed hospice payment update percentage for FY 2021
would be 2.6 percent. If more recent data becomes available after the
publication of this proposed rule and before the publication of the
final rule (for example, more recent estimates of the inpatient
hospital market basket update and MFP adjustment), we would use such
data to determine the hospice payment update percentage for FY 2021 in
the final rule.
Currently, the labor portion of the hospice payment rates is as
follows: For RHC, 68.71 percent; for CHC, 68.71 percent; for General
Inpatient Care, 64.01 percent; and for Respite Care, 54.13 percent. The
non-labor portion is equal to 100 percent minus the labor portion for
each level of care. Therefore, the non-labor portion of the payment
rates is as follows: For RHC, 31.29 percent; for CHC, 31.29 percent;
for General Inpatient Care, 35.99 percent; and for Respite Care, 45.87
percent.
3. Proposed FY 2021 Hospice Payment Rates
There are four payment categories that are distinguished by the
location and intensity of the services provided. The base payments are
adjusted for geographic differences in wages by multiplying the labor
share, which varies by category, of each base rate by the applicable
hospice wage index. A hospice is paid the RHC rate for each day the
beneficiary is enrolled in hospice, unless the hospice provides CHC,
IRC, or GIP. CHC is provided during a period of patient crisis to
maintain the patient at home; IRC is short-term care to allow the usual
caregiver to rest and be relieved from caregiving; and GIP is to treat
symptoms that cannot be managed in another setting.
As discussed in the FY 2016 Hospice Wage Index and Rate Update
final rule (80 FR 47172), we implemented two different RHC payment
rates, one RHC rate for the first 60 days and a second RHC rate for
days 61 and beyond. In addition, in that final rule, we implemented a
SIA payment for RHC when direct patient care is provided by a RN or
social worker during the last 7 days of the beneficiary's life. The SIA
payment is equal to the CHC hourly rate multiplied by the hours of
nursing or social work provided (up to 4 hours total) that occurred on
the day of service, if certain criteria are met. In order to maintain
budget neutrality, as required under section 1814(i)(6)(D)(ii) of the
Act, the new RHC rates were adjusted by a service intensity add-on
budget neutrality factor (SBNF). The SBNF is used to reduce the overall
RHC rate in order to ensure that SIA payment are budget-neutral. At the
beginning of every fiscal year, SIA utilization is compared to the
prior year in order calculate a budget neutrality adjustment.
As shown in Table 5, for FY 2016 through FY 2020, there have been
very minor SBNF adjustments suggesting that the utilization of the SIA
from one year to the next remains relatively constant. Because the SBNF
remains stable, we are proposing to remove the factor to simplify the
RHC payment rate updates. Therefore, the RHC payment rates would
typically only be updated by the wage index standardization factor and
the hospice payment update percentage. We invite comments on this
proposal.
Table 5--FY 2016-FY 2020 SIA Budget Neutrality Factors
------------------------------------------------------------------------
Days 1-60 Days 61+
------------------------------------------------------------------------
FY 2016....................................... 0.9806 0.9957
FY 2017....................................... 1.0000 0.9999
FY 2018....................................... 1.0017 1.0005
FY 2019....................................... 0.9991 0.9998
FY 2020....................................... 0.9924 0.9982
------------------------------------------------------------------------
In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR
52156), we initiated a policy of applying a wage index standardization
factor to hospice payments in order to eliminate the aggregate effect
of annual variations in hospital wage data. In order to calculate the
wage index standardization factor, we simulate total payments using the
FY 2020 hospice wage index and FY 2020 payment rates and compare it to
our simulation of total payments using the FY 2021 wage index with a 5
percent cap on wage index decreases and FY 2020 payment rates. By
dividing payments for each level of care (RHC days 1 through 60, RHC
days 61+, CHC, IRC, and GIP) using the FY 2020 wage index and payment
rates by payments for each level of care using the FY 2021 wage index
and payment
[[Page 20959]]
rates, we obtain a wage index standardization factor for each level of
care. The wage index standardization factors for each level of care are
shown in the tables below.
The proposed FY 2021 RHC rates shown in Table 6 will only be
updated by the wage index standardization factor and the hospice
payment update percentage as mentioned previously. The proposed FY 2021
payment rates for CHC, IRC, and GIP are shown in Table 7.
Table 6--Proposed FY 2021 Hospice RHC Payment Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wage index Proposed FY 2021
Code Description FY 2020 standardization hospice payment Proposed FY 2021
payment rates factor update payment rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
651.......................................... Routine Home Care (days 1-60)... $194.50 x 0.9989 x 1.026 $199.34
651.......................................... Routine Home Care (days 61+).... 153.72 x 0.9990 x 1.026 157.56
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 7--Proposed FY 2021 Hospice CHC, IRC, and GIP Payment Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Wage index
Code Description FY 2020 standardization FY 2021 hospice FY 2021 payment
payment rates factor payment update rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
652.......................................... Continuous Home Care Full Rate = $1,395.63 x 0.9991 x 1.026 * $1,430.63
24 hours of care.
655.......................................... Inpatient Respite Care.......... 450.10 x 0.9993 x 1.026 461.48
656.......................................... General Inpatient Care.......... 1,021.25 x 0.9988 x 1.026 1,046.55
--------------------------------------------------------------------------------------------------------------------------------------------------------
* ($59.61 per hour.)
Sections 1814(i)(5)(A) through (C) of the Act require that hospices
submit quality data, based on measures to be specified by the
Secretary. In the FY 2012 Hospice Wage Index final rule (76 FR 47320
through 47324), we implemented a HQRP as required by section 3004 of
the Affordable Care Act. Hospices were required to begin collecting
quality data in October 2012, and submit that quality data in 2013.
Section 1814(i)(5)(A)(i) of the Act requires that beginning with FY
2014 and each subsequent FY, the Secretary shall reduce the market
basket update by 2 percentage points for any hospice that does not
comply with the quality data submission requirements with respect to
that FY. The proposed FY 2021 rates for hospices that do not submit the
required quality data would be updated by the proposed FY 2021 hospice
payment update percentage of 2.6 percent minus 2 percentage points.
These rates are shown in Tables 8 and 9.
Table 8--Proposed FY 2021 Hospice RHC Payment Rates for Hospices That DO NOT Submit the Required Quality Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed FY 2021
hospice payment
FY 2020 Wage index update of 2.6% Proposed FY 2021
Code Description payment rates standardization minus 2 payment rates
factor percentage points
= +0.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------
651.......................................... Routine Home Care (days 1-60)... $194.50 x 0.9989 x 1.006 $195.45
651.......................................... Routine Home Care (days 61+).... 153.72 x 0.9990 x 1.006 154.49
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 9--Proposed FY 2021 Hospice CHC, IRC, and GIP Payment Rates for Hospices That DO NOT Submit the Required Quality Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed FY 2021
hospice payment
FY 2020 Wage index update of 2.6% Proposed FY 2021
Code Description payment rates standardization minus 2 payment rates
factor percentage points
= +0.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------
652.......................................... Continuous Home Care Full Rate= $1,395.63 x 0.9991 x 1.006 * $1,402.74
24 hours of care.
655.......................................... Inpatient Respite Care.......... 450.10 x 0.9993 x 1.006 452.48
656.......................................... General Inpatient Care.......... 1,021.25 x 0.9988 x 1.006 1,026.14
--------------------------------------------------------------------------------------------------------------------------------------------------------
* ($58.45 per hour.)
[[Page 20960]]
4. Proposed Hospice Cap Amount for FY 2021
As discussed in the FY 2016 Hospice Wage Index and Rate Update
final rule (80 FR 47183), we implemented changes mandated by the IMPACT
Act of 2014 (Pub. L. 113-185). Specifically, for accounting years that
end after September 30, 2016 and before October 1, 2025, the hospice
cap is updated by the hospice payment update percentage rather than
using the CPI-U. The proposed hospice cap amount for the FY 2021 cap
year will be $30,743.86, which is equal to the FY 2020 cap amount
($29,964.78) updated by the proposed FY 2021 hospice payment update
percentage of 2.6 percent.
C. Election Statement Content Modifications and Addendum To Provide
Greater Coverage Transparency and Safeguard Patient Rights
In the FY 2020 Hospice final rule (84 FR 38484), we finalized
modifications to the hospice election statement content requirements at
Sec. 418.24(b) to increase coverage transparency for patients under a
hospice election. In addition to the existing election statement
content requirements at Sec. 418.24(b), we finalized that hospices
also would be required to include the following on the election
statement:
Information about the holistic, comprehensive nature of
the Medicare hospice benefit.
A statement that, although it would be rare, there could
be some necessary items, drugs, or services that will not be covered by
the hospice because the hospice has determined that these items, drugs,
or services are to treat a condition that is unrelated to the terminal
illness and related conditions.
Information about beneficiary cost-sharing for hospice
services.
Notification of the beneficiary's (or representative's)
right to request an election statement addendum that includes a written
list and a rationale for the conditions, items, drugs, or services that
the hospice has determined to be unrelated to the terminal illness and
related conditions and that immediate advocacy is available through the
Beneficiary and Family Centered Care Quality Improvement Organization
(BFCC-QIO) if the beneficiary (or representative) disagrees with the
hospice's determination.
Also in the CY 2020 hospice final rule, we finalized the
requirements as set forth at Sec. 418.24(c) for the hospice election
statement addendum titled, ``Patient Notification of Hospice Non-
Covered Items, Services, and Drugs'' and would include the following
content requirements:
1. Name of the hospice;
2. Beneficiary's name and hospice medical record identifier;
3. Identification of the beneficiary's terminal illness and related
conditions;
4. A list of the beneficiary's current diagnoses/conditions present
on hospice admission (or upon plan of care update, as applicable) and
the associated items, services, and drugs, not covered by the hospice
because they have been determined by the hospice to be unrelated to the
terminal illness and related conditions;
5. A written clinical explanation, in language the beneficiary and
his or her representative can understand, as to why the identified
conditions, items, services, and drugs are considered unrelated to the
terminal illness and related conditions and not needed for pain or
symptom management. This clinical explanation would be accompanied by a
general statement that the decision as to whether or not conditions,
items, services, and drugs is related is made for each patient and that
the beneficiary should share this clinical explanation with other
health care providers from which they seek services unrelated to their
terminal illness and related conditions;
6. References to any relevant clinical practice, policy, or
coverage guidelines.
7. Information on:
a. The purpose of Addendum; and
b. the patient's right to immediate advocacy.
8. Name and signature of Medicare hospice beneficiary (or
representative) and date signed, along with a statement that signing
this addendum (or its updates) is only acknowledgement of receipt of
the addendum (or its updates) and not necessarily the beneficiary's
agreement with the hospice's determinations.
We finalized a policy requiring that the election statement
modifications apply to all hospice elections. However, the addendum
only would be furnished to beneficiaries, their representatives, non-
hospice providers, or Medicare contractors who requested such
information. Additionally, we finalized a policy that if the
beneficiary (or representative) requested an addendum at the time of
hospice election, the hospice would have 5 days from the start of
hospice care to furnish this information in writing. Furthermore, if
the beneficiary requested the election statement at the time of hospice
election, but died within 5 days, the hospice would not be required to
furnish the addendum as the requirement would be deemed to have been
met in this circumstance. If the addendum was requested during the
course of hospice care (that is, after the date of the hospice
election), we finalized a policy that the hospice would have 72 hours
from the date of the request to provide the written addendum.
The election statement modifications and the election statement
addendum requirements will be effective for hospice elections beginning
on and after October 1, 2020 (that is, FY 2021). While we finalized the
content requirements for the election statement addendum, we did not
finalize a specific form, and hospices will develop and design the
addendum to meet their needs, similar to how hospices develop their own
hospice election statement.
Additionally, we finalized a policy that the signed addendum (and
any signed updates) would be a new condition for payment. However, this
does not mean in order to meet this condition for payment that the
beneficiary (or representative), or non-hospice provider would have to
agree with the hospice's determination. For purposes of this condition
for payment, we finalized the policy that the signed addendum was only
an acknowledgement of the beneficiary's (or representative's) receipt
of the addendum (or its updates) and this payment requirement would be
met if there was a signed addendum (and any signed updates) in the
requesting beneficiary's medical record with the hospice. This addendum
would not be required to be submitted routinely with each hospice
claim. Likewise, the hospice beneficiary (or representative) would not
have to separately consent to the release of this information to non-
hospice providers furnishing services for unrelated conditions, because
the Health Insurance Portability and Accountability Act of 1996 (HIPAA)
Privacy Rule allows those doctors, nurses, hospitals, laboratory
technicians, and other health care providers that are covered entities
to use or disclose protected health information, such as X-rays,
laboratory and pathology reports, diagnoses, and other medical
information for treatment purposes without the patient's express
authorization. This includes sharing the information to consult with
other providers, including providers who are not covered entities, to
treat a different patient, or to refer the patient (45 CFR 164.506).
We delayed the effective date of the election statement content
modifications and the hospice election statement addendum until FY 2021
to allow hospices adequate time to make the necessary modifications to
their current election statements, develop
[[Page 20961]]
their own election statement addendum, and make any changes to their
current software and business processes to accommodate the
requirements. Furthermore, in the FY 2020 Hospice final rule, we stated
we would examine the operational and logistical issues highlighted by
commenters in response to the election statement addendum to determine
if any additional proposals would be required for FY 2021 rulemaking.
These issues included concerns about the best way to furnish this
information to patients and their representatives in the most clear and
unobtrusive way; mechanisms to make necessary changes or adjustments to
the addendum content; obtaining necessary signature(s) on the addendum;
expected documentation in the hospice's medical record to determine
whether the addendum was requested, when it was requested, whether it
was present, and whether the condition for payment requirement has been
met; expectations as to the auditing process by the Medicare
Administrative Contractors (MACs) when an Additional Documentation
Request (ADR) was made; and the provision of MAC and BFCC-QIO
education.
As noted in the FY 2020 Hospice final rule (84 FR 38509), the
hospice Conditions of Participation (CoPs) at Sec. 418.52(a) require
that during the initial assessment visit, in advance of furnishing
care, the hospice must provide the patient or representative with
verbal (meaning spoken) and written notice of the patient's rights and
responsibilities in a language and manner that the patient understands.
Furthermore, hospices are to inform the beneficiary of the services
covered under the Medicare hospice benefit, as well as the scope of
such services. The intent of this standard was to ensure that patients
were aware of their potential out-of-pocket costs for hospice care,
such as co-payments, so that they would not be surprised by financial
concerns at this stressful time (73 FR 32097). Therefore, hospices are
already tasked with providing detailed information on hospice services
and limitations to those services to the patient upon election of the
benefit. We believe that the addendum further complements these
requirements by ensuring that the hospice informs them of any items,
services, or drugs which the terminally ill individual would have to
seek outside of the benefit. As we also noted in the FY 2020 Hospice
final rule, we stated that we would furnish a modified model election
statement and election statement addendum to provide the industry as
they move forward making the changes to their own election statements
and as they develop an addendum to communicate those items, services,
and drugs they will not be covering because they have determined them
to be unrelated to the terminal illness and related conditions. We have
posted the modified model election statement and addendum on the
Hospice Center web page, https://www.cms.gov/Center/Provider-Type/Hospice-Center, to give hospices an idea as to the requirements and how
they can develop their own forms. Because we detailed the content
requirements in the FY 2020 Hospice final rule, we believe that
hospices have been provided with specific information in order to
develop their own election statement addendum without any further
proposals. We expect to issue an MLN Matters[supreg] article to
accompany this proposed rule to further educate the hospice community
as to the election statement and addendum content requirements
effective for hospice elections beginning on and after October 1, 2020.
Regarding mechanisms to make any necessary changes or adjustments
to the requested addendum content, hospices have the option to make
updates to the addendum, if necessary, to include such conditions,
items, services and drugs they determine to be unrelated throughout the
course of a hospice election in a format that works best for their
current processes. Hospices are already required to make updates to the
plan of care at least every 15 days, or more often as the patient's
condition warrants, in accordance with the requirements at Sec.
418.56(d). Therefore, hospices already have systems in place to address
and document the changing needs of the patient via the hospice plan of
care. We would expect that hospices would adopt a similar process for
making any necessary changes or adjustments to the election statement
addendum. Moreover, we do not expect that there would be frequent
changes to the addendum, especially as a patient continues in a hospice
election and where most conditions are or become related to the
terminal prognosis and therefore, the responsibility of the hospice to
manage.
The hospice election statement has always required the signature of
the electing individual (or their representative). This requirement has
not changed with the modifications to the election statement and if the
individual (or representative) requests the election statement
addendum, the finalized requirements include the signature of the
individual (or representative), as well as the date the addendum was
signed. We would expect that the signature on the addendum would be
similar to how each hospice obtains the individual's signature on the
election statement itself. That is, if the individual electronically
signs the election statement, there is nothing prohibiting the hospice
from having the addendum electronically signed. We note that it is at
the contractor's discretion as to how they address patient/
representative electronic signatures in their review of medical
records, so hospices should confirm with their respective Medicare
contractors as to the use of electronic signatures for beneficiary (or
representative) signatures. However, the addendum is required to be
furnished to the individual in writing so that the individual (or
representative) can understand the information provided, make treatment
decisions based on that information, and share such information with
non-hospice providers rendering items and services to the individual.
Therefore, the format of the addendum must be usable for the patient;
most often we would expect that this would be in a hard copy format
that the individual can keep for his/her own records, similar to how
hospices are required by the hospice CoPs at Sec. 418.52(a)(3) to
provide the individual a copy of the notice of patient rights and
responsibilities.
For purposes of this condition for payment, we finalized that the
signed addendum is only acknowledgement of the beneficiary's (or
representative's) receipt of the addendum (or its updates) and this
payment requirement would be met if there was a signed addendum (and
any signed updates) in the requesting beneficiary's medical record with
the hospice. The hospice CoPs at Sec. 418.104(a)(2) says that the
patient's record must include ``signed copies of the notice of patient
rights in accordance with Sec. 418.52 and election statement in
accordance with Sec. 418.24.'' As the addendum is part of the election
statement as set forth in Sec. 418.24, then it is also a required part
of the patient's record, if the addendum has been requested by the
beneficiary (or representative).
We believe that a signed addendum connotes that the hospice had the
discussion about the addendum and its content. Likewise, in the event
that the individual (or representative) did not request the addendum,
we would expect hospices to document, in some fashion, that the
addendum was discussed with the patient (or representative) at the time
of admission, similar to how other patient and family discussions are
documented in the hospice's clinical record. Hospices can develop a way
to
[[Page 20962]]
document whether or not the addendum was requested at the time of
hospice election (or at any time throughout the course of hospice
care). This could be done in checklist format or as anecdotal notes by
the nurse. However, we did not propose a specific format in which to
document such conversations and hospices can develop their own
processes to incorporate into their current workflow. We believe
careful documentation that the addendum was discussed and whether or
not it was requested would be an essential step hospices could take to
protect themselves from possible claims denials related to any absence
of an addendum (or addendum update) in the medical record. The model
election form and addendum posted on the Hospice Center web page will
provide one example as to how hospices can document that the addendum
was discussed at the time of election. We believe that hospices are the
best to determine how to assimilate this requirement into their current
processes and that it is not necessary to propose a specific process,
thereby creating extra burden for hospices.
For purposes of an ADR and to mitigate any concerns about
situations in which there was no beneficiary (or representative)
request for the addendum, hospices may submit any documentation as it
relates to the presence or non-presence of the addendum, given that it
is a condition for payment. That is, if the beneficiary (or
representative) requested the election statement addendum, then the
hospice should submit the signed addendum as part of any ADR. And if
the beneficiary (or representative) did not request the election
statement addendum, then the hospice can submit any documentation in
response to an ADR that indicates that no beneficiary (or
representative) request for an addendum was made to ensure that it is
clear that the hospice addressed the addendum with the beneficiary. We
believe that this situation is similar to the patient-designated
attending physician requirement on the hospice election statement. That
is, the hospice attending physician must be identified by the
beneficiary on the hospice election statement, but only if the
beneficiary designates one. We are aware that many hospices have
included a checkbox on their election statement to indicate when the
beneficiary has opted not to designate an attending physician. Hospices
may choose to adopt a similar process for the election statement
addendum to ensure that they have documented those situations when a
beneficiary does not request an addendum upon having been told of their
right to request one.
However, we understand stakeholder concerns regarding potential
claims denials in the event that there is no signed addendum in the
beneficiary's hospice clinical record because it was not requested.
While we believe that a consistent, comprehensive process for
documenting when a beneficiary (or representative) does not request the
addendum will help mitigate claim denial issues, upon display of this
proposed rule, we have posted a model hospice election statement and
addendum on the Hospice Center web page (https://www.cms.gov/Center/Provider-Type/Hospice-Center) to assist hospices in understanding the
content requirements. We remind hospices that the modifications to the
election statement are effective for all hospice elections beginning on
and after October 1, 2020. The model election statement posted on the
Hospice Center web page illustrates how hospices can incorporate the
finalized modifications into their own election statements. The model
addendum, also posted on the Hospice Center web page, demonstrates how
hospices can include all of the addendum requirements in a format that
could assimilate into their current processes. We are soliciting
comments on both of these model examples to see if they are helpful in
educating hospices in how to meet these requirements effective on
October 1, 2020. Additionally, we will provide education to Medicare
contractors to help ensure that these finalized policies are fully
understood by all relevant stakeholders.
We are not proposing any changes to the policies finalized in the
FY 2020 Hospice final rule regarding the election statement content
modifications or the requirements for the election statement addendum
as set forth at Sec. 418.24. These finalized policies will be
effective for all hospice elections beginning on and after October 1,
2020.
Note: There are no proposals or updates in this proposed rule to
the Hospice Quality Reporting Program.
IV. Collection of Information Requirements
This document does not impose information collection requirements,
that is, reporting, recordkeeping or third-party disclosure
requirements. Consequently, there is no need for review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.).
V. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VI. Regulatory Impact Analysis
A. Statement of Need
This proposed rule meets the requirements of our regulations at
Sec. 418.306(c) and (d), which require annual issuance, in the Federal
Register, of the hospice wage index based on the most current available
CMS hospital wage data, including any changes to the definitions of
CBSAs or previously used Metropolitan Statistical Areas (MSAs), as well
as any changes to the methodology for determining the per diem payment
rates. This proposed rule would also update payment rates for each of
the categories of hospice care, described in Sec. 418.302(b), for FY
2021 as required under section 1814(i)(1)(C)(ii)(VII) of the Act. The
payment rate updates are subject to changes in economy-wide
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act.
B. Overall Impacts
We estimate that the aggregate impact of the payment provisions in
this proposed rule would result in an estimated increase of $580
million in payments to hospices, resulting from the hospice payment
update percentage of 2.6 percent for FY 2021. The impact analysis of
this proposed rule represents the projected effects of the changes in
hospice payments from FY 2020 to FY 2021. Using the most recent data
available at the time of rulemaking, in this case FY 2019 hospice
claims data as of January 13, 2020, we apply the current FY 2020 wage
index. Then, using the same FY 2019 data, we apply the FY 2021 wage
index to simulate FY 2021 payments. Finally, we apply a budget
neutrality adjustment so that the aggregate simulated payments do not
increase or decrease due to changes in the wage index.
Certain events may limit the scope or accuracy of our impact
analysis, because such an analysis is susceptible to forecasting errors
due to other changes in the forecasted impact time period. The nature
of the Medicare program is such that the changes may interact, and the
complexity of the interaction of
[[Page 20963]]
these changes could make it difficult to predict accurately the full
scope of the impact upon hospices.
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), the Congressional Review Act (5 U.S.C. 804(2)), and Executive
Order 13771 on Reducing Regulation and Controlling Regulatory Costs
(January 30, 2017).
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). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). We estimate that this rulemaking is ``economically significant''
as measured by the $100 million threshold, and hence also a major rule
under the Congressional Review Act. Accordingly, we have prepared a RIA
that, to the best of our ability presents the costs and benefits of the
rulemaking.
C. Anticipated Effects
The Regulatory Flexibility Act (RFA) requires agencies to analyze
options for regulatory relief of small businesses if a rule has a
significant impact on a substantial number of small entities. The great
majority of hospitals and most other health care providers and
suppliers are small entities by meeting the Small Business
Administration (SBA) definition of a small business (in the service
sector, having revenues of less than $7.5 million to $38.5 million in
any 1 year), or being nonprofit organizations. For purposes of the RFA,
we consider all hospices as small entities as that term is used in the
RFA. 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 effect of the FY 2021 hospice payment update
percentage results in an overall increase in estimated hospice payments
of 2.6 percent, or $580 million. The distributional effects of the
proposed FY 2021 hospice wage index do not result in a greater than 5
percent of hospices experiencing decreases in payments of 3 percent or
more of total revenue. Therefore, the Secretary has determined that
this rule will not create a significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the Social Security Act requires us
to prepare a regulatory impact analysis 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 603 of the 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 rule
will only affect hospices. Therefore, the Secretary has determined that
this rule will not have a significant impact on the operations of a
substantial number of small rural hospitals.
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 1 year of $100
million in 1995 dollars, updated annually for inflation. The 2020 UMRA
threshold is $156 million. This rule is not anticipated to have an
effect on state, local, or tribal governments, in the aggregate, or on
the private sector of $156 million or more.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
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 rule under these criteria of
Executive Order 13132, and have determined that it will not impose
substantial direct costs on state or local governments.
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed rule, we
should estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
commenters on last year's proposed rule will be the number of reviewers
of this proposed rule. We acknowledge that this assumption may
understate or overstate the costs of reviewing this proposed rule. It
is possible that not all commenters reviewed last year's rule in
detail, and it is also possible that some reviewers chose not to
comment on the proposed rule. For these reasons we thought that the
number of past commenters would be a fair estimate of the number of
reviewers of this proposed rule.
Using the wage information from the Bureau of Labor Statistics
(BLS) for medical and health service managers (Code 11-9111), we
estimate that the cost of reviewing this rule is $107.38 per hour,
including overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm). This proposed rule consists of approximately
15,000 words. Assuming an average reading speed of 250 words per
minute, it would take approximately 0.50 hours for the staff to review
half of it. For each hospice that reviews the rule, the estimated cost
is $53.69 (0.50 hour x $107.38). Therefore, we estimate that the total
cost of reviewing this regulation is $7,946.12 ($53.69 x 148
reviewers).
D. Detailed Economic Analysis
1. Proposed Hospice Payment Update for FY 2021
The FY 2021 hospice payment impacts appear in Table 11. We tabulate
the resulting payments according to the classifications (for example,
provider type, geographic region, facility size), and compare the
difference between current and future payments to determine the overall
impact. The first column shows the breakdown of all hospices by
provider type and control (non-profit, for-profit, government,
[[Page 20964]]
other), facility location, facility size. The second column shows the
number of hospices in each of the categories in the first column. The
third column shows the effect of using the FY 2021 updated wage data.
This represents the effect of moving from the FY 2020 hospice wage
index to the FY 2021 unadjusted hospice wage index with the old OMB
delineations. The fourth column shows the effect of moving from the old
OMB delineations to the new OMB delineations with a 5 percent cap on
wage index decreases. The aggregate impact of the changes in columns
three and four is zero percent, due to the hospice wage index
standardization factor. However, there are distributional effects of
the FY 2021 hospice wage index. The fifth column shows the proposed FY
2021 hospice payment update percentage of 2.6 percent as mandated by
section 1814(i)(1)(C) of the Act, and is consistent for all providers.
The 2.6 percent hospice payment update percentage is based on an
estimated 3.0 percent inpatient hospital market basket update, reduced
by a 0.4 percentage point productivity adjustment. It is projected that
aggregate payments would increase by 2.6 percent, assuming hospices do
not change their service and billing practices. The sixth column shows
the estimated total impact for FY 2021.
We note that simulated payments are based on utilization in FY 2019
as seen on Medicare hospice claims (accessed from the CCW in January of
2020) and only include payments related to the level of care and do not
include payments related to the service intensity add-on.
As illustrated in Table 10, the combined effects of all the
proposals vary by specific types of providers and by location.
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E. Alternatives Considered
For the FY 2021 Hospice Wage Index and Rate Update proposed rule,
we considered alternatives to the proposals articulated in section
III.A. We considered not adopting the OMB delineations. However, we
have historically adopted the latest OMB delineations as we believe
that implementing the new OMB delineations would result in wage index
values being more representative of the actual costs of labor in a
given area. Additionally, we considered not implementing the 1-year 5
percent cap on wage index decreases. However, we decided that the 5
percent cap was a better option for the transition because it would
mitigate potential negative impacts from the transition to the new OMB
delineations and allow providers the opportunity to adjust to the
changes in their wage index values gradually.
F. Accounting Statement
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 11, we have
prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this proposed rule.
Table 11 provides our best estimate of the possible changes in Medicare
payments under the hospice benefit as a result of the policies in this
proposed rule. This estimate is based on the data for 4,408 hospices in
our impact analysis file, which was constructed using FY 2019 claims
available in January 2020. All expenditures are classified as transfers
to hospices.
Table 11--Accounting Statement: Classification of Estimated Transfers
and Costs, From FY 2020 to FY 2021
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers $580 million. *
From Whom to Whom? Federal Government to
Medicare Hospices.
------------------------------------------------------------------------
* The net increase of $580 million in transfer payments is a result of
the 2.6 percent hospice payment update compared to payments in FY
2020.
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G. Regulatory Reform Analysis Under E.O. 13771
Executive Order 13771, entitled ``Reducing Regulation and
Controlling Regulatory Costs,'' was issued on January 30, 2017 (82 FR
9339, February 3, 2017) and requires that the costs associated with
significant new regulations ``shall, to the extent permitted by law, be
offset by the elimination of existing costs associated with at least
two prior regulations.'' It has been determined that this proposed rule
is an action that primarily results in transfers and does not impose
more than de minimis costs as described above and thus is not a
regulatory or deregulatory action for the purposes of Executive Order
13771.
H. Conclusion
We estimate that aggregate payments to hospices in FY 2021 will
increase by $580 million, or 2.6 percent, compared to payments in FY
2020. We estimate that in FY 2021, hospices in urban areas will
experience, on average, 2.6 percent increase in estimated payments
compared to FY 2020. While hospices in rural areas will experience, on
average, 2.8 percent increase in estimated payments compared to FY
2020. Hospices providing services in the Middle Atlantic region would
experience the largest estimated increases in payments of 3.0 percent.
Hospices serving patients in areas in the New England and Outlying
regions would experience, on average, the lowest estimated increase of
1.7 percent and 1.8 percent, respectively in FY 2021 payments.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
Dated: March 24, 2020.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: April 9, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2020-07959 Filed 4-10-20; 4:15 pm]
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