Medicare Program; FY 2025 Hospice Wage Index and Payment Rate Update, Hospice Conditions of Participation Updates, and Hospice Quality Reporting Program Requirements, 23778-23838 [2024-06921]

Agencies

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

[Federal Register Volume 89, Number 66 (Thursday, April 4, 2024)]
[Proposed Rules]
[Pages 23778-23838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-06921]



[[Page 23777]]

Vol. 89

Thursday,

No. 66

April 4, 2024

Part III





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Part 418





Medicare Program; FY 2025 Hospice Wage Index and Payment Rate Update, 
Hospice Conditions of Participation Updates, and Hospice Quality 
Reporting Program Requirements; Proposed Rule

Federal Register / Vol. 89 , No. 66 / Thursday, April 4, 2024 / 
Proposed Rules

[[Page 23778]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 418

[CMS-1810-P]
RIN 0938-AV29


Medicare Program; FY 2025 Hospice Wage Index and Payment Rate 
Update, Hospice Conditions of Participation Updates, and Hospice 
Quality Reporting Program Requirements

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Proposed rule.

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SUMMARY: This proposed rule would update the hospice wage index, 
payment rates, and aggregate cap amount for Fiscal Year (FY) 2025. This 
rule proposes changes to the Hospice Quality Reporting Program. This 
rule also proposes to adopt the most recent Office of Management and 
Budget statistical area delineations, which would change the hospice 
wage index. This rule proposes to clarify current policy related to the 
``election statement'' and the ``notice of election'', as well as to 
add clarifying language regarding hospice certification. Finally, this 
rulemaking solicits comments regarding potential implementation of a 
separate payment mechanism to account for high intensity palliative 
care services.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than May 28, 2024.

ADDRESSES: In commenting, refer to file code CMS-1810-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-1810-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-1810-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].
    For questions regarding the CAHPS[supreg] Hospice Survey, contact 
Lauren Fuentes at (410) 786-2290.
    For questions regarding the hospice conditions of participation 
(CoPs), contact Mary Rossi-Coajou at (410) 786-6051.
    For questions regarding the hospice quality reporting program, 
contact Jermama Keys at (410) 786-7778.

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. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.
    Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a 
plain language summary of this proposed rule may be found at https://www.regulations.gov/.

I. Executive Summary

A. Purpose

    This proposed rule would update the hospice wage index, payment 
rates, and cap amount for Fiscal Year (FY) 2025 as required under 
section 1814(i) of the Social Security Act (the Act).
    This rule also proposes to adopt the most recent Office of 
Management and Budget (OMB) statistical area delineations based on data 
collected during the 2020 Decennial Census, which would result in 
changes to the hospice wage index. In addition, this rule proposes 
reorganization of the regulations to clarify current policy related to 
the ``election statement'' and the ``notice of election (NOE),'' as 
well as to add clarifying language regarding who can certify terminal 
illness. This rulemaking solicits comments on a potential policy to 
account for the increased hospice costs of providing high intensity 
palliative care services. In past rules, we have presented data 
regarding important hospice utilization trends. This year, and in 
subsequent years, the monitoring section will be removed from the 
rulemaking and placed on the CMS hospice center web page, which can be 
found at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice.
    This rule also proposes that Hospice Quality Reporting Program 
(HQRP) measures be collected through a new collection instrument, the 
Hospice Outcomes and Patient Evaluation (HOPE); this rule also proposes 
two HOPE-based measures and lays out the planned trajectory for further 
development of this instrument; requests information regarding 
potential social determinants of health (SDOH) elements and provides 
updates on Health Equity, future quality measures (QMs), and public 
reporting requirements. Finally, this rule also proposes changes to the 
Hospice Consumer Assessment of Healthcare Providers and Systems 
(Hospice CAHPS) Survey.

B. Summary of the Major Provisions

    Section III.A.1 of this proposed rule 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.
    Section III.A.2 of this proposed rule proposes to adopt the new OMB 
labor market delineations from the July 21, 2023, OMB Bulletin No. 23-
01 based on data collected from the 2020 Decennial Census.
    Section III.A.3 of this proposed rule includes the proposed FY 2025 
hospice payment update percentage of 2.6 percent.
    Section III.A.4 of this proposed rule proposes updates to the 
hospice payment rates.
    Section III.A.5 of this proposed rule includes the proposed update 
to the hospice cap amount for FY 2025 by the hospice payment update 
percentage of 2.6 percent.
    In section III.B of this proposed rule, we propose clarifying 
regulation text changes, with no change to current policy. This 
includes reorganizing the regulations to clearly identify the 
distinction between the ``election

[[Page 23779]]

statement'' and the ``notice of election,'' as well as including 
clarifying text changes that align payment regulations and Conditions 
of Participation (CoPs) regarding who may certify terminal illness and 
determine admission to hospice care.
    In section III.C of this proposed rule, we include a Request for 
Information (RFI) on a potential policy to account for higher hospice 
costs involved in the provision of high intensity palliative care 
treatments.
    Finally, in section III.D of this rule proposed rule, we propose 
HOPE-based process measures; the HOPE instrument; discuss updates to 
potential future quality measures; and propose changes to the 
CAHPS[supreg] Hospice Survey.

C. Summary of Impacts

    The overall economic impact of this proposed rule is estimated to 
be $705 million in increased payments to hospices in FY 2025.

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 has a medical prognosis that his or her life expectancy 
is 6 months or less if the illness runs its normal course. The 
regulations at Sec.  418.22(b)(2) require that clinical information and 
other documentation that support the medical prognosis accompany the 
certification and be filed in the medical record with it. 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 primarily home-based services. 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 group, which 
includes the hospice physician, the patient's symptoms cannot be 
effectively managed at home, then the patient is eligible for general 
inpatient care (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 their home and continue to receive routine 
home care (RHC). Limited, short-term, intermittent, inpatient respite 
care (IRC) is also available because of the absence or need for relief 
of the family or other caregivers. Additionally, an individual can 
receive continuous home care (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. CHC may be covered for as much as 24 hours a day, and these 
periods must be predominantly nursing care, in accordance with the 
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 CHC rate (Sec.  418.302(e)(4)).
    Hospices covered by this proposed rule must comply with applicable 
civil rights laws, including section 1557 of the Affordable Care Act, 
section 504 of the Rehabilitation Act of 1973 and the Americans with 
Disabilities Act, which require covered programs to take appropriate 
steps to ensure effective communication with individuals with 
disabilities and companions with disabilities, including the provisions 
of auxiliary aids and services when necessary for effective 
communication.\1\ Further information may be found at: https://www.hhs.gov/civil-rights/.
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    \1\ Hospices receiving Medicare Part A funds or other Federal 
financial assistance from the Department are also subject to 
additional Federal civil rights laws, including the Age 
Discrimination Act, and are subject to conscience and religious 
freedom laws where applicable.
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    Title VI of the Civil Rights Act of 1964 prohibits discrimination 
on the basis of race, color or national origin in federally assisted 
programs or activities. The Office for Civil Rights (OCR) interprets 
this to require that recipients of Federal financial assistance take 
reasonable steps to provide meaningful access to their programs or 
activities to individuals with limited English proficiency (LEP).\2\ 
Similarly, Section 1557's implementing regulation requires covered 
entities to take reasonable steps to provide meaningful access to LEP 
individuals in federally funded health programs and activities (45 CFR 
92.101(a)). Meaningful access may require the provision of interpreter 
services and translated materials (45 CFR 92.101(a)(2)).
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    \2\ HHS OCR, Guidance to Federal Financial Assistance Recipients 
Regarding Title VI Prohibition Against National Origin 
Discrimination Affecting Limited English Proficient Persons, 68 FR 
47311 (Aug. 8, 2003), https://www.hhs.gov/civil-rights/for-individuals/special-topics/limited-english-proficiency/guidance-federal-financial-assistance-recipients-title-vi/.
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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; speech-

[[Page 23780]]

language pathology therapy; medical social services; home health aide 
services (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 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, 
the 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 (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, Congress also 
expected hospices to continue to use volunteer services, although 
Medicare does not pay for these volunteer services (section 
1861(dd)(2)(E) of the Act). As stated in the Health Care Financing 
Administration's (now Centers for Medicare & Medicaid Services (CMS)) 
proposed rule ``Medicare Program; Hospice Care (48 FR 38149), the 
hospice must have an interdisciplinary group composed of 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 the 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 based on 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 the benefit). This per diem 
payment is meant to cover all hospice services and items needed to 
manage the beneficiary's care, as required by section 1861(dd)(1) of 
the Act.
    While payment 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 prohibited 
activities, even in the context of a per diem payment. For example, 
hospices are prohibited from playing a role in medical aid in dying 
(MAID) where such practices have been legalized in certain states. The 
Assisted Suicide Funding Restriction Act of 1997 (Pub. L. 105-12, April 
30, 1997) 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, 
the prohibition does not pertain 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.
    The Medicare hospice benefit has been revised and refined since its 
implementation after various Acts of Congress and Medicare rules. For a 
historical list of changes and regulatory actions, we refer readers to 
the background section of previous Hospice Wage Index and Payment Rate 
Update rules.\3\
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    \3\ Hospice Regulations and Notices. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Regulations-and-Notices.
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III. Provisions of the Proposed Rule

A. Proposed FY 2025 Hospice Wage Index and Rate Update

1. Proposed FY 2025 Hospice Wage Index
    The hospice wage index is used to adjust payment rates for hospices 
under the Medicare program to reflect local differences in area wage 
levels, based on the location where services are furnished. 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 the Office of Management and Budget (OMB) 
to Metropolitan Statistical Area (MSA) definitions.
    In general, 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 September 14, 2018, OMB 
issued OMB Bulletin No. 18-04, which superseded the April 10, 2018 OMB 
Bulletin No. 18-03. OMB Bulletin No. 18-04 made revisions to the 
delineations of Metropolitan Statistical Areas (MSAs), Micropolitan 
Statistical Areas, and Combined Statistical Areas, and guidance on uses 
of the delineations in these areas. This bulletin provided the 
delineations of all MSAs, 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 
through 37252), and Census Bureau data. 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. In the FY 2021 Hospice Wage 
Index final rule (85 FR 47080), we finalized our proposal to adopt the 
revised OMB delineations from the September 14, 2018 OMB Bulletin 18-04 
with a 5-percent cap on wage index decreases, where the estimated 
reduction in a geographic area's wage index would be capped at 5-
percent in FY 2021 and no cap would be applied to wage index decreases 
for the second year (FY 2022). On March 6, 2020, OMB issued Bulletin 
No. 20-01, which provided updates to and superseded OMB Bulletin No. 
18-04 that was issued on September 14, 2018. The attachments to OMB 
Bulletin No. 20-01 provided detailed information on the update to 
statistical areas since September 14, 2018, and were based on the 
application of the 2010 Standards for Delineating Metropolitan and 
Micropolitan Statistical Areas to Census Bureau population estimates 
for July 1, 2017 and July 1, 2018. (For a copy of this bulletin, we 
refer readers to the following website: https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf.) In OMB Bulletin No. 20-01, 
OMB announced one new Micropolitan Statistical Area, one new component 
of an existing Combined Statistical Area

[[Page 23781]]

(CSA), and changes to New England City and Town Area (NECTA) 
delineations. In the FY 2021 Hospice Wage Index final rule (85 FR 
47070) we stated that if appropriate, we would propose any updates from 
OMB Bulletin No. 20-01 in future rulemaking. After reviewing OMB 
Bulletin No. 20-01, we determined that the changes in Bulletin 20-01 
encompassed delineation changes that would not affect the Medicare wage 
index for FY 2022. Specifically, the updates consisted of changes to 
NECTA delineations and the redesignation of a single rural county into 
a newly created Micropolitan Statistical Area. The Medicare wage index 
does not utilize NECTA definitions, and, as most recently discussed in 
the FY 2021 Hospice Wage Index final rule (85 FR 47070), we include 
hospitals located in Micropolitan Statistical areas in each State's 
rural wage index.
    As described in the August 8, 1997 Hospice Wage Index final rule 
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index 
is used as the raw wage index for the hospice benefit. These raw wage 
index values are subject to application of the hospice floor to compute 
the hospice wage index used to determine payments to hospices. As 
previously discussed, the 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.
    In the FY 2023 Hospice Wage Index final rule (87 FR 45673), we 
finalized for FY 2023 and subsequent years, the application of a 
permanent 5-percent cap on any decrease to a geographic area's wage 
index from its wage index in the prior year, regardless of the 
circumstances causing the decline, so that a geographic area's wage 
index would not be less than 95 percent of its wage index calculated in 
the prior FY. When calculating the 5-percent cap on wage index 
decreases we start with the current fiscal year's pre-floor, pre-
reclassification hospital wage index value for a core-based statistical 
area (CBSA) or statewide rural area and if that wage index value is 
below 0.8000, we apply the hospice floor as discussed above. Next, we 
compare the current fiscal year's wage index value after the 
application of the hospice floor to the final wage index value from the 
previous fiscal year. If the current fiscal year's wage index value is 
less than 95 percent of the previous year's wage index value, the 5-
percent cap on wage index decreases would be applied and the final wage 
index value would be set equal to 95 percent of the previous fiscal 
year's wage index value. If the 5-percent cap is applied in one fiscal 
year, then in the subsequent fiscal year, that year's pre-floor, pre-
reclassification hospital wage index would be used as the starting wage 
index value and adjusted by the hospice floor. The hospice floor 
adjusted wage index value would be compared to the previous fiscal 
year's wage index which had the 5-percent cap applied. If the hospice 
floor adjusted wage index value for that fiscal year is less than 95 
percent of the capped wage index from the previous year, then the 5-
percent cap would be applied again, and the final wage index value 
would be 95 percent of the capped wage index from the previous fiscal 
year. Using the example from above, 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. If County A had a wage index value 
of 0.6200 in the previous fiscal, then we would compare 0.4593 to the 
previous fiscal year's wage index value. Since 0.4593 is less than 95 
percent of 0.6200, then County A's hospice wage index would be 0.5890, 
which is equal to 95-percent of the previous fiscal year's wage index 
value of 0.6200. In the next fiscal year, the updated wage index value 
would be compared to the wage index value of 0.5890.
    Previously, this methodology was applied to all the counties that 
make up the CBSA or rural area. However, as discussed in section 
III.A.2.f., if we adopt the revised OMB delineations this methodology 
would also be applied to individual counties.
    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. For FY 2025, we are 
proposing that the proposed hospice wage index would be based on the FY 
2025 hospital pre-floor, pre-reclassified wage index for hospital cost 
reporting periods beginning on or after October 1, 2020 and before 
October 1, 2021 (FY 2021 cost report data). The proposed FY 2025 
hospice wage index 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 regulations that 
govern hospice payment do not provide a mechanism for allowing hospices 
to seek geographic reclassification or to utilize the rural floor 
provisions that exist for IPPS hospitals. The reclassification 
provision found in section 1886(d)(10) of the Act is specific to 
hospitals. Section 4410(a) of the Balanced Budget Act of 1997 (Pub. L. 
105-33) provides that the area wage index applicable to any hospital 
that is located in an urban area of a State may not be less than the 
area wage index applicable to hospitals located in rural areas in that 
State. This rural floor provision is also specific to hospitals. 
Because the reclassification and the hospital rural floor policies 
apply to hospitals only, and not to hospices, we continue to believe 
the use of the pre-floor and pre-reclassified hospital wage index 
results is the most appropriate adjustment to the labor portion of the 
hospice payment rates. This position is longstanding and consistent 
with other Medicare payment systems, for example, skilled nursing 
facility prospective payment system (SNF PPS), inpatient rehabilitation 
facility prospective payment system (IRF PPS), and home health 
prospective payment system (HH PPS). However, the hospice wage index 
does include the hospice floor, which is applicable to all CBSAs, both 
rural and urban. The hospice floor adjusts pre-floor, pre-reclassified 
hospital wage index values below 0.8 by a 15 percent increase subject 
to a maximum wage index value of 0.8. The proposed FY 2025 hospice wage 
index would also include the 5-percent cap on wage index decreases. The 
appropriate wage index value would be 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.
    There exist some geographic areas where there are no hospitals, and 
thus, no hospital wage data on which to base the calculation of the 
hospice wage index. 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 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

[[Page 23782]]

areas. For FY 2025, the only CBSA without a hospital from which 
hospital wage data can be derived is 25980, Hinesville-Fort Stewart, 
Georgia. The FY 2025 proposed wage index value for Hinesville-Fort 
Stewart, Georgia is 0.8726.
    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). For FY 2025, as 
part of our proposal to adopt the revised OMB delineations discussed 
further in section III.A.2, we are proposing that rural North Dakota 
would now become a rural area without a hospital from which hospital 
wage data can be devised. Therefore, to calculate the wage index for 
rural area 99935, North Dakota, we are proposing to use as a proxy, the 
average pre-floor, pre-reclassified hospital wage data (updated by the 
hospice floor) from the contiguous CBSAs: CBSA 13900-Bismark, ND, CBSA 
22020-Fargo, ND-MN, CBSA 24220-Grand Forks, ND-MN and CBSA 33500, 
Minot, ND, which results in a proposed FY 2025 hospice wage index of 
0.8446 for rural North Dakota.
[GRAPHIC] [TIFF OMITTED] TP04AP24.003

    Previously, the only rural area without a hospital from which 
hospital wage data could be derived was in Puerto Rico. However, for 
rural Puerto Rico, we did not apply this methodology due to the 
distinct economic circumstances that exist there (for example, due to 
the close proximity of almost all of Puerto Rico's various urban areas 
to 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 used the most recent wage index previously available for 
that area which was 0.4047, subsequently adjusted by the hospice floor 
for an adjusted wage index value of 0.4654. For FY 2025, as part of our 
proposal to adopt the revised OMB delineations discussed further in 
section III.A.2.c. below, there would now be a hospital in rural Puerto 
Rico from which hospital wage data can be derived. Therefore, we are 
proposing that the wage index for rural Puerto Rico would now be based 
on the hospital wage data for the area instead of the previously 
available pre-hospice floor wage index of 0.4047, which equaled an 
adjusted wage index value of 0.4654. The FY 2025 proposed pre-hospice 
floor unadjusted wage index for rural Puerto Rico would be 0.2520, and 
is subsequently adjusted by the hospice floor to equal 0.2898. Because 
0.2898 is more than a 5-percent decline in the FY 2024 wage index, the 
adjusted FY 2025 wage index with the 5-percent cap applied would equal 
0.95 multiplied by 0.4654 (that is, the FY 2024 wage index with floor), 
which results in a proposed wage index of 0.4421.
    Finally, we are proposing that for FY 2025, if the adoption of the 
revised OMB delineations is finalized that Delaware, which was 
previously an all-urban State, would now have one rural area with a 
hospital from which hospital wage data can be derived. The proposed FY 
2025 wage index for rural area 99908 Delaware would be 1.0429.
2. Proposed Implementation of New Labor Market Delineations
    On July 21, 2023, OMB issued Bulletin No. 23-01, which updates and 
supersedes OMB Bulletin No. 20-01, issued on March 6, 2020. OMB 
Bulletin No. 23-01 establishes revised delineations for the MSAs, 
Micropolitan Statistical Areas, Combined Statistical Areas, and 
Metropolitan Divisions, collectively referred to as Core Based 
Statistical Areas (CBSAs). According to OMB, the delineations reflect 
the 2020 Standards for Delineating Core Based Statistical Areas (CBSAs) 
(the ``2020 Standards''), which appeared in the Federal Register (86 FR 
37770 through 37778) on July 16, 2021, and application of those 
standards to Census Bureau population and journey-to-work data (for 
example, 2020 Decennial Census, American Community Survey, and Census 
Population Estimates Program data). A copy of OMB Bulletin No. 23-01 is 
available online at: https://www.whitehouse.gov/wp-content/uploads/2023/07/OMB-Bulletin-23-01.pdf.
    The July 21, 2023 OMB Bulletin No. 23-01 contains 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 
July 21, 2023 OMB Bulletin No. 23-01 for the hospice wage index 
effective beginning in FY 2025.
a. Micropolitan Statistical Areas
    As discussed in the FY 2006 Hospice Wage Index and Payment Rate 
Update

[[Page 23783]]

proposed rule (70 FR 22397) and final rule (70 FR 45132), we considered 
how to use the Micropolitan Statistical Area definitions in the 
calculation of the wage index. Previously, OMB defined 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 Inpatient Prospective Payment System (IPPS) as discussed in 
the FY 2005 IPPS final rule (69 FR 49029), we 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 (70 FR 22397 and 70 FR 45132). Thus, the hospice statewide rural 
wage index has been determined using IPPS hospital data from hospitals 
located in non-MSAs. In the FY 2021 Hospice final rule (85 FR 47074, 
47080), we finalized a policy to continue to treat Micropolitan Areas 
as ``rural'' and to include Micropolitan Areas in the calculation of 
each State's rural wage index.
    The OMB ``2020 Standards'' continues to define a ``Micropolitan 
Statistical Area'' as a CBSA with at least one Urban Area that has a 
population of at least 10,000, but less than 50,000. The Micropolitan 
Statistical Area comprises the central county or counties containing 
the core, plus adjacent outlying counties having a high degree of 
social and economic integration with the central county or counties as 
measured through commuting. (86 FR 37778). Overall, there are the same 
number of Micropolitan Areas (542) under the new OMB delineations based 
on the 2020 Census as there were using the 2010 Census. We note, 
however, that 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, and thus were treated as rural, have 
become urban based on the 2020 Decennial Census data. We believe that 
the best course of action would be to continue our established policy 
and include Micropolitan Areas in each State's rural wage index as 
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 2025, and consistent with the treatment of Micropolitan 
Areas under the IPPS, we are also proposing to continue to treat 
Micropolitan Areas as ``rural'' and to include Micropolitan Areas in 
the calculation of each State's rural wage index.
b. Change to County-Equivalents in the State of Connecticut
    In a June 6, 2022 Notice (87 FR 34235-34240), the Census Bureau 
announced that it was implementing the State of Connecticut's request 
to replace the eight counties in the State with nine new ``Planning 
Regions.'' Planning regions are included in OMB Bulletin No. 23-01 and 
now serve as county-equivalents within the CBSA system. We have 
evaluated the change and are proposing to adopt the planning regions as 
county equivalents for wage index purposes. We believe it is necessary 
to adopt this migration from counties to planning region county-
equivalents in order to maintain consistency with our established 
policy of adopting the most recent OMB updates. We are providing the 
following crosswalk in Table 2 for counties located in Connecticut with 
the current and proposed FIPS county and county-equivalent codes and 
CBSA assignments.
BILLING CODE 4120-01-P
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c. Urban Counties That Would Become Rural
    Under the revised OMB statistical area delineations (based upon OMB 
Bulletin No. 23-01), a total of 53 counties (and county equivalents) 
that are currently considered urban would be considered rural beginning 
in FY 2025. Table 3 lists the 53 counties that would become rural if we 
adopt as final our proposal to implement the revised OMB delineations.

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d. Rural Counties That Would Become Urban
    Under the revised OMB statistical area delineations (based upon OMB 
Bulletin No. 23-01), a total of 54 counties (and county equivalents) 
that are currently located in rural areas would be considered located 
in urban areas under the revised OMB delineations beginning in FY 2025. 
Table 4 lists the 54 counties that would be urban if we adopt as final 
our proposal to implement the revised OMB delineations.

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e. Urban Counties That Would Move to a Different Urban CBSA Under the 
Revised OMB Delineations
    In addition to rural counties becoming urban and urban counties 
becoming rural, several urban counties would shift from one urban CBSA 
to a new or existing urban CBSA under our proposal to adopt the revised 
OMB delineations. In other cases, applying the new OMB delineations 
would involve a change only in CBSA name or number, while the CBSA 
would continue to encompass the same constituent counties. For example, 
CBSA 35154 (New Brunswick-Lakewood, NJ) would experience both a change 
to its number and its name, and become CBSA 29484 (Lakewood-New 
Brunswick, NJ), while all three of its constituent counties would 
remain the same. In other cases, only the name of the CBSA would be 
modified. Table 5 lists CBSAs that would change in name and/or CBSA 
number only, but the constituent counties would not change (except in 
instances where an urban county became rural, or a rural county became 
urban; as discussed in the previous section).

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    In some cases, all the urban counties from a FY 2024 CBSA would be 
moved and subsumed by another CBSA in FY 2025. Table 6 lists the CBSAs 
that, under our proposal to adopt the revised OMB statistical area 
delineations, would be subsumed by another CBSA.

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    In other cases, if we adopt the new OMB delineations, some 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. For example, the District of Columbia, DC, Charles 
County, MD and Prince Georges County, MD would move from CBSA 47894 
(Washington-Arlington-Alexandria, DC-VA-MD-WV) into CBSA 47764 
(Washington, DC-Md). Calvert County, MD would move from CBSA 47894 
(Washington-Arlington-Alexandria, DC-VA-MD-WV) into CBSA 30500 
(Lexington Park, MD). The remaining counties that currently make up 
47894 (Washington-Arlington-Alexandria, DC-VA-MD-WV) would move into 
CBSA 11694 (Arlington-Alexandria-Reston, VA-WV). Finally, in some 
cases, a CBSA would lose counties to another existing CBSA if we adopt 
the new OMB delineations. For example, Grainger County, TN would move 
from CBSA 34100 (Morristown, TN) into CBSA 28940 (Knoxville, TN). Table 
7 lists the 73 urban counties that would move from one urban CBSA to a 
new or modified urban CBSA if we adopt the revised OMB delineations.

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BILLING CODE 4120-01-C
f. Proposed Transition Period
    In the past we have provided for transition periods when adopting 
changes that have significant payment implications, particularly large 
negative impacts, in order to mitigate the potential impacts of 
proposed policies on hospices. For example, we have proposed and 
finalized budget-neutral transition policies to help mitigate negative 
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 applied a blended wage index for 
one year (FY 2016) for all geographic areas that consisted 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 
delineations, which resulted in an average of the two values. 
Additionally, in the FY 2021 hospice final rule (85 FR 47079 through 
47080), we proposed and finalized a transition policy 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 allowed 
the effects of our adoption of the revised CBSA delineations from OMB 
Bulletin 18-04 to be phased in over 2 years, where the estimated 
reduction in a geographic area's wage index was capped at five percent 
in FY 2021 (that is, no cap was applied to the reduction in the wage 
index for the second year (FY 2022)). We explained that we believed a 
5-percent cap on the overall decrease in a geographic area's wage index 
value would be appropriate for FY 2021, as it provided predictability 
in payment levels from FY 2020 to FY 2021 and additional transparency 
because it was administratively simpler than our prior one-year 50/50 
blended wage index approach.
    As discussed previously, in the FY 2023 hospice final rule, we 
adopted a permanent 5-percent cap on wage index decreases beginning in 
FY 2023 and each subsequent year (87 FR 45677). The policy applies a 
permanent 5-percent cap on any decrease to a geographic area's wage 
index from its wage index in the prior year, regardless of the 
circumstances causing the decline, so that a geographic area's wage 
index would not be less than 95 percent of its wage index calculated in 
the prior FY.
    For FY 2025, we believe that the permanent 5-percent cap on wage 
index decreases would be sufficient to mitigate any potential negative 
impact for hospices serving beneficiaries in areas that are impacted by 
the proposal to adopt the revised OMB delineations and that no further 
transition is necessary. Previously, the 5-percent cap had been applied 
at the CBSA or statewide rural area level, meaning that all the 
counties that make up the CBSA or rural area received the 5-percent 
cap. However, for FY 2025, to mitigate any potential negative impact 
caused by our proposed adoption of the revised delineations, we propose 
that in addition to the 5-percent cap being calculated for an entire 
CBSA or statewide rural area the cap would also be calculated at the 
county level, so that individual counties moving to a new delineation 
would not experience more than a 5 percent decrease in wage index from 
the previous fiscal year. Specifically, we are proposing for FY 2025, 
that the 5-percent cap would also be applied to counties that would 
move from a CBSA or statewide rural area with a higher wage index value 
into a new CBSA or rural area with a lower wage index value, so that 
the county's FY 2025 wage index would not be less than 95 percent of 
the county's FY 2024 wage index value under the old delineation despite 
moving into a new delineation with a lower wage index.
    Due to the way that we propose to calculate the 5-percent cap for 
counties that experience an OMB designation change, some CBSAs and 
statewide rural areas could have more than one wage index value because 
of the potential for their constituent counties to have different wage 
index values as a result of application of the 5-percent cap. 
Specifically, some counties that change OMB designations would have a 
wage index value that is different than the wage index value assigned 
to the other constituent counties that make up the CBSA or statewide 
rural area that they are moving into because of the

[[Page 23797]]

application of the 5-percent cap. However, for hospice claims 
processing, each CBSA or statewide rural area can have only one wage 
index value assigned to that CBSA or statewide rural area.
    Therefore, hospices that serve beneficiaries in a county that would 
receive the cap would need to use a number other than the CBSA or 
statewide rural area number to identify the county's appropriate wage 
index value for hospice claims in FY 2025. We are proposing that 
beginning in FY 2025, counties that have a different wage index value 
than the CBSA or rural area into which they are designated after the 
application of the 5-percent cap would use a wage index transition 
code. These special codes are five digits in length and begin with 
``50.'' The 50XXX wage index transition codes would be used only in 
specific counties; counties located in CBSAs and rural areas that do 
not correspond to a different transition wage index value will still 
use the CBSA number. For example, FIPS county 13171 Lamar County, GA is 
currently part of CBSA 12060 Atlanta-Sandy Springs-Alpharetta. However, 
for FY 2025 we are proposing that Lamar County would be redesignated 
into the Rural Georgia Code 99911. Because the wage index value of 
rural Georgia is more than a 5-percent decrease from the wage index 
value that Lamar County previously received under CBSA 12060, the FY 
2025 wage index for Lamar County would be capped at 95 percent of the 
FY 2024 wage index value for CBSA 12060. Additionally, because rural 
Georgia can only have one wage index value assigned to code 99911, in 
order for Lamar County to receive the capped wage index for FY 2025, 
transition code 50002 would be used instead of rural Georgia code 
99911.
    Additionally, we are proposing that the 5-percent cap would apply 
to a county that corresponds to a different wage index value than the 
wage index value in the CBSA or rural area in which they are designated 
due to a delineation change until the county's new wage index is more 
than 95 percent of the wage index from the previous fiscal year. We are 
also proposing that in order to capture the correct wage index value, 
the county would continue to use the assigned 50XXX transition code 
until the county's wage index value calculated for the that fiscal year 
using the new OMB delineations is not less than 95 percent of the 
county's capped wage index from the previous fiscal year. Thus, in the 
example mentioned above, Lamar County would continue to use transition 
code 50002 until the wage index in its revised designation of Rural 
Georgia is equal to or more than 95 percent of its wage index value 
from the previous fiscal year. The counties that will require a 
transition code and the corresponding 50XXX codes are shown in Table 8 
and will also be shown in the last column of the FY 2025 hospice wage 
index file.
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C
    The proposed wage index applicable to FY 2025 provides a crosswalk 
between the FY 2025 wage index using the current OMB delineations and 
the FY 2025 wage index using the proposed revised OMB delineations that 
would be in effect in FY 2025 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 proposed CBSA 
number or alternate identification number, and the proposed CBSA name. 
The proposed hospice wage index file applicable for FY 2025 (October 1, 
2024 through September 30, 2025) is available on the CMS website at: 
https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-regulations-and-notices.
3. Proposed FY 2025 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 one 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 hospital market basket percentage increase for 
that FY. In the FY 2022 IPPS final rule, we finalized the rebased and 
revised IPPS market basket to reflect a 2018 base year. We refer 
readers to the FY 2022 IPPS final rule (86 FR 45194) for further 
information.
    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) as projected by the Secretary 
for the 10-year period ending with the applicable FY, year, cost 
reporting period, or other annual period (the ``productivity 
adjustment''). The United States Department of Labor's Bureau of Labor 
Statistics (BLS) publishes the official measures of productivity for 
the United States economy. We note that previously the productivity 
measure referenced in section 1886(b)(3)(B)(xi)(II) of the Act was 
published by BLS as private nonfarm business multifactor productivity. 
Beginning with the November 18, 2021 release of productivity data, BLS 
replaced the term ``multifactor productivity'' with ``total factor 
productivity'' (TFP). BLS noted that this is a change in terminology 
only and would not affect the data or methodology. As a result of the 
BLS name change, the productivity measure referenced in section 
1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as ``private 
nonfarm business total factor productivity.'' However, as mentioned, 
the data and methods are unchanged. We refer readers to https://www.bls.gov for the BLS historical published TFP data. A complete 
description of IGI's TFP projection methodology is available on the CMS 
website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information. In addition, in the FY 2022 IPPS final rule (86 FR 45214), 
we noted that beginning with FY 2022,

[[Page 23800]]

CMS changed the name of this adjustment to refer to it as the 
``productivity adjustment'' rather than the ``MFP adjustment''.
    Consistent with our historical practice, we estimate the market 
basket percentage increase and the productivity adjustment based on IHS 
Global Inc.'s (IGI's) forecast using the most recent available data. 
The proposed hospice payment update percentage for FY 2025 is based on 
the most recent estimate of the inpatient hospital market basket (based 
on IGI's fourth quarter 2023 forecast with historical data through the 
third quarter of 2023). Due to the requirements at sections 
1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of the Act, the proposed 
inpatient hospital market basket percentage increase for FY 2025 of 3.0 
percent is required to be reduced by a productivity adjustment as 
mandated by section 3401(g) of the Affordable Care Act. The proposed 
productivity adjustment for FY 2025 is 0.4 percentage point (based on 
IGI's fourth quarter 2023 forecast). Therefore, the proposed hospice 
payment update percentage for FY 2025 is 2.6 percent. We also propose 
that if more recent data become available after the publication of this 
proposed rule and before the publication of the final rule (for 
example, a more recent estimate of the inpatient hospital market basket 
percentage increase or productivity adjustment), we would use such 
data, if appropriate, to determine the hospice payment update 
percentage in the FY 2025 final rule.
    We continue to believe it is appropriate to routinely update the 
hospice payment system so that it reflects the best available data 
about differences in patient resource use and costs among hospices as 
required by the statute. Therefore, we are proposing to update hospice 
payments using the methodology outlined and apply the 2018-based IPPS 
market basket percentage increase for FY 2025 of 3.0 percent, reduced 
by the statutorily required productivity adjustment of 0.4 percentage 
point along with the wage index budget neutrality adjustment to update 
the payment rates. For the FY 2025 hospice wage index, we are proposing 
to use the FY 2025 pre-floor, pre-reclassified IPPS hospital wage index 
with the proposed revised OMB labor market delineations as its basis.
    In the FY 2022 Hospice Wage Index final rule (86 FR 42532), we 
rebased and revised the labor shares for RHC, CHC, GIP, and IRC using 
Medicare cost report data for freestanding hospices (CMS Form 1984-14, 
OMB Control Number 0938-0758) from 2018. The current labor portion of 
the payment rates are: RHC, 66.0 percent; CHC, 75.2 percent; GIP, 63.5 
percent; and IRC, 61.0 percent. The non-labor portion is equal to 100 
percent minus the labor portion for each level of care. The non-labor 
portion of the payment rates are as follows: RHC, 34.0 percent; CHC, 
24.8 percent; GIP, 36.5 percent; and IRC, 39.0 percent.
4. Proposed FY 2025 Hospice Payment Rates
    There are four payment categories that are distinguished by the 
location and intensity of the hospice 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 care is intended 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 
Service Intensity Add-On (SIA) payment for RHC when direct patient care 
is provided by a registered nurse (RN) or social worker during the last 
seven 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 four hours total) that occurred on the day of service 
if certain criteria are met. To maintain budget neutrality, as required 
under section 1814(i)(6)(D)(ii) of the Act, the new RHC rates were 
adjusted by an SIA budget neutrality factor (SBNF). The SBNF is used to 
reduce the overall RHC rate in order to ensure that SIA payments are 
budget neutral. At the beginning of every FY, SIA utilization is 
compared to the prior year in order calculate a budget neutrality 
adjustment. For FY 2025, the proposed SIA budget neutrality factor is 
1.009 for RHC days 1-60 and 1.000 for RHC days 61+.
    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. For FY 2025 hospice rate 
setting, we are continuing our longstanding policy of using the most 
recent data available. Specifically, we are proposing to use FY 2023 
claims data as of January 11, 2024 for the proposed FY 2025 payment 
rate updates. We note that the budget neutrality factors and payment 
rates will be updated with more complete FY 2023 claims data for the 
final rule. In order to calculate the wage index standardization 
factor, we simulate total payments using FY 2023 hospice utilization 
claims data with the FY 2024 wage index (pre-floor, pre-reclassified 
hospital wage index with the hospice floor, old OMB delineations, and 
the 5-percent cap on wage index decreases) and FY 2024 payment rates 
and compare it to our simulation of total payments using FY 2023 
utilization claims data, the proposed FY 2025 hospice wage index (pre-
floor, pre-reclassified hospital wage index with hospice floor, and the 
revised OMB delineations, with the 5-percent cap on wage index 
decreases) and FY 2024 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 2024 wage index and FY 2024 payment rates for each level 
of care by the FY 2025 wage index and FY 2024 payment 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 
Tables 1 and 2.
    The proposed FY 2025 RHC rates are shown in Table 9. The FY 2025 
payment rates for CHC, IRC, and GIP are shown in Table 10.

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    Sections 1814(i)(5)(A) through (C) of the Act require that hospices 
submit quality data on measures to be specified by the Secretary. In 
the FY 2012 Hospice Wage Index and Rate Update final rule (76 FR 47320 
through 47324), we implemented a Hospice Quality Reporting Program 
(HQRP) as required by those sections. Hospices were required to begin 
collecting quality data in October 2012 and submit those quality data 
in 2013. Section 1814(i)(5)(A)(i) of the Act requires that beginning 
with FY 2014 through FY 2023, the Secretary shall reduce the market 
basket percentage increase by two percentage points for any hospice 
that does not comply with the quality data submission requirements with 
respect to that FY. Section 1814(i)(5)(A)(i) of the Act was amended by 
section 407(b) of Division CC, Title IV of the Consolidated 
Appropriations Act (CAA), 2021 (Pub. L. 116-260) to change the payment 
reduction for failing to meet hospice quality reporting requirements 
from two to four percentage points. Depending on the amount of the 
annual update for a particular year, a reduction of 4 percentage points 
beginning in FY 2024 could result in the annual market basket update 
being less than zero percent for a FY and may result in payment rates 
that are less than payment rates for the preceding FY. We applied this 
policy beginning with the FY 2024 Annual Payment Update (APU), which we 
based on CY 2022 quality data. Therefore, the proposed FY 2025 rates 
for hospices that do not submit the required quality data would be 
updated by -1.4 percent, which is the proposed FY 2025 hospice payment 
update percentage of 2.6 percent minus four percentage points. These 
rates are shown in Tables 11 and 12.

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5. Proposed Hospice Cap Amount for FY 2025
    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. Specifically, we stated that 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. Division CC, section 404 of the CAA, 2021 extended the 
accounting years impacted by the adjustment made to the hospice cap 
calculation until 2030. In the FY 2022 Hospice Wage Index final rule 
(86 FR 42539), we finalized conforming regulations text changes at 
Sec.  418.309 to reflect the provisions of the CAA, 2021. Division P, 
section 312 of the CAA, 2022 (Pub. L. 117-103) amended section 
1814(i)(2)(B) of the Act and extended the provision that mandates the 
hospice cap be updated by the hospice payment update percentage (the 
inpatient hospital market basket percentage increase reduced by the 
productivity adjustment) rather than the CPI-U for accounting years 
that end after September 30, 2016 and before October 1, 2031. Division 
FF, section 4162 of the CAA, 2023 (Pub. L. 118-328) amended section 
1814(i)(2)(B) of the Act and extended the provision that currently 
mandates the hospice cap be updated by the hospice payment update 
percentage (the inpatient hospital market basket percentage increase 
reduced by the productivity adjustment) rather than the CPI-U for 
accounting years that end after September 30, 2016 and before October 
1, 2032. Division G, Section 308 of the Consolidated Appropriations Act 
of 2024 (CAA, 2024) (Pub. L. 118-42)

[[Page 23803]]

extends this provision to October 1, 2033. Before the enactment of this 
provision, the hospice cap update was set to revert to the original 
methodology of updating the annual cap amount by the CPI-U beginning on 
October 1, 2032. Therefore, for accounting years that end after 
September 30, 2016 and before October 1, 2033, the hospice cap amount 
is updated by the hospice payment update percentage rather than the 
CPI-U. As a result of the changes mandated by the CAA, 2024, we propose 
conforming regulation text changes at Sec.  418.309 to reflect the 
revisions at section 1814(i)(2)(B) of the Act.
    The proposed hospice cap amount for the FY 2025 cap year is 
$34,364.85, which is equal to the FY 2024 cap amount ($33,494.01) 
updated by the proposed FY 2025 hospice payment update percentage of 
2.6 percent. We also propose that if more recent data become available 
after the publication of this proposed rule and before the publication 
of the final rule (for example, a more recent estimate of the hospice 
payment update percentage), we would use such data, if appropriate, to 
determine the hospice cap amount in the FY 2025 final rule.

B. Proposed Clarifying Regulation Text Changes

1. Medical Director Condition of Participation
    CMS has broad statutory authority to establish health and safety 
standards for most Medicare- and Medicaid-participating provider and 
supplier types. The Secretary gives CMS the authority to enact 
regulations that are in the interest of the health and safety of 
individuals who are furnished services in an institution, while other 
laws, as outlined below, give CMS the authority to prescribe 
regulations as may be necessary to carry out the administration of the 
program. Section 122 of the Tax Equity and Fiscal Responsibility Act of 
1982 (TEFRA) (Pub. L. 97-248), added section 1861(dd) to the Act to 
provide coverage for hospice care to terminally ill Medicare 
beneficiaries who elect to receive care from a Medicare-participating 
hospice. The CoPs apply to the hospice as an entity, as well as to the 
services furnished to each individual patient under hospice care. In 
accordance with section 1861(dd) of the Act, the Secretary is 
responsible for ensuring that the CoPs are adequate to protect the 
health and safety of the individuals under hospice care.
    Based on feedback from interested parties, including hospice 
providers, national hospice associations, and accrediting 
organizations, we identified discrepancies between the Medical Director 
CoP at Sec.  418.102 and the payment requirements for the 
``certification of the terminal illness'' and the ``admission to 
hospice care'' at Sec.  418.22 and Sec.  418.25, respectively. 
Specifically, the industry questioned the language in the requirements 
as it relates to medical directors in the CoPs, physician designees in 
the CoPs, and physician members of the interdisciplinary group (IDG) in 
the payment requirements. Currently, the medical director provisions in 
the CoPs at Sec. Sec.  418.102(b) and (c) require the medical director 
or physician designee to review the clinical information for each 
patient and provide written certification that it is anticipated that 
the patient's life expectancy is 6 months or less if the illness runs 
its normal course. However, the statutory requirements in section 
1814(a)(7)(A)(i)(II) and (ii) of the Act and the regulatory payment 
requirements at Sec.  418.22 (Certification of terminal illness) 
provide that the medical director of the hospice or the physician 
member of the hospice interdisciplinary group can certify the patient's 
terminal illness. Although the CoP provisions at Sec. Sec.  418.102(b) 
and (c) include requirements for the initial certification and 
recertification of terminal illness, they do not include the physician 
member of the interdisciplinary group among the types of practitioners 
who can provide these certifications, even though these physicians are 
able to certify terminal illness under the payment regulation at Sec.  
418.22 (Certification of terminal illness).
    This misalignment between the CoPs and the payment requirements has 
caused some confusion for hospice providers, accrediting bodies, and 
surveyors. As a result, we determined that conforming changes should be 
proposed to the medical director CoP for clarity and consistency. To 
align the medical director CoP and the hospice payment requirements, we 
propose to amend Sec.  418.102(b) by adding the physician member of the 
hospice interdisciplinary group as defined in Sec.  418.56(a)(1)(i), as 
an individual who may provide the initial certification of terminal 
illness. We also propose to amend the medical director CoP Sec.  
418.102(c) to include the medical director, or physician designee, as 
defined at Sec.  418.3, if the medical director is not available, or 
physician member of the IDG among the specified physicians who may 
review the clinical information as part of the recertification of the 
terminal illness.
    We refer readers to section III.B.2 of this proposed rule for 
additional proposals regarding the payment requirements for the 
certification of the terminal illness and admission to hospice care 
under Sec. Sec.  418.22 and 418.25, which are also intended to align 
the medical director CoP and payment regulations.
2. Certification of Terminal Illness and Admission to Hospice Care
    The Medicare hospice benefit provides coverage for a comprehensive 
set of services described in section 1861(dd)(1) of the Act for 
individuals who are deemed ``terminally ill'' based on a medical 
prognosis that the individual's life expectancy is 6 months or less, as 
described in section 1861(dd)(3)(A) of the Act.
    As such, section 1814(a)(7)(A) of the Act requires the individual's 
attending physician (if the patient designates an attending) and 
hospice medical director or physician member of the hospice 
interdisciplinary group (IDG) to certify in writing at the beginning in 
the first 90-day period of hospice care that the individual is 
``terminally ill'' based on the physician's or medical director's 
clinical judgment regarding the normal course of the individual's 
illness. In a subsequent 90- or 60-day period of hospice care, only the 
hospice medical director or the physician member of the IDG is required 
to recertify at the beginning of the period that the patient is 
terminally ill based on such clinical judgment.
    The Conditions of Participation (CoP) at Sec.  418.102 state that 
``when the medical director is not available, a physician designated by 
the hospice assumes the same responsibilities and obligations as the 
medical director.'' The term ``physician designee'' was utilized in the 
1983 hospice final rule (48 FR 56029) that implemented the Medicare 
hospice benefit when describing who can establish and review the 
hospice plan of care and was later defined and finalized in the 2008 
hospice final rule (73 FR 32093) in response to comments requesting CMS 
clarify this individual's role. Section 418.3 defines ``physician 
designee'' to mean a doctor of medicine or osteopathy designated by the 
hospice who assumes the same responsibilities and obligations as the 
medical director when the medical director is not available. Currently, 
the requirements at Sec.  418.22(c), Sources of Certification, state 
that for the initial 90-day period, the hospice must obtain written 
certification statements from the

[[Page 23804]]

medical director of the hospice or the physician member of the IDG and 
the individual's attending physician if the individual has an attending 
physician. For subsequent periods, only the ``medical director of the 
hospice or the physician member of the interdisciplinary group'' must 
certify terminal illness. Similarly, the requirements at Sec.  
418.22(b), Content of Certification, only include the ``medical 
director of the hospice'' or the ``physician member of the hospice 
interdisciplinary group'' when referencing the clinical judgment on 
which the certification must be based. Additionally, Sec.  418.25, 
Admission to Hospice Care, only refers to the recommendation of the 
hospice medical director (in consultation with the patient's attending 
physician (if any)) when determining admission to hospice and when 
reaching a decision to certify that the patient is terminally ill. In 
order to align Sec. Sec.  418.22(b) and 418.25 with the CoPs at Sec.  
418.102, we propose to add ``physician designee (as defined in Sec.  
418.3)'' to clarify that when the medical director is not available, a 
physician designated by the hospice, who is assuming the same 
responsibilities and obligations as the medical director, may certify 
terminal illness and determine admission to hospice care. We are 
clarifying that this does not connote a change in policy; rather we 
believe aligning the language at Sec. Sec.  418.22(b) and 418.25 with 
the CoPs at Sec.  418.102 allows for greater clarity and consistency 
between key components of hospice regulations and policies.
3. Election of Hospice Care
    A distinctive characteristic of the Medicare hospice benefit is 
that it requires a patient (or their representative) to intentionally 
choose hospice care by electing the benefit. As part of the election 
required by Sec.  418.24, a beneficiary (or their representative) must 
file an ``election statement'' with the hospice, which must include an 
acknowledgement that they fully understand the palliative, rather than 
curative, nature of hospice care as it relates to the individual's 
terminal illness and related conditions, as well as other requirements 
as set out at Sec.  418.24(b). Additionally, as set out at Sec.  
418.24(f), when electing the hospice benefit, an individual waives all 
rights to Medicare payment for any care for the terminal illness and 
related conditions except for services provided by the designated 
hospice, another hospice under arrangement with the designated hospice, 
and the individual's attending physician if that physician is not an 
employee of the designated hospice or receiving compensation from the 
hospice for those services. Because of this waiver, this means that the 
designated hospice is the only provider to which Medicare payment can 
be made for services related to the terminal illness and related 
conditions for the patient; providers other than the designated 
hospice, a hospice under arrangement with the designated hospice, or 
the individual's attending physician cannot receive payment for 
services to a hospice beneficiary unless those services are unrelated 
to the terminal illness and related conditions when a patient is under 
a hospice election.
    In the FY 2015 Hospice Wage Index and Payment Rate Update final 
rule (79 FR 50452, 50478), we finalized a requirement that a Notice of 
Election (NOE) must be filed with the hospice Medicare Administrative 
Contractor (MAC) within five calendar days after the effective date of 
hospice election. If the NOE is filed beyond this timeframe, 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 
50478). Also, because non-hospice providers may be unaware of a hospice 
election, late filing of the NOE leaves Medicare vulnerable to paying 
non-hospice claims related to the terminal illness and related 
conditions when these services are furnished by these non-hospice 
providers. Moreover, beneficiaries may potentially be liable for any 
associated cost-sharing they would not have incurred if these services 
were furnished by the hospice provider.
    When discussing hospice election, stakeholders (such as Medicare 
contractors, medical reviewers, and hospices) often conflate the terms 
``election statement'' and ``NOE.'' Further, we have received recent 
inquiries requesting clarification on timeframe requirements for both 
the election statement and the NOE that indicate confusion between such 
documents. Upon review of this regulation, we believe the organization 
at Sec.  418.24 does not make it clear that these are two separate and 
distinct documents intended for separate purposes under the benefit. We 
propose to reorganize the language in this section to clearly denote 
the differences between the election statement and the NOE. That is, we 
are proposing to title Sec.  418.24(b) as ``Election Statement'' and 
would include the title ``Notice of Election'' at Sec.  418.24(e). By 
clearly titling this section, the requirements for the election 
statement and the notice of election would be distinguished from one 
another, mitigating any confusion between the two documents. These 
changes align with existing subregulatory guidance. This reorganization 
would not be a change in policy, rather it is intended to more clearly 
identify the requirements for the election statement and the NOE by 
reorganizing the structure of the regulations. We believe this 
reorganization is important to ensure that stakeholders fully 
understand that the election statement is required as acknowledgement 
of a beneficiary's understanding of the decision to elect hospice and 
filed with the hospice, whereas the NOE is required for claims 
processing purposes and filed with the hospice MAC within five calendar 
days after the effective date of the election statement.
    We invite comments on the clarifying regulation text changes and 
reorganization as described in sections II.B. of this proposed rule.
    Finally, the MACs have informed us of ongoing instances of hospices 
omitting certain elements of the hospice election statement. A complete 
election statement containing all required elements as set forth at 
Sec.  418.24(b) is a condition for payment. Additionally, we emphasize 
the importance of each element in informing the beneficiary of their 
coverage when choosing to elect the Medicare hospice benefit. We 
continue to encourage hospice agencies to utilize the ``Model Example 
of Hospice Election Statement'' on the hospice web page at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice to limit 
potential claims denials.

C. Request for Information (RFI) on Payment Mechanism for High 
Intensity Palliative Care Services

    We define hospice care as a set of comprehensive services described 
in section 1861(dd)(1) of the Act, identified and coordinated by an 
interdisciplinary group (IDG) to provide for the physical, 
psychosocial, spiritual, and emotional needs of a terminally ill 
patient and/or family members, as delineated in a specific patient plan 
of care (Sec.  418.3). Hospice care changes the focus of a patient's 
illness to comfort care (palliative care) for pain relief and symptom 
management from a curative type of care. Under the hospice benefit, 
palliative care is defined as patient and family centered care that 
optimizes quality of life by anticipating, preventing, and treating 
suffering (Sec.  418.3). Palliative care throughout the continuum of 
illness involves addressing physical, intellectual, emotional, social, 
and spiritual needs

[[Page 23805]]

and facilitating patient autonomy, access to information, and choice. 
CMS continually works to ensure access to quality hospice care for all 
eligible Medicare beneficiaries by establishing, refining, readapting, 
and reinforcing policies to improve the value of care at the end of 
life for these beneficiaries. That is, we seek to strengthen the notion 
that in order to provide the highest level of care for hospice 
beneficiaries, we must provide ongoing focus to those services that 
enforce CMS' definitions of hospice and palliative care and eliminate 
any barriers to accessing hospice care.
    Adequate care under the hospice benefit has consistently been 
associated with symptom reduction, less intensive care, decreased 
hospitalizations, improved outcomes from caregivers, lower overall 
costs, and higher alignment with patient preferences and family 
satisfaction.\4\ Although hospice use has grown considerably since the 
inception of the Medicare hospice benefit in 1983, there are still 
barriers that terminally ill and hospice benefit eligible beneficiaries 
may face when accessing hospice care. Specifically, the national trends 
\5\ that examine hospice enrollment and service utilization for those 
beneficiary populations with complex palliative needs and potentially 
high-cost medical care needs reveal that there may be an underuse of 
the hospice benefit, despite the demonstrated potential to both improve 
quality of care and lower costs.\6\
---------------------------------------------------------------------------

    \4\ Obermeyer Z, Makar M, Abujaber S, Dominici F, Block S, 
Cutler DM. Association Between the Medicare Hospice Benefit and 
Health Care Utilization and Costs for Patients With Poor-Prognosis 
Cancer. JAMA. 2014;312(18):1888-1896. doi:10.1001/jama.2014.14950.
    \5\ Wachterman MW, Hailpern SM, Keating NL, Kurella Tamura M, 
O'Hare AM. Association Between Hospice Length of Stay, Health Care 
Utilization, and Medicare Costs at the End of Life Among Patients 
Who Received Maintenance Hemodialysis. JAMA Intern Med. 2018 Jun 
1;178(6):792-799. doi: 10.1001/jamainternmed.2018.0256. PMID: 
29710217; PMCID: PMC5988968.
    \6\ Meier DE. Increased access to palliative care and hospice 
services: opportunities to improve value in health care. Milbank Q. 
2011Sep;89(3):343-80. doi: 10.1111/j.1468-0009.2011.00632.x. PMID: 
21933272; PMCID:PMC3214714.
---------------------------------------------------------------------------

    There is a subset of hospice eligible beneficiaries that would 
likely benefit from receiving palliative, rather than curative, 
chemotherapy, radiation, blood transfusions, and dialysis. Anecdotally, 
we have heard from beneficiaries and families their understanding that 
upon election of the hospice benefit, certain therapies such as 
dialysis, chemotherapy, radiation, and blood transfusions are not 
available to them, even if such therapies would provide palliation for 
their symptoms. Generally, these patients report that they have been 
told by hospices that Medicare does not allow for the provision of 
these types of treatments upon hospice election. While these types of 
treatments are not intended to cure the patient's terminal illness, 
some practitioners, with input from the hospice IDG, may determine 
that, for some patients, these adjuvant treatment modalities would be 
beneficial for symptom control. In such instances, these palliative 
treatments would be covered under the hospice benefit because they are 
not intended to be curative. In the FY 2024 Hospice Final Rule (88 FR 
51168), we noted in response to our RFI on hospice utilization; non-
hospice spending; ownership transparency; and hospice election 
decision-making, that commenters stated providing complex palliative 
treatments and higher intensity levels of hospice care may pose 
financial risks to hospices when enrolling such patients. Commenters 
stated that the current bundled per diem payment is not reflective of 
the increased expenses associated with higher-cost and certain patient 
subgroups. As we continue to focus on improved access and value within 
the hospice benefit, we are soliciting public comment on the following 
questions:
     What could eliminate the financial risk commenters 
previously noted when providing complex palliative treatments and 
higher intensity levels of hospice care?
     What specific financial risks or costs are of particular 
concern to hospices that would prevent the provision of higher-cost 
palliative treatments when appropriate for some beneficiaries? Are 
there individual cost barriers which may prevent a hospice from 
providing higher-cost palliative care services? For example, is there a 
cost barrier related to obtaining the appropriate equipment (for 
example, dialysis machine)? Or is there a cost barrier related to the 
treatment itself (for example, obtaining the necessary drugs or access 
to specialized staff)?
     Should there be any parameters around when palliative 
treatments should qualify for a different type of payment? For example, 
we are interested in understanding from hospices who do provide these 
types of palliative treatments whether the patient is generally in a 
higher level of care (CHC, GIP) when the decision is made to furnish a 
higher-cost palliative treatment? Should an additional payment only be 
applicable when the patient is in RHC?
     Under the hospice benefit, palliative care is defined as 
patient and family centered care that optimizes quality of life by 
anticipating, preventing, and treating suffering (Sec.  418.3). In 
addition to this definition of palliative care, should CMS consider 
defining palliative services, specifically regarding high-cost 
treatments? Note, CMS is not seeking a change to the definition of 
palliative care but rather should CMS consider defining palliative 
services with regard to high-cost treatments?
     Should there be documentation that all other palliative 
measures have been exhausted prior to billing for a payment for a 
higher-cost treatment? If so, would that continue to be a barrier for 
hospices?
     Should there be separate payments for different types of 
higher-cost palliative treatments or one standard payment for any 
higher-cost treatment that would exceed the per-diem rate?

D. Proposals to the Hospice Quality Reporting Program (HQRP)

1. Background and Statutory Authority
    The Hospice Quality Reporting Program (HQRP) specifies reporting 
requirements for the Hospice Item Set (HIS), administrative data, and 
Consumer Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Hospice Survey. Section 1814(i)(5) of the Act requires the Secretary to 
establish and maintain a quality reporting program for hospices, and 
requires, beginning with FY 2014, that the Secretary reduce the market 
basket update by 2 percentage points. Section 1814(i)(5)(A)(i) of the 
Act was amended by section 407(b) of Division CC, Title IV of the CAA, 
2021 to change the payment reduction for failing to meet hospice 
quality reporting requirements from 2 to 4 percentage points beginning 
in FY 2024 for any hospice that does not comply with the quality data 
submission requirements for that FY. In the FY 2024 Hospice final rule, 
we codified the application of the 4-percentage point payment reduction 
for failing to meet hospice quality reporting requirements and set 
completeness thresholds at Sec.  418.312(j).
    Depending on the amount of the annual update for a particular year, 
a reduction of 4 percentage points beginning in FY 2024 could result in 
the annual market basket update being less than zero percent for a FY 
and may result in payment rates that are less than payment rates for 
the preceding FY. Any reduction based on failure to comply with the 
reporting requirements, as required by section 1814(i)(5)(B) of the

[[Page 23806]]

Act, would apply only for the specified year. Typically, about 18 
percent of Medicare-certified hospices are found non-compliant with the 
HQRP reporting requirements annually and are subject to the APU payment 
reduction for a given FY.
    In the FY 2014 Hospice Wage Index and Payment Rate Update final 
rule (78 FR 48234, 48257 through 48262), and in compliance with section 
1814(i)(5)(C) of the Act, we finalized a new standardized patient-level 
data collection vehicle called the Hospice Item Set (HIS). We also 
finalized the specific collection of data items that support eight 
consensus-based entity (CBE)-endorsed measures for hospice.
    In the FY 2015 Hospice Wage Index and Payment Rate Update final 
rule (79 FR 50452), we finalized national implementation of the 
CAHPS[supreg] Hospice Survey, a component of the CMS HQRP which is used 
to collect data on the experiences of hospice patients and the primary 
caregivers listed in their hospice records. Readers who want more 
information about the development of the survey, originally called the 
Hospice Experience of Care Survey, may refer to the FY 2014 and FY 2015 
Hospice Wage Index and Payment Update final rules (78 FR 48261 and 79 
FR 50452, respectively). National implementation commenced January 1, 
2015. We adopted eight CAHPS[supreg] survey-based measures for the CY 
2018 data collection period and for subsequent years. These eight 
measures are publicly reported on the Care Compare website.
    In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47142, 47186 through 47188), we finalized the policy for retention of 
HQRP measures adopted for previous payment determinations and seven 
factors for removal. In that same final rule, we discussed how we would 
provide public notice through rulemaking of measures under 
consideration for removal, suspension, or replacement. We also stated 
that if we had reason to believe continued collection of a measure 
raised potential safety concerns, we would take immediate action to 
remove the measure from the HQRP and not wait for the annual rulemaking 
cycle. The measures would be promptly removed and we would immediately 
notify hospices and the public of such a decision through the usual 
HQRP communication channels, including but not limited to listening 
sessions, email notifications, Open Door Forums, and Web postings. In 
such instances, the removal of a measure will be formally announced in 
the next annual rulemaking cycle.
    On August 31, 2020, we added correcting language to the FY 2016 
Hospice Wage Index and Payment Rate Update and Hospice Quality 
Reporting Requirements; Correcting Amendment (85 FR 53679) hereafter 
referred to as the FY 2021 HQRP Correcting Amendment. In this final 
rule, we made correcting amendments to 42 CFR 418.312 to correct 
technical errors identified in the FY 2016 Hospice Wage Index and 
Payment Rate Update final rule. Specifically, the FY 2021 HQRP 
Correcting Amendment (85 FR 53679) adds paragraph (i) to Sec.  418.312 
to reflect our exemptions and extensions requirements, which were 
referenced in the preamble but inadvertently omitted from the 
regulations text. Thus, these exemptions or extensions can occur when a 
hospice encounters certain extraordinary circumstances.
    In the FY 2017 Hospice Wage Index and Payment Rate Update final 
rule, we finalized the ``Hospice Visits When Death'' is Imminent 
measure pair (HVWDII, Measure 1 and Measure 2), effective April 1, 
2017. We refer the public to the FY 2017 Hospice Wage Index and Payment 
Rate Update final rule (81 FR 52144, 52163 through 52169) for a 
detailed discussion.
    As stated in the FY 2019 Hospice Wage Index and Rate Update final 
rule (83 FR 38622, 38635 through 38648), we launched the Meaningful 
Measures initiative (which identifies high priority areas for quality 
measurement and improvement) to improve outcomes for patients, their 
families, and providers while also reducing burden on clinicians and 
providers. The Meaningful Measures initiative is not intended to 
replace any existing CMS quality reporting programs, but will help such 
programs identify and select individual measures. The Meaningful 
Measure Initiative areas are intended to increase measure alignment 
across our quality programs and other public and private initiatives. 
Additionally, it will point to high priority areas where there may be 
gaps in available quality measures while helping to guide our efforts 
to develop and implement quality measures to fill those gaps. More 
information about the Meaningful Measures Initiative can be found at: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
    In the FY 2022 Hospice Wage Index and Payment Rate Update final 
rule (86 FR 42552), we finalized two new measures using claims data: 
(1) Hospice Visits in the Last Days of Life (HVLDL); and (2) Hospice 
Care Index (HCI). We also removed the Hospice Visits when Death is 
Imminent (HVWDII) measure, as it was replaced by HVLDL. We also 
finalized a policy that claims-based measures would use 8 quarters of 
data to publicly report on more hospices.
    In addition, we removed the seven Hospice Item Set (HIS) Process 
Measures from the program as individual measures, and ceased their 
public reporting because, in our view, the HIS Comprehensive Assessment 
Measure is sufficient for measuring care at admission without the seven 
individual process measures. In the FY 2022 Hospice Wage Index and Rate 
Update final rule (86 FR 42553), we finalized Sec.  418.312(b)(2), 
which requires hospices to provide administrative data, including 
claims-based measures, as part of the HQRP requirements for Sec.  
418.306(b). In that same final rule, we provided CAHPS Hospice Survey 
updates.
    As finalized in the FY 2022 Hospice Wage Index and Payment Rate 
Update final rule (86 FR 42552), public data reflecting hospices' 
reporting of the two new claims-based quality measures (QMs), the 
``Hospice Visits in Last Days of Life'' (HVLDL) and the ``Hospice Care 
Index'' (HCI) measures, are available on the Care Compare/Provider Data 
Catalogue (PDC) web pages as of the August 2022 refresh. In the FY 2023 
and FY 2024 Hospice Wage Index final rules, we did not propose any new 
quality measures. However, we provided updates on already-adopted 
measures. Table 13 shows the current quality measures in effect for the 
FY 2025 HQRP, which were finalized in the FY 2022 Hospice Wage Index 
and Payment Rate Update final rule and have been carried over in each 
subsequent year.
BILLING CODE 4120-01-P

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[GRAPHIC] [TIFF OMITTED] TP04AP24.023

BILLING CODE 4120-01-C
2. Proposal To Implement Two Process Quality Measures Based on Proposed 
HOPE Data Collection
    Section 1814(i)(5) of the Act requires the Secretary to establish 
and maintain a quality reporting program for hospices, develop and 
implement quality measures, and publicly report quality measures. In 
this proposed rule, we propose adding two process measures no sooner 
than CY 2027 to the HQRP calculated from data collected from HOPE: 
Timely Reassessment of Pain Impact and Timely Reassessment of Non-Pain 
Symptom Impact. We propose to use the data collected from HOPE (see 
section III. D on the proposal to implement HOPE and associated PRA), 
which a nurse would assess at multiple time points during a hospice 
stay to collect data related to patients' symptoms during those 
assessments. We propose these two measures would determine whether a 
follow-up visit occurs within 48 hours of an initial assessment of 
moderate or severe symptom impact.
    Symptom alleviation is an important aspect of hospice care, 
including both pain management and non-pain symptom management. CMS has 
heard this feedback consistently from both clinicians and caregivers, 
including the Technical Expert Panel (TEP) which CMS convened from 2019 
through 2023. At present, HQRP only has a component of a measure 
indicating whether the pain symptom was assessed, as a part of the 
comprehensive assessment at admission measure. This measure alone does 
not adequately measure whether hospices are alleviating hospice 
patients' symptoms throughout their hospice stay.
    CMS considers symptom management an important domain to address 
further.

[[Page 23808]]

Therefore, we propose these new concepts on timely reassessment of 
symptoms with the support and input of hospice experts. For cases where 
a patient is assessed as having high (that is, more severe) symptom 
impact, practitioners suggest that good care processes include trying 
to follow-up with the patient and having in-person visits/reassessment 
within 48 hours to ensure treatment has helped alleviate and/or manage 
those symptoms. Therefore, we are proposing two process measures 
derived from HOPE data--Timely Reassessment of Pain Impact and Timely 
Reassessment of Non-Pain Symptom Impact--would capture these care 
processes.
    Our paramount concern is the successful development of an HQRP that 
promotes the delivery of high-quality healthcare services. We seek to 
adopt measures for the HQRP that promote efficient and safer care. Our 
measure selection activities for the HQRP take into consideration input 
we receive from the CBE, as part of a pre-rulemaking process that we 
have established and are required to follow under section 1890A of the 
Act. The CBE convenes interested parties from multiple groups to 
provide CMS with recommendations on the Measures Under Consideration 
(MUC) list. This input informs how CMS selects certain categories of 
quality and efficiency measures as required by section 1890A(a)(3) of 
the Act. By February 1st of each year, the CBE must provide that input 
to CMS. For more details about the pre-rulemaking process, please visit 
the Partnership for Quality Measurement website at https://p4qm.org/PRMR.
    We also take into account national priorities, such as those 
established by the Partnership for Quality Measurement, the HHS 
Strategic Plan, and the National Strategy for Quality Improvement in 
Healthcare located at https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/quality03212011a. To the extent possible, 
we have sought to adopt measures that have been endorsed by the 
national CBE, recommended by multiple organizations of interested 
parties, and developed with the input of providers, payers, and other 
relevant stakeholders.
a. Measure Importance
    The FY 2019 Hospice Wage Index final rule (83 FR 38622) introduced 
the Meaningful Measure Initiative to hospice providers to identify high 
priority areas for quality measurement and improvement. The Meaningful 
Measure Initiative areas are intended to increase measure alignment 
across programs and other public and private initiatives. Additionally, 
the initiative points to high priority areas where there may be 
informational gaps in available quality measures. The initiative helps 
guide our efforts to develop and implement quality measures to fill 
those gaps and develop those concepts towards quality measures that 
meet the standards for public reporting. The goal of HQRP quality 
measure development is to identify measures from a variety of data 
sources that provide a window into hospice care services throughout the 
dying process, fit well with the hospice business model, and meet the 
objectives of the Meaningful Measures initiative.
    To that end, the proposed Timely Reassessment of Pain Impact and 
Timely Reassessment of Non-Pain Symptom Impact measures will add value 
to HQRP by filling an identified informational gap in the current 
measure set. Specifically, the proposed Timely Reassessment of Pain 
Impact process measure will determine how many patients assessed with 
moderate or severe pain impact were reassessed by the hospice within 
two calendar days, and the proposed Timely Reassessment of Non-Pain 
Symptom Impact process measure will determine how many patients 
assessed with moderate or severe non-pain impact were reassessed by the 
hospice within two calendar days. Compared to the single existing HQRP 
measure that includes pain symptom assessment, the two proposed HOPE-
based process measures will better reflect hospices' efforts to 
alleviate patients' symptoms on an ongoing basis.
b. Proposed Specifications of the Measures
    We proposed that both the process measures based on HOPE data will 
be calculated using assessments collected at admission or the HOPE 
Update Visit (HUV) timepoints. Pain symptom severity and impact will be 
determined based on hospice patients' responses to the pain symptom 
impact data elements within HOPE. Non-pain symptom severity and impact 
will be determined based on patients' responses to the HOPE data 
elements related to shortness of breath, anxiety, nausea, vomiting, 
diarrhea, constipation, and agitation. Additional information regarding 
these data items and time points can be found in the draft HOPE 
Guidance Manual of the HOPE web page at https://www.cms.gov/medicare/quality/hospice/hope and the PRA package that accompanies this proposed 
rule can be accessed at https://www.cms.gov/medicare/regulations-guidance/legislation/paperwork-reduction-act-1995/pra-listing. We 
propose that only in-person visits would count for the collection of 
data for these proposed measures--that is, telehealth calls would not 
count for a reassessment. We seek comment on whether only in-person 
visits are appropriate for collection of data for these proposed 
measures or if other types of visits, such as telehealth, should be 
included. We propose that a follow-up visit cannot be the same visit as 
the initial assessment, but it can occur later in the same day (as a 
separate visit).
    For both the proposed Timely Reassessment of Pain Impact and 
proposed Timely Reassessment of Non-Pain Symptom Impact measures, we 
propose beneficiaries will be included in the denominator if they have 
a moderate or severe level of pain or non-pain symptom impact, 
respectively, at their initial assessment. However, we proposed that 
certain exclusions will apply to these denominators, such as 
beneficiaries who die or are discharged alive before the two-day 
window, if the patient/caregiver refused the reassessment visit, the 
hospice was unable to contact the patient/caregiver to perform the 
reassessment, the patient traveled outside the service area, or the 
patient was in the ER/hospital during the two-day follow-up window. In 
these situations, we propose that a hospice would be unable to conduct 
a reassessment due to circumstances beyond their control, and therefore 
these situations will not be included in the measure denominator.
    We propose the numerators for these measures will reflect 
beneficiaries who did receive a timely symptom re-assessment. These 
will include beneficiaries who receive a separate HOPE reassessment 
within two calendar days of the initial assessment (for example, if a 
pain has moderate or severe symptoms assessed on Sunday, the hospice 
would be expected to complete the reassessment on or before Tuesday).
c. Measure Reportability, Variability, and Validity
    As part of developing these quality measures, CMS and their measure 
development contractor conducted simulations of measure reportability 
rates and measure variability. We used the results of the HOPE Beta 
Test to estimate HOPE data availability for a national population of 
hospice patients. Detailed information regarding reportability and 
variability testing is provided in the HOPE Beta Testing Report, 
available on the HOPE web page at https://www.cms.gov/medicare/

[[Page 23809]]

quality/hospice/hope. Additionally, CMS assessed each proposed quality 
measure face validity with input from TEP members convened in March 
2023. Further information about our validity analysis is provided in 
the 2022-2023 HQRP TEP Report, available in the Downloads section of 
the HQRP Provider and Stakeholder Engagement page. Our reportability 
and variability analyses did not present concerns for the proposed 
HOPE-based process measures, and our validity analysis indicated that 
the proposed measures have high face validity.
d. Future Plans for Testing HOPE-Based Quality Measures
    Testing of the two proposed process quality measures has thus far 
relied on data from the HOPE beta (field) test. We propose future 
measure testing to be conducted using a full sample of hospices 
collected after HOPE has been implemented nationally, to support 
further development of quality measures.
e. Public Engagement and Support
    CMS engaged the public in multiple stages of HOPE-based measure 
development. To support measure development, CMS convened multiple 
technical expert panel (TEP) meetings which served as information 
gathering activities, consistent with the Meaningful Measure 
Initiative. The TEP consisted of experts in hospice and clinical 
quality measurement, and it has contributed to development of the HOPE 
tool and measure concepts since 2019. Based on early TEP input about 
measure prioritization, measure concept development focused on pain and 
non-pain symptoms. TEP members noted the importance of measuring the 
quality of pain and symptom management, as this is a key role of 
hospice. Through 2020 and 2021, the TEP provided further feedback on 
pain and non-pain symptom measure specifications. In Spring 2023, CMS 
convened the TEP a final time to review the final measure 
specifications, HOPE Beta test results, and rate face validity of the 
measure score. The TEP gave strong support for the proposed measure 
specifications, rated high face validity for these two process 
measures, and noted the importance of measuring the quality of pain 
management in hospice care. More information about the TEP meetings and 
recommendations can be found in the HQRP TEP Reports for 2019-2023, 
available on the Provider and Stakeholder Engagement web page. CMS also 
sought hospice provider input during the HOPE Beta Test to further 
inform the development of these HOPE-based process measures. During 
beta testing, registered nurses (RNs) reported that the two-day window 
of HOPE symptom reassessment aligned with their usual practices. In 
this proposed rule, we solicit public comments on these two process 
measures.
f. Update on Future Quality Measure (QM) Development
    As stated in the FY 2022 Hospice Wage Index final rule (86 FR 
42528), we continue to consider developing hybrid quality measures that 
could be calculated from multiple data sources, such as claims, HOPE 
data, or other data sources (for example, CAHPS Hospice Survey). To 
support new measure development, our contractor convened technical 
expert panel (TEP) meetings in 2022 and 2023. The TEP agreed that CMS 
should consider applying several risk adjustment factors, such as age 
and diagnosis, to ensure comparable, representative comparisons between 
hospices. The TEP also suggested using length of hospice stay but not 
functional status as risk adjustment factor for hospice performance.
    To support new HOPE-based measure development, our contractor 
convened technical expert panel (TEP) meetings between 2020 and 2023. 
The TEP recommended specifications for the two HOPE-based quality 
measures proposed in this Rule--Timely Reassessment of Pain Impact and 
Timely Reassessment of Non-Pain Symptom Impact. CMS also sought TEP 
input on several measurement concepts proposed for future quality 
measure development. Of these measurement concepts, the TEP supported 
CMS further developing the Education for Medication Management and 
Wound Management Addressed in Plan of Care process concepts. More 
information about the TEP recommendations can be found in the 2023 HQRP 
TEP Report, available on the Provider and Stakeholder Engagement web 
page. CMS will take the TEP's recommendations under consideration as we 
continue to develop HOPE-based quality measures.
    Additional information about CMS's HOPE-based measure development 
efforts is available in the 2022-2023 HQRP TEP Summary Report (https://www.cms.gov/files/document/2023-hqrp-tep-summary-report.pdf and the 
2023 Information Gathering Report, available on the HQRP Provider and 
Stakeholder Engagement web page, or at https://www.cms.gov/files/document/hospicequalityreportingprograminformationgatheringreport2023508.pdf. 
For further details about the ongoing development of these measures, 
please visit the Partnership for Quality Measurement website: https://p4qm.org/ org/.
3. Proposal To Implement the Hospice Outcomes & Patient Evaluation 
(HOPE) Assessment Instrument
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
The data must be submitted in a form, manner, and at a time specified 
by the Secretary.
    CMS has developed a new standardized patient level data collection 
tool, the Hospice Outcomes & Patient Evaluation or HOPE. In past rules, 
we have described this as a new collection tool, however we believe it 
is better characterized as a modification of, and functional 
replacement for, the existing HIS structure.
    We propose to begin collecting the HOPE standardized patient level 
data collection tool on or after October 1, 2025, for proposed quality 
measures discussed in section 2. We propose that the HOPE assessment 
instrument would replace the HIS upon implementation, as discussed in 
section III. D6(b). In the FY 2020 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements final rule (84 FR 
38484), we finalized the instrument name and discussed the primary 
objectives for HOPE. Specifically, HOPE would provide data for the HQRP 
quality measures and its requirements through standardized data 
collection; and provide additional clinical data that could inform 
future payment refinements. All data collected by the instrument are 
expected to be used for quality measures, as authorized under 
section1814(i)(5)(C) of the Act, and only for quality measures under 
section1814(i)(5)(D), of the Act, which will include the measures 
Timely Reassessment of Pain Impact and Timely Reassessment of Non-Pain 
Symptom Impact measures proposed in this Rule.
    HOPE would be a component of implementing high-quality and safe 
hospice care for patients, Medicare beneficiaries and non-beneficiaries 
alike. HOPE would also contribute to the patient's plan of care through 
providing patient data throughout the hospice stay. We propose to 
collect data from multiple time points across the hospice stay, that 
would inform hospice providers potentially resulting in improved 
practice and care quality. Additional information about the draft HOPE 
tool and the data elements included therein are available at https://www.cms.gov/medicare/quality/hospice/hope discussed in the

[[Page 23810]]

Paperwork Reduction Act submission for this collection (CMS-10390).
    We stated in the FY 2022 Hospice Wage Index and Payment Update 
final rule (86 FR 42528) that while the standardized patient assessment 
data elements for certain post-acute care providers required under the 
IMPACT Act of 2014 are not applicable to hospices, it would be 
reasonable to include some of those standardized elements that could 
appropriately and feasibly apply to hospice to the extent permitted by 
our statutory authority. Many patients move through other providers 
within the healthcare system to hospice. Therefore, considering 
tracking key demographic and social risk factor items that apply to 
hospice could support our goals for continuity of care, overall patient 
care and well-being, development of infrastructure for the 
interoperability of electronic health information, and health equity 
which is also discussed in this proposed rule. CMS will propose any 
additions of standardized elements in future rulemaking.
    In the FY 2023 Hospice Final Rule (87 FR 45669), we outlined the 
testing phases HOPE has undergone, including cognitive, pilot, alpha 
testing, and national beta field testing. National beta testing, 
completed at the end of October 2022, allowed us to obtain input from 
participating hospice teams about the assessment instrument and field 
testing to refine and support the final draft items and time points for 
HOPE. It also allowed us to estimate the time to complete the HOPE 
elements and establish the interrater reliability of each item. For 
additional details and results from HOPE testing, see the HOPE Testing 
Report, available in the Downloads section of the HOPE page of the HQRP 
website.
    We propose to adopt and implement HOPE as a standardized patient 
element set to replace the current Hospice Item Set (HIS). HOPE v1.0 
would contain demographic, record processing, and patient-level 
standardized data elements that would be collected by all Medicare-
certified hospices for all patients over the age of 18, regardless of 
payer source, to support HQRP quality measures. We propose new HOPE 
data elements that are collected in real-time to assess patients based 
on the hospice's interactions with the patient and family/caregiver, 
accommodate patients with varying clinical needs, and provide 
additional information to contribute to the patient's care plan 
throughout the hospice stay (not just at admission and discharge). 
These data elements represent domains such as Administrative, 
Preferences for Customary Routine Activities, Active Diagnoses, Health 
Conditions, Medications, and Skin Conditions. We propose that HOPE data 
would be collected by hospice staff for each patient admission at three 
distinct time points: admission, the hospice update visit (HUV), and 
discharge, as discussed in the PRA as well as sections IV. A of this 
proposed rule in which we discuss Collection of Information 
requirements and the Regulatory Impact Analysis. We propose the 
timepoint for the HOPE Update Visits (HUV), which is dependent on the 
patient's length of stay (LOS), is limited to a subset of HOPE items 
addressing clinical issues important to the care of hospice patients as 
updates to the hospice plan of care. We propose that HOPE data be 
collected at these timepoints during the hospice's routine clinical 
assessments, based on unique patient assessment visits and additional 
follow-up visits as needed. As further discussed in the proposed draft 
HOPE Guidance Manual and PRA, not all HOPE items would be required to 
be completed at every timepoint. These proposed time points could also 
be revised in future rulemaking.
    We propose that HOPE data collection would be effective beginning 
on or after October 1, 2025 to support the proposed quality measures 
anticipated for public reporting on or after CY 2027. After HOPE 
implementation, hospices would no longer need to collect and submit the 
Hospice Item Set (HIS). Additional details regarding the data 
collection required for the new HOPE item set are discussed below in 
section III. D6, Form, Manner, and Timing of Quality Measure Data 
Submission, and section IV., Collection of Information.
    We propose to update Sec.  418.312(a)(b)(1) to require hospices to 
complete and submit a standardized set of items for each patient to 
capture patient-level data, regardless of payer or patient age. This 
proposed change is intended to take effect October 1, 2025. This update 
will replace the previous requirement for hospices to complete the HIS 
and the newly standardized set of items would have to be completed at 
admission and discharge, and at the two HUV timepoints within the first 
30 days after the hospice election. We note that, as authorized under 
section1814(i)(5) of the Act, CMS would impose a 4 percent reduction on 
hospices for failure to submit HOPE collections timely with respect to 
that FY.
    CMS is committed to ensuring hospices are ready for the proposed 
data collection beginning on or after October 1, 2025. We propose to 
provide information about upcoming provider trainings related to HOPE 
v1.0 that will be posted on the CMS HQRP website on the Announcement 
and Spotlight page and announced during Open Door Forums. Past 
trainings about the HQRP are available through the HQRP Training and 
Education Library. These trainings will help providers understand the 
requirements necessary to be successful with the HQRP, including how 
data collected via the new draft HOPE tool is submitted for quality 
measures and contributes to compliance with the HQRP.
    The draft HOPE Guidance Manual v1.0 is available on the HQRP HOPE 
web page for review and the final HOPE Guidance Manual v1.0 will be 
available after the publication of the final rule. This guidance manual 
offers hospices direction on the collection and submission of hospice 
patient stay data to CMS to support the HQRP quality measures.
Public Availability of Data Submitted
    Under section 1814(i)(5)(E) of the Act, the Secretary is required 
to establish procedures for making any quality measure data submitted 
by hospices available to the public. The procedures ensure that a 
hospice will have the opportunity to review the data regarding the 
hospice's respective program before it is made public. In addition, 
under section 1814(i)(5)(E) of the Act, the Secretary is authorized to 
report data collected to support quality measures under section 
1814(i)(5)(C) of the Act on the CMS website, that relate to services 
furnished by a hospice. We recognize that public reporting of quality 
measure data is a vital component of a robust quality reporting program 
and are fully committed to developing the necessary systems for public 
reporting of hospice quality measure data. We also recognize it is 
essential that the data made available to the public be meaningful and 
that comparing performance between hospices requires that measures be 
constructed from data collected in a standardized and uniform manner. 
The development and implementation of a standardized data set for 
hospices should precede public reporting of hospice quality measures. 
Once hospices have implemented the standardized data collection 
approach, we will have the data needed to establish the scientific 
soundness of the quality measures that can be calculated using the 
standardized data. It is critical to establish the reliability and 
validity of the measures prior to public reporting in order to 
demonstrate the ability of the measures to distinguish the quality of 
services provided. To establish reliability and validity of the quality 
measures, at least four quarters of data

[[Page 23811]]

will need to be analyzed. Typically, the first two quarters of data 
reflect the learning curve of the providers as they adopt a 
standardized data collection; these data are not used to establish 
reliability and validity. We propose that the data from the first 
quarter (anticipated to be Q4 CY2025, if HOPE data collection begins in 
October 2025) will not be used for assessing validity and reliability 
of the quality measures.
    We propose to assess the quality and completeness of the data that 
we receive as we near the end of Q4 2025 before public reporting the 
measures. Data collected by hospices during the four quarters of CY 
2026 (for example, Q 1, 2, 3 and 4 CY 2026) will be analyzed starting 
in CY 2027. We propose to inform the public of the decisions about 
whether to report some or all of the quality measures publicly based on 
the findings of analysis of the CY 2026 data.
    In addition, as noted, the Affordable Care Act requires that 
reporting on the quality measures adopted under section 1814(i)(5)(D) 
of the Act be made public on a CMS website and that providers have an 
opportunity to review their data prior to public reporting. In light of 
all the steps required prior to data being publicly reported, we 
propose that public reporting of the proposed quality measures will be 
implemented no earlier than FY 2027. Alternatively, we propose public 
reporting may occur during the FY 2028 APU year, allowing ample time 
for data analysis, review of measures' appropriateness for use for 
public reporting, and allowing hospices the required time to review 
their own data prior to public reporting.
    CMS will consider public reporting using fewer than four (4) 
quarters of data for the initial reporting period, but we propose to 
use 4 quarters of data as the standard reporting period for future 
public reporting. If the initial reporting period would include any 
excluded quarters of data, we propose to use as many non-excluded 
quarters of data as are included in the reporting period for public 
reporting. For example, if the first reporting period includes Q4 2024 
2025 through Q3 2025 2026, then public reporting of HOPE will be based 
on Q1 2025 2026, Q2 2025 2026, and Q3 2025 2026. The next public 
reporting period would include Q1 2025 2026-Q4 2025 2026, and public 
reporting would be based on four (4) quarters of data, as would all 
subsequent rolling reporting periods.
    We will propose the timeline for public reporting of data in future 
rulemaking and we welcome public comment on what we should consider 
when developing future proposals related to public reporting.
4. Health Equity Updates Related to HQRP
a. Background
Universal Foundation
    To further the goals of the CMS National Quality Strategy (NQS), 
CMS leaders from across the Agency have come together to move towards a 
building-block approach to streamline quality measures across CMS 
quality programs for the adult and pediatric populations. We believe 
that this ``Universal Foundation'' of quality measures will focus 
provider attention, reduce burden, identify disparities in care, 
prioritize development of interoperable, digital quality measures, 
allow for cross-comparisons across programs, and help identify 
measurement gaps. The development and implementation of the Preliminary 
Adult and Pediatric Universal Foundation Measures will promote the 
best, safest, and most equitable care for individuals. As CMS moves 
forward with the Universal Foundation, we will be working to identify 
foundational measures in other specific settings and populations to 
support further measure alignment across CMS programs as applicable.
TEP Recommendations
    In November and December 2022, CMS convened a group of stakeholders 
to provide input on the health equity measure development process. This 
HQRP and HH QRP Health Equity Structural Composite Measure Development 
Technical Expert Panel (or Home Health & Hospice HE TEP) included 
health equity experts from hospice and home health settings 
specializing in quality assurance, patience advocacy, clinical work, 
and measure development.
    The TEP largely supported the potential health equity measure 
domains of Equity as a Key Organizational Priority, Trainings for 
Health Equity, and Organizational Culture of Equity. The TEP also 
recommended that CMS not only measure equity in service provision, but 
also equity in access to services. TEP members raised concerns about 
collecting hospice quality measure data from family or caregivers of 
hospice decedents rather than collecting data directly from patients 
while they are receiving care. Vulnerable populations without contacts 
post-mortem may be left out of data collection, such as hospice 
patients who do not have family members to help with their care or 
unhoused people. This feedback highlighted the importance of including 
SDOH such as housing instability in hospice quality reporting. Hospice 
TEP members also recommended adding specific questions to the 
CAHPS[supreg] survey about cultural sensitivity.
    Additional information regarding the Home Health & Hospice HE TEP 
are available in the TEP Report, available on the Hospice QRP Health 
Equity web page: https://www.cms.gov/medicare/quality/hospice/hospice-qrp-health-equity.
b. Request for Information (RFI) Regarding Future HQRP Social 
Determinants of Health (SDOH) Items
    CMS is committed to developing approaches to meaningfully 
incorporate the advancement of health equity into the HQRP. One 
consideration is including social determinants of health (SDOH) into 
our quality measures and data stratification. SDOH are the 
socioeconomic, cultural, and environmental circumstances in which 
individuals live that impact their health. SDOH can be grouped into 
five broad domains: economic stability; education access and quality; 
health care access and quality; neighborhood and built environment; and 
social and community context. Health-related social needs (HRSNs) are 
the resulting effects of SDOH, which are individual-level, adverse 
social conditions that negatively impact a person's health or health 
care. Examples of HRSN include lack of access to food, housing, or 
transportation, and have been associated with poorer health outcomes, 
greater use of emergency departments and hospitals, and higher health 
care costs. Certain HRSNs can lead to unmet social needs that directly 
influence an individual's physical, psychosocial, and functional 
status. This is particularly true for food security, housing stability, 
utilities security, and access to transportation. In recent years, we 
have addressed SDOH through the identification and standardization of 
screening for HRSN, including finalizing several standardized patient 
assessment data requirements for post-acute care providers \7\ and 
testing the

[[Page 23812]]

Accountable Health Communities (AHC) model under section 1115A of the 
Social Security Act.\8\
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    \7\ See the ``Medicare and Medicaid Programs: CY 2020 Home 
Health Prospective Payment System Rate Update; Home Health Value-
Based Purchasing Model; Home Health Quality Reporting Requirements; 
and Home Infusion Therapy Requirements'' final rule (84 FR 39151) as 
an example. In the interim final rule with comment period (IFC) 
``Medicare and Medicaid Programs, Basic Health Program and 
Exchanges; Additional Policy and Regulatory Revisions in Response to 
the COVID-19 Public Health Emergency and Delay of Certain Reporting 
Requirements for the Skilled Nursing Facility Quality Reporting 
Program'' (85 FR 27550 through 27629), CMS delayed the compliance 
dates for these standardized patient assessment data under the 
Inpatient Rehabilitation Facility (IRF) Quality Reporting Program 
(QRP), Long-Term Care Hospital (LTCH) QRP, Skilled Nursing Facility 
(SNF) QRP, and the Home Health (HH) QRP due to the public health 
emergency. In the ``CY 2022 Home Health Prospective Payment System 
Rate Update; Home Health Value-Based Purchasing Model Requirements 
and Model Expansion; Home Health and Other Quality Reporting Program 
Requirements; Home Infusion Therapy Services Requirements; Survey 
and Enforcement Requirements for Hospice Programs; Medicare Provider 
Enrollment Requirements; and COVID-19 Reporting Requirements for 
Long-Term Care Facilities'' final rule (86 FR 62240 through 62431), 
CMS finalized its proposals to require collection of standardized 
patient assessment data under the IRF QRP and LTCH QRP effective 
October 1, 2022, and January 1, 2023, for the HH QRP.
    \8\ The Accountable Health Communities Model is a nationwide 
initiative established by the Center for Medicare and Medicaid 
Innovation Center to test innovative payment and service delivery 
models that have the potential to reduce Medicare, Medicaid, and 
Children's Health Insurance Program expenditures while maintaining 
or enhancing the quality of beneficiaries care and was based on 
emerging evidence that addressing health-related social needs 
through enhanced clinical-community linkages can improve health 
outcomes and reduce costs. More information can be found at: https://www.cms.gov/priorities/innovation/innovation-models/ahcm.
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    We have repeatedly heard from the public that CMS should develop 
new HQRP mechanisms to better address significant and persistent health 
care outcome inequities. For example, in the FY 2022 Hospice Wage Index 
final rule, we received comments supportive of gathering standardized 
patient assessment data elements and additional SDOH data to improve 
health equity. In the FY 2023 Hospice final rule, we again received 
comments highlighting the need for more sociodemographic and SDOH data 
to effectively evaluate health equity in hospice settings. Commenters 
suggested that CMS consider standardizing the sociodemographic and SDOH 
data collected across provider settings and across third party vendors 
(for example, EMRs) and other tools. To this end, CMS expects to seek 
endorsement under 1890(a) for measures that would utilize SDOH data, 
within HQRP.
    We are committed to achieving health equity in health care outcomes 
for our beneficiaries, including by improving data collection to better 
measure and analyze disparities across programs and policies.\9\ We 
believe that the ongoing measurement of SDOHs will have two significant 
benefits. First, because SDOHs disproportionately impact underserved 
communities, promoting measurement of these factors may serve as 
evidence-based building blocks for supporting healthcare providers and 
health systems in actualizing commitment to address disparities, 
improving health equity through addressing the social needs with 
community partners, and implementing associated equity measures to 
track progress.\10\ By measuring patient SDOH providers would be better 
equipped to identify disparities in patient populations and health 
outcomes. Better SDOH quality measures would serve as evidence-based 
building blocks for informing more effective programs to target and 
mitigate disparities, thereby enabling providers to improve patient 
outcomes.
---------------------------------------------------------------------------

    \9\ Centers for Medicare & Medicaid Services. CMS Quality 
Strategy. 2016. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \10\ American Hospital Association. (2020). Health Equity, 
Diversity & Inclusion Measures for Hospitals and Health System 
Dashboards. December 2020. Accessed: January 18, 2022. Available at: 
https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
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    Second, these factors could support ongoing HQRP initiatives by 
providing data with which to measure stratified resident risk and 
organizational performance. Further, we believe measuring resident-
level SDOH through screening is essential in the long-term in 
encouraging meaningful collaboration between healthcare providers and 
community-based organizations, as well as in implementing and 
evaluating related innovations in health and social care delivery. 
Analysis of SDOH measures could allow providers to more effectively 
identify patient needs and identify opportunities for effective 
partnership with community-based organizations with the capacity to 
help address those needs. Thorough SDOH measures would also provide a 
better evidence base for evaluating the effectiveness and 
appropriateness of health and social care delivery innovations. The 
SDOH category of standardized patient assessment data elements could 
provide hospices and policymakers with meaningful measures as we seek 
to reduce disparities and improve care for beneficiaries with social 
risk factors. SDOH measures would also permit us to develop the 
statistical tools necessary to reduce costs and improve the quality of 
care for all beneficiaries. We note that advancing health equity by 
addressing the health disparities that underlie the country's health 
system is one of our strategic pillars \11\ and a Biden-Harris 
Administration priority.\12\ As such, CMS is working toward collecting 
SDOH data elements in hospice in support of quality measurement and 
seeks public comment on these efforts.
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    \11\ Brooks-LaSure, C. (2021). My First 100 Days and Where We Go 
from Here: A Strategic Vision for CMS. Centers for Medicare & 
Medicaid. Available at: https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
    \12\ The White House. The Biden-Harris Administration Immediate 
Priorities [website]. https://www.whitehouse.gov/priorities/.
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    CMS reviewed SDOH domains to determine which domains align across 
post-acute care (PAC) and hospice care settings, circumstances, and 
setting-specific care goals. CMS identified four SDOH domains that are 
relevant across the PAC and hospice care setting: housing instability, 
food insecurity, utility challenges, and barriers to transportation 
access. These data elements have supported measures of quality in other 
settings. For example, as of 2023 the Hospital Inpatient Quality 
Reporting Program mandates reporting on the ``Screening for Social 
Drivers of Health'' and ``Screen Positive Rate for Social Drivers of 
Health'' measures.
    CMS requests input on which of the data collection items outlined 
below are suitable for the hospice setting, and how they may need to be 
adapted to be more appropriate for the hospice setting.
Housing Instability
    Healthy People 2030 prioritizes economic stability as a key SDOH, 
of which housing stability is a component.13 14 Lack of 
housing stability encompasses several challenges, such as having 
trouble paying rent, overcrowding, moving frequently, or spending the 
bulk of household income on housing.\15\ These experiences may 
negatively affect physical health and make it harder to access health 
care. Lack of housing stability can also lead to homelessness, which is 
housing deprivation in its most severe form. Homelessness is defined as 
``lacking a regular nighttime residence or having a primary nighttime 
residence that is a temporary shelter or other place not designed for 
sleeping.'' \16\ On a single night in 2023, roughly 653,100 people, or 
20 out of every 10,000 people in the United States, were experiencing

[[Page 23813]]

homelessness.\17\ Studies also found that newly homeless people have an 
increased risk of premature death and experience chronic disease more 
often than among the general population.
---------------------------------------------------------------------------

    \13\ https://health.gov/healthypeople/priority-areas/social-determinants-health.
    \14\ Healthy People 2030 is a long-term, evidence-based effort 
led by the U.S. Department of Health and Human Services (HHS) that 
aims to identify nationwide health improvement priorities and 
improve the health of all Americans.
    \15\ Kushel, M.B., Gupta, R., Gee, L., & Haas, J.S. (2006). 
Housing instability and food insecurity as barriers to health care 
among low-income Americans. Journal of General Internal Medicine, 
21(1), 71-77. doi: 10.1111/j.1525-1497.2005.00278.x.
    \16\ https://health.gov/healthypeople/priority-areas/social-determinants-health/literature-summaries/housing-instability.
    \17\ The 2023 Annual Homeless Assessment Report (AHAR) to 
Congress. The U.S. Department of Housing and Urban Development 2023. 
https://www.huduser.gov/portal/sites/default/files/pdf/2023-AHAR-Part-1.pdf.
---------------------------------------------------------------------------

    The following options were identified as potential complimentary 
items to collect housing information, in addition to proposed HOPE item 
A1905--Living Arrangements.
[GRAPHIC] [TIFF OMITTED] TP04AP24.024

Food Insecurity
    The U.S. Department of Agriculture, Economic Research Service 
defines a lack of food security as a household-level economic and 
social condition of limited or uncertain access to adequate food.\18\ 
Food insecurity has been a priority for the Biden-Harris 
Administration, with the White House recently announcing 141 
stakeholder funding commitments to support the White House Challenge to 
End Hunger and Build Healthy Communities.\19\ Adults who are food 
insecure may be at an increased risk for a variety of negative health 
outcomes and health disparities. For example, a study found that food-
insecure adults may be at an increased risk for obesity.\20\ Nutrition 
security is also an important component that builds on and complements 
long standing efforts to advance food security. The United States 
Department of Agriculture (USDA) defines nutrition security as 
``consistent and equitable access to healthy, safe, affordable foods 
essential to optimal health and well-being.'' \21\ While having enough 
food is one of many predictors for health outcomes, a diet low in 
nutritious foods is also a factor.\22\ Studies have shown that older 
adults struggling with food security consume fewer calories and 
nutrients and have lower overall dietary quality than those who are 
food secure, which can put them at nutritional risk. Older adults are 
also at a higher risk of developing malnutrition, which is considered a 
state of deficit, excess, or imbalance in protein, energy, or other 
nutrients that adversely impacts an individual's own body form, 
function, and clinical outcomes. About 50 percent of older adults are 
affected by malnutrition, which is further aggravated by a lack of food 
security and poverty.\23\
---------------------------------------------------------------------------

    \18\ U.S. Department of Agriculture, Economic Research Service. 
(n.d.). Definitions of food security. Retrieved March 10, 2022, from 
https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-u-s/definitions-of-food-security/.
    \19\ https://www.whitehouse.gov/briefing-room/statements-releases/2024/02/27/fact-sheet-the-biden-harris-administration-announces-nearly-1-7-billion-in-new-commitments-cultivated-through-the-white-house-challenge-to-end-hunger-and-build-healthy-communities/.
    \20\ Hernandez, D.C., Reesor, L.M., & Murillo, R. (2017). Food 
insecurity and adult overweight/obesity: Gender and race/ethnic 
disparities. Appetite, 117, 373-378.
    \21\ Food and Nutrition Security. (n.d.). USDA. https://www.usda.gov/nutrition-security.
    \22\ National Center for Health Statistics. (2022, September 6). 
Exercise or Physical Activity. Retrieved from Centers for Disease 
Control and Prevention: https://www.cdc.gov/nchs/fastats/exercise.htm.
    \23\ Food Research & Action Center (FRAC). ``Hunger is a Health 
Issue for Older Adults: Food Security, Health, and the Federal 
Nutrition Programs.'' December 2019. https://frac.org/wp-content/uploads/hunger-is-a-health-issue-for-older-adults-1.pdf.

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[[Page 23814]]

[GRAPHIC] [TIFF OMITTED] TP04AP24.025

Utility Challenges
    A lack of energy (utility) security can be defined as an inability 
to adequately meet basic household energy needs.\24\ According to the 
Department of Energy, one in three households in the US are unable to 
adequately meet basic household energy needs.\25\ The consequences 
associated with a lack of utility security are represented by three 
primary dimensions: economic, physical, and behavioral. Individuals 
with low incomes are disproportionately affected by high energy costs, 
and they may be forced to prioritize paying for housing and food over 
utilities. Some people may face limited housing options and are at 
increased risk of living in lower-quality physical conditions with 
malfunctioning heating and cooling systems, poor lighting, and outdated 
plumbing and electrical systems. Finally, individuals who lack of 
utility security may use negative behavioral approaches to cope, such 
as using stoves and space heaters for heat.\26\ In addition, data from 
the Department of Energy's US Energy Information Administration confirm 
that a lack of energy security disproportionately affects certain 
populations, such as low-income and African American households.\27\ 
The effects of a lack of utility security include vulnerability to 
environmental exposures such as dampness, mold, and thermal discomfort 
in the home, which have direct effect on residents' health. For 
example, research has shown associations between a lack of energy 
security and respiratory conditions as well as mental health-related 
disparities and poor sleep quality in vulnerable populations such as 
the elderly, children, the socioeconomically disadvantaged, and the 
medically vulnerable.\28\ Adopting a data element to collect 
information about utility security across PAC settings could facilitate 
the identification of residents who may not have utility security and 
who may benefit from engagement efforts.
---------------------------------------------------------------------------

    \24\ Hern[aacute]ndez D. Understanding 'energy insecurity' and 
why it matters to health. Soc Sci Med. 2016 Oct; 167:1-10. doi: 
10.1016/j.socscimed.2016.08.029. Epub 2016 Aug 21. PMID: 27592003; 
PMCID: PMC5114037.
    \25\ U.S. Energy Information Administration. ``One in Three U.S. 
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017 
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
    \26\ Hern[aacute]ndez D. ``What `Merle' Taught Me About Energy 
Insecurity and Health.'' Health Affairs, VOL.37, NO.3: Advancing 
Health Equity Narrative Matters. March 2018. https://doi.org/10.1377/hlthaff.2017.1413.
    \27\ US Energy Information Administration. ``One in Three U.S. 
Households Faced Challenges in Paying Energy Bills in 2015.'' 2017 
Oct 13. https://www.eia.gov/consumption/residential/reports/2015/energybills/.
    \28\ Hern[aacute]ndez D. ``Understanding `energy insecurity' and 
why it matters to health.'' Soc Sci Med. 2016; 167:1-10.

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[[Page 23815]]

[GRAPHIC] [TIFF OMITTED] TP04AP24.026

Transportation Challenges
    Transportation barriers can both directly and indirectly affect a 
person's health. A lack of transportation can keep patients from 
accessing medical appointments, getting medications, or from getting 
things they need daily. It can also affect a person's health by 
creating a barrier to accessing goods and services, obtaining adequate 
food and clothing, or attending social activities. Therefore, reliable 
transportation services are fundamental to a person's health.
[GRAPHIC] [TIFF OMITTED] TP04AP24.027

All Domains

[[Page 23816]]

[GRAPHIC] [TIFF OMITTED] TP04AP24.028

    We solicit public comment on the following questions:
     For each of the domains:
    ++ Are these items relevant for hospice patients? Are these items 
relevant for hospice caregivers?
    ++ Which of these items are most suitable for hospice?
    ++ How might the items need to be adapted to improve relevance for 
hospice patients and their caregivers? Would you recommend adjusting 
the listed timeframes for any items? Would you recommend revising any 
of the items' response options?
     Are there additional SDOH domains that would also be 
useful for identifying and addressing health equity issues in Hospice?
5. Proposed CAHPS Hospice Survey and Measure Changes
a. Survey and Measure Changes
    In the Fiscal Year 2024 Hospice Payment Rate Update Final Rule (88 
FR 51164), CMS provided the results of a mode experiment conducted with 
56 large hospices in 2021. The experiment tested a web-mail mode, 
modification to survey administration protocols such as adding a 
prenotification letter and extending the data collection period, and a 
revised survey version. Because we believe the results of the 
experiment were successful, we are proposing changes to the CAHPS 
Hospice Survey and administrative protocol. The revised survey is 
shorter and simpler than the current survey and includes new questions 
on topics suggested by stakeholders. Specifically, proposed changes to 
the survey and the quality measures derived from testing include:
     Removal of three nursing home items and an item about 
moving the family member \29\ that are not included in scored measures.
---------------------------------------------------------------------------

    \29\ The current version of the CAHPS Hospice Survey is 
available at: https://hospicecahpssurvey.org/en/survey-materials/. 
The proposed items are for removal from this version of the survey 
are: Question 32 through 34 (nursing home items), Question 30 (item 
about moving a family member), Question 10 (item regarding confusing 
or contradictory information), and Question 17 through 20, 23, 28, 
and 29 (screening and evaluative items used to calculate the Getting 
Hospice Care Training measure).
---------------------------------------------------------------------------

     Removal of one survey item regarding confusing or 
contradictory information from the Hospice Team Communication 
measure.\30\
---------------------------------------------------------------------------

    \30\ Ibid.
---------------------------------------------------------------------------

     Replacement of the multi-item Getting Hospice Care 
Training measure \31\ with a new, one-item summary measure.
---------------------------------------------------------------------------

    \31\ Ibid.
---------------------------------------------------------------------------

     Addition of two new items, which will be used to calculate 
a new Care Preferences measure.
     Simplified wording to component items in the Hospice Team 
Communication, Getting Timely Care, and Treating Family Member with 
Respect measures.
    The revised CAHPS Hospice Survey, including the new Care 
Preferences measure, the revised Hospice Team Communication measure, 
and the revised Getting Hospice Care Training measure received 
endorsement through the Consensus Standards Approval Committee (CSAC) 
Fall 2022 endorsement and maintenance cycle. Recommendations from the 
endorsement committee resulted in edits to the Getting Emotional and 
Religious Support to reflect cultural needs.
    The Care Preferences, Hospice Team Communication, and Getting 
Hospice Care Training measures are on the 2023 Measures Under 
Consideration list (MUC2023-183,191 & 192) and are under evaluation by 
the Pre-Rulemaking Measure Review (PRMR) Post-Acute Care/Long-Term Care 
(PAC/LTC) Committee. The Consensus-Based Entity (CBE) utilizes the 
Novel Hybrid Delphi and Nominal Group (NHDNG) multi-step process, which 
is an iterative consensus-building approach aimed at a minimum of 75 
percent agreement among voting members, rather than a simple majority 
vote, and supports maximizing the time spent to build consensus by 
focusing discussion on measures where there is disagreement. The final 
result from the committee's vote can be: ``Recommend'', ``Recommend 
with conditions'', ``Do not recommend'' or ``Consensus not reached''. 
``Consensus not reached'' signals continued disagreement amongst the 
committee despite being presented with perspectives from public 
comment, committee member feedback and discussion, and highlights the 
multi-faceted assessments of quality measures. The CBE did not reach 
consensus on the CAHPS Hospice Survey measures. More details regarding 
the CBE Pre-Rulemaking Measure Review (PRMR) voting procedures may be 
found in Chapter 4 of the Guidebook of Policies and Procedures for Pre-
Rulemaking Measure Review and Measure Set Review.
    CMS is proposing to implement the revised CAHPS Hospice Survey 
beginning with January 2025 decedents. Table 14 provides a comparison 
of the current and proposed CAHPS Hospice Survey measures.
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BILLING CODE 4120-01-C
    We seek comment on these proposed changes before finalization.
b. Impact to Public Reporting and Star Ratings
    CAHPS Hospice Survey measure scores are calculated across eight 
rolling quarters and are published quarterly for all hospices with 30 
or more completed surveys over the reporting period. The Family 
Caregiver Survey Rating summary Star Rating is also calculated using 
eight rolling quarters and is publicly reported for all hospices with 
75 or more completed surveys over the reporting period. Star Ratings 
are updated every other quarter. To determine what impact the changes 
to the survey measures would have on public reporting, CMS considered 
the nature of the measure change. As ``Care Preferences'' would be a 
new measure for the CAHPS Hospice Survey, we would have to wait to 
introduce public reporting until we have eight quarters of data. 
Although the revised ``Getting Hospice Care Training'' measure would be 
conceptually similar to the current ``Getting Hospice Care Training'' 
measure, we believe the change (one summary item instead of several 
items) is substantive and the revised measure should be treated as new 
for purposes of public reporting and Star Ratings. As such, we propose 
waiting to publicly report the new version of ``Getting Hospice Care 
Training'' until we have eight quarters of data. We anticipate that the 
first Care Compare refresh in which publicly reported measures scores 
would be updated to include the new measures would be November 2027, 
with scores calculated using data from Q1 2025 through Q4 2026. Because 
measure scores are calculated quarterly and Star Ratings are calculated 
every other quarter, these changes may be introduced in different 
quarters for measure scores and Star Ratings. In the interim period, 
measure scores would be made available to hospices confidentially in 
their Provider Preview reports once they met a threshold number of 
completed surveys.
    We believe the proposed changes to the ``Hospice Team 
Communication'' measure (removing one item and slight wording changes) 
are non-substantive (that is, would not meaningfully change the 
measure) and that the measure could continue to be publicly reported 
and used in Star Ratings in the transition period between the current 
and new

[[Page 23823]]

surveys. During the transition period, scores and Star Ratings would be 
calculated by combining scores from quarters using the current and new 
survey. As a result of the survey measure changes, we propose that the 
Family Caregiver Survey Rating summary Star Rating will be based on 
seven measures rather than the current eight measures during the 
interim period until a full eight quarters of data are available for 
the ``Getting Hospice Care Training'' measure. The summary Star Rating 
would be based on nine measures once eight quarters of data are 
available for the new Care Preference and Getting Hospice Care Training 
measures.
c. Survey Administration Changes
    CMS is proposing to add a web-mail mode (email invitation to a web 
survey, with mail follow-up to non-responders); to add a pre-
notification letter; and to extend the field period from 42 to 49 days, 
beginning with January 2025 decedents. The 2021 mode experiment found 
increases to response rates with these changes to survey administrative 
protocols. The web-mail mode would be an alternative to the current 
modes (mail-only, telephone-only, and mixed mode (mail with telephone 
follow-up)) that hospices could select. In the mode experiment, among 
those with no available email addresses, response rates to the mail-
only and web-mail modes were similar (35.2 percent vs. 34.3 percent); 
however, among those with available email addresses, adjusted response 
rates were substantially and significantly different--36.7 percent for 
mail-only versus 49.6 percent for web-mail--suggesting a notable 
benefit of the web-mail mode for hospices with available email 
addresses for some caregivers.
    In the mode experiment, we found that mailing a pre-notification 
letter one week prior to survey administration was associated with an 
increase in response rates of 2.4 percentage points. We currently 
require a prenotification letter for the Medicare Advantage and 
Prescription Drug Plan and the In-center Hemodialysis CAHPS 
initiatives, so there is precedent for this requirement for CAHPS 
surveys, and mailing the letter is well within the capabilities of all 
approved survey vendors.
    Currently, the CAHPS Hospice Survey is fielded over 42 days; 
responses that come in after the 42-day window are not included in 
analysis and scoring. Extending the field period by one week (to 49 
days) is feasible within the current national implementation data 
collection and submission timeline. Our proposal to extend the field 
period to 49 days is estimated to result in an increased response rate 
of 2.5 percentage points in the mail-only mode, the predominant mode in 
which CAHPS Hospice Surveys are currently administered.
d. Case-Mix and Mode Adjustments
    Prior to public reporting, hospices' CAHPS Hospice Survey scores 
are adjusted for the effects of both mode of survey administration and 
case mix. Case mix refers to characteristics of the decedent and the 
caregiver that are not under control of the hospice that may affect 
reports of hospice experiences. Case-mix adjustment is performed within 
each quarter of data after data cleaning and mode adjustment. The 
current case-mix adjustment model includes the following variables: 
response percentile (the lag time between patient death and survey 
response), decedent's age, payer for hospice care, decedent's primary 
diagnosis, decedent's length of final episode of hospice care, 
caregiver's education, decedent's relationship to caregiver, 
caregiver's preferred language and language in which the survey was 
completed, and caregiver's age. CMS reviewed the variables included in 
the case-mix adjustment models currently in use for the CAHPS Hospice 
Survey to determine if any changes needed to be introduced along with 
the revised survey and new mode. We found that no case-mix variables 
need to be added or removed.
    With the introduction of a new mode of survey administration and 
survey items, CMS proposes updating the analytic adjustments that 
adjust responses for the effect of mode on survey responses. When we 
make mode adjustments, it is necessary to choose one mode as a 
reference mode. One can then interpret all adjusted responses from all 
modes as if they had been surveyed in the reference mode. Telephone-
only is currently the reference mode for the CAHPS Hospice Survey. We 
are proposing to change the reference mode to mail-only. In the 2015 
CAHPS Hospice Survey mode experiment, telephone-only respondents had 
consistently worse scores than mail-only respondents across measures. 
However, in the 2021 mode experiment, differences in scores between 
mail-only and telephone-only respondents were no longer in a consistent 
direction across measures. Given this, we are proposing to use mail-
only as the reference mode beginning with January 2025 decedents as 
most surveys are currently completed in the mail-only mode. We invite 
public comment on the CAHPS Hospice Survey proposals.
6. Form, Manner, and Timing of Quality Measure Data Submission
a. Statutory Penalty for Failure To Report
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
The data must be submitted in a form and manner, and at a time 
specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act was 
amended by the CAA, 2021 and the payment reduction for failing to meet 
hospice quality reporting requirements was increased from 2 percent to 
4 percent beginning with FY 2024. During FYs 2014 through 2023, the 
Secretary reduced the market basket update by 2 percentage points for 
non-compliance. Beginning in FY 2024 and for each subsequent year, the 
Secretary will reduce the market basket update by 4 percentage points 
for any hospice that does not comply with the quality measure data 
submission requirements for that FY. In the FY 2023 Hospice Wage Index 
final rule (87 FR 45669), we revised our regulations at Sec.  
418.306(b)(2) in accordance with this statutory change (86 FR 42605).
b. HOPE Data Collection
    Hospices will be required to begin collecting and submitting HOPE 
data as of October 1, 2025. After this effective date, hospices will no 
longer be required to collect or submit the Hospice Item Set (HIS).
    We propose that hospices begin the use of HOPE in October 2025 and 
submit HOPE assessments to the CMS data submission and processing 
system in the required format designated by CMS (as set out in 
subregulatory guidance). At the time of implementation (that is, 
October 2025), all HOPE records would need to be submitted as an XML 
file, which is also the required format for the HIS. The format is 
subject to change in future years as technological advancements occur 
and healthcare provider use of electronic records increases, as well as 
systems become more interoperable.
    We will provide the HOPE technical date specifications for software 
developers and vendors on the CMS website. Software developers and 
vendors should not wait for final technical data specifications to 
begin development of their own products. Rather, software developers 
and vendors are encouraged to thoroughly review the draft technical 
data specifications and provide feedback to CMS so we may address 
potential issues adequately and in a timely manner. We will conduct a 
call with software developers and

[[Page 23824]]

vendors after the draft specifications are posted, during which we will 
respond to questions, comments, and suggestions. This process will 
ensure software developers and vendors are successful in developing 
their products to better support the successful implementation of HOPE 
for all parties. Hospice providers will need to use vendor software to 
submit HOPE records to CMS. As with HIS, facilities that fail to submit 
all required HOPE assessments to CMS for at least 90% of their patients 
will be subject to a 4% reduction. See ``Submission of Data 
Requirements'' section below for additional information.
c. Retirement of Hospice Abstraction Reporting Tool (HART)
    In 2014, CMS made a free tool (Hospice Abstraction Reporting Tool, 
or HART) available which providers could use to collect HIS data. Over 
time we observed that only a small percentage of hospices utilized the 
tool. Therefore, in light of the limited utility the free tool 
provided, we will no longer provide a free tool for standardized data 
collection. Beginning October 1, 2025, hospices will need to select a 
private vendor to collect and submit HIS data, and subsequently HOPE 
data, to CMS.
d. Compliance
    HQRP Compliance requires understanding three timeframes for both 
HIS and CAHPS: The relevant Reporting Year; the payment FY; and the 
Reference Year.
    (1) The ``Reporting Year'' (HIS) or ``Data Collection Year'' 
(CAHPS) is based on the calendar year (CY). It is the same CY for both 
HIS (or HOPE, once it is implemented) and CAHPS. If the CAHPS Data 
Collection year is CY 2025, then the HIS (or HOPE) reporting year is 
also CY 2025.
    (2) In the ``Payment FY'', the APU is subsequently applied to FY 
payments based on compliance in the corresponding Reporting Year/Data 
Collection Year.
    (3) For the CAHPS Hospice Survey, the Reference Year is the CY 
before the Data Collection Year. The Reference Year applies to hospices 
submitting a size exemption from the CAHPS survey (there is no similar 
exemption for HIS or HOPE). For example, for the CY 2025 data 
collection year, the Reference Year is CY 2024. This means providers 
seeking a size exemption for CAHPS in CY 2025 will base it on their 
hospice size in CY 2024.
    Submission requirements are codified at 42 CFR 418.312. Table 15 
summarizes the three timeframes. It illustrates how the CY interacts 
with the FY payments, covering the CY 2023 through CY 2026 data 
collection periods and the corresponding APU application from FY 2025 
through FY 2028. Please note that during the first reporting year that 
implements HOPE, APUs may be based on fewer than four quarters of data. 
CMS will provide additional subregulatory guidance regarding APUs for 
the HOPE implementation year.
[GRAPHIC] [TIFF OMITTED] TP04AP24.035

    As illustrated in Table 15 CY 2023 data submissions compliance 
impacts the FY 2025 APU. CY 2024 data submissions compliance impacts 
the FY 2026 APU. CY 2025 data submissions compliance impacts FY 2027 
APU. This CY data submission impacting FY APU pattern follows for 
subsequent years.
e. Submission of Data Requirements
    As finalized in the FY 2016 Hospice Wage Index final rule (80 FR 
47142, 47192), hospices' compliance with HIS requirements beginning 
with the FY 2020 APU determination (that is, based on HIS-Admission and 
Discharge records submitted in CY 2018) are based on a timeliness 
threshold of 90 percent. This means CMS requires that hospices submit 
90 percent of all required HIS records within 30 days of the event 
(that is, patient's admission or discharge). The 90-percent threshold 
is hereafter referred to as the timeliness compliance threshold. Ninety 
percent of all required HIS records must be submitted and accepted 
within the 30-day submission deadline to avoid the statutorily-mandated 
payment penalty.
    We propose to apply the same submission requirements for HOPE 
admission, discharge, and two HUV records. After HIS is phased out, 
hospices would continue to submit 90 percent of all required HOPE 
records to support the quality measures within 30 days of the event or 
completion date (patient's admission, discharge, and based on the 
patient's length of stay up to two HUV timepoints).
    Hospice compliance with claims data requirements is based on 
administrative data collection. Since Medicare claims data are already 
collected from claims, hospices are considered 100 percent compliant 
with the submission of these data for the HQRP. There is no additional 
submission requirement for administrative data.
    To comply with CMS' quality reporting requirements for CAHPS, 
hospices are required to collect data monthly using the CAHPS Hospice 
Survey. Hospices comply by utilizing a CMS-approved third-party vendor. 
Approved Hospice CAHPS vendors must successfully submit data on the 
hospice's behalf to the CAHPS Hospice Survey Data Center. A list of the 
approved vendors can be found on the

[[Page 23825]]

CAHPS Hospice Survey website: www.hospicecahpssurvey.org.
    Table 16. HQRP Compliance Checklist illustrates the APU and 
timeliness threshold requirements.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP04AP24.036

BILLING CODE 4120-01-C
    Most hospices that fail to meet HQRP requirements do so because 
they miss the 90 percent threshold. We offer many training and 
education opportunities through our website, which are available 24/7, 
365 days per year, to enable hospice staff to learn at the pace and 
time of their choice. We want hospices to be successful with meeting 
the HQRP requirements. We encourage hospices to use the website at: 
https://www.cms.gov/Medicare/Quality-

[[Page 23826]]

Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/
Hospice-Quality-Reporting-Training-Training-and-Education-Library. For 
more information about HQRP Requirements, we refer readers to visit the 
frequently-updated HQRP website and especially the Requirements and 
Best Practice, Education and Training Library, and Help Desk web pages 
at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting. We also encourage 
readers to visit the HQRP web page and sign-up for the Hospice Quality 
ListServ to stay informed about HQRP.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

A. Hospice Outcomes & Patient Evaluation (HOPE)

    As proposed in section III. of this proposed rule, we are proposing 
the use of HOPE to collect QRP information through revisions to Sec.  
418.312(b). We are also proposing to require HOPE as a hospice patient-
level item set to be used by all hospices to collect and submit 
standardized data on each patient admitted to hospice. HOPE would be 
used to support the standardized collection of the requisite data 
elements to calculate quality measures being utilized by the QRP. 
Hospices would be required to complete and submit an admission HOPE and 
a discharge HOPE collecting a range of status data (set out in the PRA 
accompanying this Rule, as well as the HOPE Guidance Manual proposed in 
this Rule) for each patient, as well as a HOPE Update Visit assessment, 
when applicable, starting October 1, 2025, for FY 2027 APU 
determination.
    CMS data indicates that approximately 5,640 hospices enroll 
approximately 2,763,850 patients in hospice annually.
    According to the most recent wage data provided by the Bureau of 
Labor Statistics (BLS) for May 2022 (see https://www.bls.gov/oes/current/oes_nat.htm), the median hourly wage for Registered Nurses is 
$39.05 and the mean hourly wage for Medical Secretaries is $18.51. With 
fringe benefits and overhead, the total per hour rate for Registered 
Nurses is $78.10, and the total per hour rate for Medical Secretaries 
is $37.02. The foregoing wage figures are outlined in Table 17:
[GRAPHIC] [TIFF OMITTED] TP04AP24.037

    The annual time and cost burden for HOPE is calculated by 
determining the number of hours spent on each HOPE timepoint and using 
an average salary for nurses and medical secretaries to determine the 
average cost of the time spent on the assessment.
    The total number of Medicare-participating hospices (5,640) and the 
total number of admissions per year (2,763,850) are gathered from 
claims data collected by CMS. Based on these claims data, we determined 
that there are approximately 490 admissions per hospice per year. We 
then use data from previous HIS item timings and HOPE beta testing to 
determine the average time to complete the three HOPE timepoints. The 
time-to-complete is then calculated for each HOPE timepoint for nurses 
(clerical staff are assumed to take 5 minutes per timepoint to upload 
data). HOPE Admission is estimated to take 27 minutes for a nurse to 
complete relative to HIS, the new HOPE HUV is estimated to take 22 
minutes for a nurse to complete, and HOPE Discharge is estimated to 
take 0 minutes to complete. Together, these burden increases represent 
a 54-minute increase per assessment (22 + 27 + 5 = 54 minutes). We also 
note that, due to the addition of the HUV timepoint, hospices will 
submit an estimated 2,763,850 additional HOPE assessments (one HUV 
assessment per admission).
    By multiplying the average time-to-complete with the number of 
records for a timepoint, we determine the average increase in burden 
hours spent for both nurses and clinical staff annually (Admission: 
1,243,733 hours, HUV: 1,243,733 hours, Discharge: 0 hours). For 
additional information regarding the calculation of HOPE time and cost 
burdens, please refer to the HOPE Beta Testing Report found on the HOPE 
web page at https://www.cms.gov/medicare/quality/hospice/hope and the 
PRA package associated with this rule found at https://www.cms.gov/medicare/regulations-guidance/legislation/paperwork-reduction-act-1995/pra-listing.
    To calculate the cost burden, we multiply hospice staff wages by 
the amount of time those staff need to spend administering HOPE. We use 
the most recent hourly wage data for Registered

[[Page 23827]]

Nurses ($39.05 per hour) and Medical Secretaries ($18.51 per hour) from 
the U.S. Bureau of Labor Statistics. These wages are doubled to account 
for fringe benefits ($78.10 for Registered Nurses, $37.02 for Medical 
Secretaries). Nurse and Medical Secretary wages are then calculated 
separately by multiplying time spent on timepoints with the number of 
HOPE records with the average wages (for example: 49 clinical minute 
increase on HOPE x 490 HOPE records per year/60 minutes x $78.10 = 
$31,253.02 nursing wages spent per hospice per year). The calculations 
for each of these hospice staff disciplines are added together to 
determine the total cost burden increase per hospice.
    Based on these calculations, we estimate that our proposal would 
therefore result in an incremental increase of 2,487,466-hour annual 
burden (1,243,733 hours for HOPE Admissions, 1,243,733 hours for HOPE 
Update Visits, and 0 hours for HOPE Discharges) at a cost of 
$184,792,739. The total cost burden per hospice ($32,764.67) is 
calculated by adding the total clinical cost ($31,253.02, as seen 
above) with the total clerical staff cost burden (5 minutes x 490 HOPE 
Records per each hospice per year/60 minutes per hour x $37.02 per hour 
= $1,511.65). This leads to a cost burden of $184,792,739 across all 
hospices ($32,764.67 per hospice x 5,640 hospices). Table 18 below 
provides the summary of changes in burden relative to the new HOPE 
Admission, Update Visit and Discharge timepoints. This increase in 
incremental burden is explained further in the Regulatory Impact 
Analysis (RIA) section of this proposed rule, and is also discussed in 
detail in the Information Collection Request accompanying this 
rulemaking.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP04AP24.038

BILLING CODE 4120-01-C

B. Amendment of HQRP Data Completeness Thresholds

    The amended HQRP data completeness thresholds reflect the same 
thresholds which have been applied to the HQRP since the FY 2018 
Hospice Final Rule as they relate to HIS. As such, this proposal would 
not impose any additional collection of information burden on hospices 
for the forthcoming Fiscal Year.

V. Response to Comments

    Because of the large number of public comments we normally receive 
on

[[Page 23828]]

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

1. Hospice Payment
    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 update the payment rates for each of 
the categories of hospice care, described in Sec.  418.302(b), for FY 
2025 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.
2. Quality Reporting Program
    This proposed rule would update the requirements for HQRP to use a 
new standardized patient assessment tool, HOPE, which is more 
comprehensive than the previous HIS and includes new data elements and 
a new time point. These changes would allow HQRP to reflect a more 
consistent and holistic view of each patient's hospice election. This 
new reporting instrument will collect data that supports current and 
newly proposed quality measures included in this proposed rule and 
potential future quality measures. The new HOPE data elements are not 
only collected by chart abstraction but in real-time to adequately 
assess patients based on the hospice's interactions with the patient 
and family/caregiver, accommodate patients with varying clinical needs, 
and provide additional information to contribute to the patient's care 
plan throughout the hospice stay (not just at admission and discharge).

B. Overall Impacts

    We have examined the impacts of this proposed rule as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 14094 on Modernizing Regulatory Review (April 6, 
2023), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96 354), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism 
(August 4, 1999), and the Congressional Review Act (CRA) (5 U.S.C. 
804(2)).
    Executive Orders 12866 (as amended by E.O. 14094) and E.O. 13563 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 14094 amends 3(f) of Executive 
Order 12866 to define a ``significant regulatory action'' as an action 
that is likely to result in a rulemaking that: (1) has an annual effect 
on the economy of $200 million or more in any 1 year, or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, territorial, or Tribal governments or 
communities; (2) creates a serious inconsistency or otherwise 
interfering with an action taken or planned by another agency; (3) 
materially alters the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise legal or policy issues for which centralized 
review would meaningfully further the President's priorities or the 
principles set forth in this Executive Order.
    A regulatory impact analysis (RIA) must be prepared for a 
regulatory action that is significant section 3(f)(1). Based on our 
estimates, OMB'S Office of Information and Regulatory Affairs has 
determined this rulemaking is significant under section 3(f)(1) of E.O. 
12866. Accordingly, we have prepared a regulatory impact analysis 
presents the costs and benefits of the rulemaking to the best of our 
ability. Pursuant to Subtitle E of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (also known as the Congressional 
Review Act), OIRA has also determined that this proposed rule meets the 
criteria set forth in 5 U.S.C. 804(2).
1. Hospice Payment
    We estimate that the aggregate impact of the payment provisions in 
this rulemaking would result in an estimated increase of $705 million 
in payments to hospices, resulting from the proposed hospice payment 
update percentage of 2.6 percent for FY 2025. The impact analysis of 
this proposed rule represents the projected effects of the changes in 
hospice payments from FY 2024 to FY 2025. Using the most recent 
complete data available at the time of rulemaking, in this case FY 2023 
hospice claims data as of January 11, 2024, we simulate total payments 
using the FY 2024 wage index (pre-floor, pre-reclassified hospital wage 
index with the hospice floor, and old OMB delineations with the 5-
percent cap on wage index decreases) and FY 2024 payment rates and 
compare it to our simulation of total payments using FY 2023 
utilization claims data, the proposed FY 2025 Hospice Wage Index (pre-
floor, pre-reclassified hospital wage index with hospice floor, and the 
revised OMB delineations with a 5-percent cap on wage index decreases) 
and FY 2024 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 
2024 wage index and payment rates for each level of care by the 
proposed FY 2025 wage index and FY 2024 payment rates, we obtain a wage 
index standardization factor for each level of care. We apply the wage 
index standardization factors 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 these changes could make it difficult 
to predict accurately the full scope of the impact upon hospices.
2. Hospice Quality Reporting Program
    As proposed in section III. of this proposed rule, we are requiring 
implementation of a hospice patient-level item set to be used by all 
hospices to collect and submit standardized data on each patient 
admitted to hospice. Based on the cost estimates provided in the 
Collection of Information section above, we estimate an annual cost 
burden of $184,729,739 across all hospices ($32,764.67 per hospice x 
5,640 hospices) starting in FY 2026.
BILLING CODE 4120-01-P

[[Page 23829]]

[GRAPHIC] [TIFF OMITTED] TP04AP24.039

    Our proposal would therefore result in a 2,487,466-hour annual 
burden (1,243,733 hours for HOPE Admissions, 1,243,733 hours for HOPE 
Update Visits, and 0 hours for HOPE Discharges). The total cost burden 
per hospice ($32,764.67) is calculated by adding the total nursing cost 
with the total clerical staff cost burden. This leads to a cost burden 
of $184,792,739 across all hospices ($32,764.67 per hospice x 5,640 
hospices). This burden is also discussed in detail as part of an 
accompanying PRA submission.

C. Detailed Economic Analysis

1. Proposed Hospice Payment Update for FY 2025
    The FY 2025 proposed hospice payment impacts appear in Table 19. 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, other), 
facility location, and 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 2025 updated wage index 
data and moving from the old OMB delineations to the new revised OMB 
delineations with a 5-percent cap on wage index decreases. The 
aggregate impact of the changes in column three is zero percent, due to 
the hospice wage index standardization factors. However, there are 
distributional effects of using the FY 2025 hospice wage index. The 
fourth column shows the effect of the proposed hospice payment update 
percentage as mandated by section 1814(i)(1)(C) of the Act and is 
consistent for all providers. The proposed hospice payment update 
percentage of 2.6 percent is based on the proposed 3.0 percent 
inpatient hospital market basket percentage increase reduced by a 
proposed 0.4 percentage point productivity adjustment. The fifth column 
shows the total effect of the updated wage data and the hospice payment 
update percentage on FY 2025 hospice payments. As illustrated in Table 
20, the combined effects of all the proposals vary by specific types of 
providers and by location. We note that simulated payments are based on 
utilization in FY 2023 as seen on Medicare hospice claims (accessed 
from the CCW on January 11, 2024) 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 20, the combined effects of all the 
proposals

[[Page 23830]]

vary by specific types of providers and by location.
[GRAPHIC] [TIFF OMITTED] TP04AP24.040


[[Page 23831]]


[GRAPHIC] [TIFF OMITTED] TP04AP24.041


 
 
 
Source: FY 2023 hospice claims data from CCW accessed on January 11,
 2024.
Note:The overall total impact reflects the addition of the individual
 impacts, which includes the updated wage index data and revised OMB
 delineations, as well as the 2.6 percent market basket update.
Due to missing Provider of Services file information (from which hospice
 characteristics are obtained), some subcategories in the impact tables
 have fewer agencies represented than the overall total (of 6,044).
 Subtypes involving ownership only add up to 5,624 while subtypes
 involving facility type only add up to 5,621.
Region Key:
New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode
 Island, Vermont
Middle Atlantic = Pennsylvania, New Jersey, New York
South Atlantic = Delaware, District of Columbia, Florida, Georgia,
 Maryland, North Carolina, South Carolina, Virginia, West Virginia
East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin
East South Central = Alabama, Kentucky, Mississippi, Tennessee
West North Central = Iowa, Kansas, Minnesota, Missouri, Nebraska, North
 Dakota, South Dakota
West South Central = Arkansas, Louisiana, Oklahoma, Texas
Mountain = Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah,
 Wyoming
Pacific= Alaska, California, Hawaii, Oregon, Washington
Outlying = Guam, Puerto Rico, Virgin Islands
 


[[Page 23832]]

2. Impacts for the Hospice Quality Reporting Program for FY 2025
    The HQRP requires the active collection under OMB control number 
#0938-1153 (CMS 10390; expiration 01/31/2026) of the Hospice Items Set 
(HIS) and CAHPS[supreg] Hospice Survey (OMB control number 0938-1257 
(CMS-10537; expiration 07/31/2026). Failure to submit data required 
under section 1814(i)(5) of the Act with respect to a CY will result in 
the reduction of the annual market basket percentage increase otherwise 
applicable to a hospice for that calendar year.
    Once adopted, the Federal Government would incur costs related to 
the transition from HIS to HOPE. These costs would include provider 
training, preparation of HOPE manuals and materials, receipt and 
storage of data, data analysis, and upkeep of data submission software. 
There are costs associated with the maintenance and upkeep of a CMS-
sponsored web-based program that hospice providers would use to submit 
their HOPE data. In addition, the Federal Government would also incur 
costs for help-desk support that must be provided to assist hospices 
with the data submission process. There would also be costs associated 
with the transmission, analysis, processing, and storage of the hospice 
data by CMS contractors.
    Also, pursuant to section 1814(i)(5)(A)(i) of the Act, hospices 
that do not submit the required QRP data would receive a 4 percentage 
point reduction of the annual market basket increase. The Federal 
Government will incur additional costs associated with aggregation and 
analysis of the data necessary to determine provider compliance with 
the reporting requirements for any given fiscal year.
    The total annual cost to the Federal Government for the 
implementation and ongoing management of HOPE data is estimated to be 
$1,583,500. As this estimate is the same as the current estimated costs 
to the Federal Government associated with HIS, HOPE implementation and 
ongoing maintenance would not incur additional annual costs.
    The estimated costs to hospice providers associated with HOPE are 
calculated as follows:
Part 1. Time Burden
[GRAPHIC] [TIFF OMITTED] TP04AP24.042

[GRAPHIC] [TIFF OMITTED] TP04AP24.043


[[Page 23833]]


[GRAPHIC] [TIFF OMITTED] TP04AP24.044

Part 2. Cost/Wage Calculation
    Note that this analysis of HOPE costs presents rounded inputs for 
each calculation and based on the incremental increase of burden from 
the HIS timepoints. The actual calculations were performed using 
unrounded inputs, so the outputs of each equation below may vary 
slightly from what would be expected from the rounded inputs.
[GRAPHIC] [TIFF OMITTED] TP04AP24.045


[[Page 23834]]


[GRAPHIC] [TIFF OMITTED] TP04AP24.046

BILLING CODE 4120-01-C
    Additional details regarding these costs and calculations are 
available in the FY 2025 PRA package.
3. Regulatory Review Cost Estimation
    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 this rulemaking, 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. We welcome any comments on the 
approach to estimating the number of entities that will review this 
proposed rule. We also recognize that different types of entities are 
in many cases affected by mutually exclusive sections of this proposed 
rule, and therefore for the purposes of our estimate we assume that 
each reviewer reads approximately 50 percent of the rulemaking. We are 
soliciting public comments on this assumption.
    Using the occupational wage information from the BLS for medical 
and health service managers (Code 11-9111) from May 2022; we estimate 
that the cost of reviewing this rulemaking is $100.80 per hour, 
including overhead and fringe benefits (https://www.bls.gov/oes/current/oes119111.htm). This proposed rule consists of approximately 
34,385 words. Assuming an average reading speed of 250 words per 
minute, it would take approximately 1 hour for staff to review half of 
it. For each hospice that reviews the proposed rule, the estimated cost 
is $100.80 (1 hour x $100.80). Therefore, we estimate that the total 
cost of reviewing this regulation is $8,064.00 ($100.80 x 80 
reviewers).

D. Alternatives Considered

1. Hospice Payment
    For the FY 2025 Hospice Wage Index and Rate Update proposed rule, 
we considered alternatives to the proposals articulated in section 
III.A of this proposed rule. We considered not proposing to adopt the 
OMB delineations listed in OMB Bulletin 23-01; however, we have 
historically adopted the latest OMB delineations in subsequent 
rulemaking after a new OMB Bulletin is released.
    Since the hospice payment update percentage is determined based on 
statutory requirements, we did not consider alternatives to updating 
the hospice payment rates by the payment update percentage. The 
proposed 2.6 percent hospice payment update percentage for FY 2025 is 
based on a

[[Page 23835]]

proposed 3.0 percent inpatient hospital market basket update for FY 
2025, reduced by a proposed 0.4 percentage point productivity 
adjustment. Payment rates since FY 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 years must be the market basket 
percentage increase for that FY. Section 3401(g) of the Affordable Care 
Act also mandates that, starting with FY 2013 (and in subsequent 
years), the hospice payment update percentage will be annually reduced 
by changes in economy-wide productivity as specified in section 
1886(b)(3)(B)(xi)(II) of the Act. For FY 2025, since the hospice 
payment update percentage is determined based on statutory requirements 
at section 1814(i)(1)(C) of the Act, we did not consider alternatives 
for the hospice payment update percentage.
2. Hospice Quality Reporting Program
    CMS considered proposing the HOPE instrument with more items, 
including data collection about the treatment and activities provided 
by multiple disciplines (such as medical social workers (MSW) and 
chaplains). However, CMS ultimately omitted those additional items, and 
is only proposing HOPE with items deemed relevant to current and 
planned quality measurement and public reporting activities.
    CMS considered proposing that hospices only need to collect HOPE 
data during one HUV rather than two. CMS considered changing the data 
submission requirement from thirty (30) days to fifteen (15) days. 
However, CMS determined that such a change would provide minimal 
benefit at this time while also being disruptive to hospice providers 
and this was not proposed.

E. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf), in 
Table 22, we have prepared an accounting statement showing the 
classification of the expenditures associated with the provisions of 
this proposed rule. Table 22 provides our best estimate of the possible 
changes in Medicare payments under the hospice benefit as a result of 
the policies in this rulemaking. This estimate is based on the data for 
6,044 hospices in our impact analysis file, which was constructed using 
FY 2023 claims (accessed from the CCW on January 11, 2024). All 
expenditures are classified as transfers to hospices. Also, Table 22 
also provides the impact costs associated with the Hospice Quality 
Reporting Program starting FY 2026.
[GRAPHIC] [TIFF OMITTED] TP04AP24.047


[[Page 23836]]



F. Regulatory Flexibility Act (RFA)

    The RFA requires agencies to analyze options for regulatory relief 
of small entities if a rulemaking has a significant impact on a 
substantial number of small entities. For purposes of the RFA, small 
entities include small businesses, nonprofit organizations, and small 
jurisdictions. We consider all hospices as small entities as that term 
is used in the RFA. The North American Industry Classification System 
(NAICS) was adopted in 1997 and is the current standard used by the 
Federal statistical agencies related to the U.S. business economy. 
There is no NAICS code specific to hospice services. Therefore, we 
utilized the NAICS U.S. industry title ``Home Health Care Services'' 
and corresponding NAICS code 621610 in determining impacts for small 
entities. The NAICS code 621610 has a size standard of $19 million.\32\ 
Table 23 shows the number of firms, revenue, and estimated impact per 
home health care service category.
---------------------------------------------------------------------------

    \32\ Ibid.
    INK ``https://www.sba.gov/sites/sbagov/files/2023-03/
Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%281
%29%20%281%29_0.pdf''https://www.sba.gov/sites/sbagov/files/2023-03/
Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%281
%29%20%281%29_0.pdf.
[GRAPHIC] [TIFF OMITTED] TP04AP24.048

    The Department of Health and Human Services' practice in 
interpreting the RFA is to consider effects economically 
``significant'' only if greater than 5 percent of providers reach a 
threshold of 3 to 5 percent or more of total revenue or total costs. 
The majority of hospice visits are Medicare paid visits, and therefore 
the majority of hospice's revenue consists of Medicare payments. Based 
on our analysis, we conclude that the policies proposed in this 
rulemaking would result in an estimated total impact of 3 to 5 percent 
or more on Medicare revenue for greater than 5 percent of hospices. 
Therefore, the Secretary has certified that this hospice proposed rule 
would have significant economic impact on a substantial number of small 
entities. We estimate that the net impact of the policies in this rule 
is 2.6 percent or approximately $705 million in increased revenue to 
hospices in FY 2025. The 2.6 percent increase in expenditures when 
comparing FY 2024 payments to estimated FY 2025 payments is reflected 
in the last column of the first row in Table 19 and is driven solely by 
the impact of the hospice payment update percentage reflected in the 
fifth column of the impact table. In addition, small hospices would 
experience a greater estimated increase (X percent), compared to large 
hospices (X percent) due to the proposed updated wage index. Further 
detail is presented in Table 19 by hospice type and location.
    We estimate that the new impact of the proposed HQRP data 
collection requirements would be $32,764.81 per hospice. While small 
hospices would be estimated to incur the same data collection impact as 
all other hospices, we recognize that the impact value is likely to 
represent a larger percentage of small provider costs. HOPE already 
minimizes the burden that Information Collection Requests (ICRs) place 
on the provider. The type of quality data specified for participation 
in the HQRP is already currently collected by hospices as part of their 
patient care processes.
    In addition, section 1102(b) of the 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 MSA and has fewer 
than 100 beds. This rulemaking would only affect hospices. Therefore, 
the Secretary has determined that this proposed rule would not have a 
significant impact on the operations of a substantial number of small 
rural hospitals (see Table 19).

G. Unfunded Mandates Reform Act (UMRA)

    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. In 2024, that

[[Page 23837]]

threshold is approximately $183 million. This rulemaking is anticipated 
to have an effect on State, local, or Tribal governments, in the 
aggregate, or on the private sector of $183 million or more in any 1 
year.

H. Federalism

    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 rulemaking under these criteria of 
Executive Order 13132 and have determined that it will not impose 
substantial direct costs on State or local governments.

I. Conclusion

    We estimate that aggregate payments to hospices in FY 2025 would 
increase by $705 million as a result of the proposed hospice payment 
update, compared to payments in FY 2024. We estimate that in FY 2025, 
hospices in urban areas would experience, on average, a 2.6 percent 
increase in estimated payments compared to FY 2024; while hospices in 
rural areas would experience, on average, a 2.8 percent increase in 
estimated payments compared to FY 2024. Hospices providing services in 
the Mountain region would experience the largest estimated increases in 
payments of 4.2 percent. Hospices serving patients in areas in the 
Pacific regions would experience, on average, the lowest estimated 
increase of 0.8 percent in FY 2025 payments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on March 20, 2024.

List of Subjects in 42 CFR Part 418

    Health facilities, Hospice care, Medicare, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV, part 418 as 
set forth below:

PART 418--HOSPICE CARE

0
1. The authority citation for part 418 continues to read as follows:

    Authority: 42 U.S.C. 1302 and 1395hh.

0
2. Section 418.22 is amended by revising paragraph (c)(1)(i) to read as 
follows:


Sec.  418.22  Certification of terminal illness.

* * * * *
    (c) * * *
    (1) * * *
    (i) The medical director of the hospice, the physician designee (as 
defined in Sec.  418.3), or the physician member of the hospice 
interdisciplinary group; and
* * * * *
0
3. Section 418.24 is amended by--
0
a. Revising paragraphs (a) and (b)(3);
0
b. Redesignating paragraphs (e) through (h) as paragraphs (f) through 
(i), respectively; and
0
c. Adding a new paragraph (e).
    The revisions and addition read as follows:


Sec.  418.24  Election of hospice care.

    (a) Election statement. An individual who meets the eligibility 
requirement of Sec.  418.20 may file an election statement with a 
particular hospice. If the individual is physically or mentally 
incapacitated, his or her representative (as defined in Sec.  418.3) 
may file the election statement.
    (b) * * *
    (3) Acknowledgement that the individual has been provided 
information on the hospice's coverage responsibility and that certain 
Medicare services, as set forth in paragraph (g) of this section, are 
waived by the election. For Hospice elections beginning on or after 
October 1, 2020, this would include providing the individual with 
information indicating that services unrelated to the terminal illness 
and related conditions are exceptional and unusual and hospice should 
be providing virtually all care needed by the individual who has 
elected hospice.
* * * * *
    (e) Notice of election. The hospice chosen by the eligible 
individual (or his or her representative) must file the Notice of 
Election (NOE) with its Medicare contractor within 5 calendar days 
after the effective date of the election statement.
    (1) Consequences of failure to submit a timely notice of election. 
When a hospice does not file the required Notice of Election for its 
Medicare patients within 5 calendar days after the effective date of 
election, Medicare will not cover and pay for days of hospice care from 
the effective date of election to the date of filing of the notice of 
election. These days are a provider liability, and the provider may not 
bill the beneficiary for them.
    (2) Exception to the consequences for filing the NOE late. CMS may 
waive the consequences of failure to submit a timely-filed NOE 
specified in paragraph (e)(1) of this section. CMS will determine if a 
circumstance encountered by a hospice is exceptional and qualifies for 
waiver of the consequence specified in paragraph (e)(1) of this 
section. A hospice must fully document and furnish any requested 
documentation to CMS for a determination of exception. An exceptional 
circumstance may be due to, but is not limited to, the following:
    (i) Fires, floods, earthquakes, or similar unusual events that 
inflict extensive damage to the hospice's ability to operate.
    (ii) A CMS or Medicare contractor systems issue that is beyond the 
control of the hospice.
    (iii) A newly Medicare-certified hospice that is notified of that 
certification after the Medicare certification date, or which is 
awaiting its user ID from its Medicare contractor.
    (iv) Other situations determined by CMS to be beyond the control of 
the hospice.
0
4. Amend Sec.  418.25 by revising paragraph (a) and paragraph (b) 
introductory text to read as follows:


Sec.  418.25  Admission to hospice care.

    (a) The hospice admits a patient only on the recommendation of the 
medical director (or the physician designee, as defined in Sec.  418.3) 
in consultation with, or with input from, the patient's attending 
physician (if any).
    (b) In reaching a decision to certify that the patient is 
terminally ill, the hospice medical director (or the physician 
designee, as defined in Sec.  418.3) must consider at least the 
following information:
* * * * *
0
5. Section 418.102 is amended by revising paragraph (b) introductory 
text and paragraph (c) to read as follows:


Sec.  418.102  Condition of participation: Medical director.

* * * * *
    (b) Standard: Initial certification of terminal illness. The 
medical director (or physician designee, if the medical director is 
unavailable, as defined in Sec.  418.3 of this section) or physician 
member of the IDG reviews the clinical information for each hospice 
patient and provides written certification that it is anticipated that 
the patient's life expectancy is 6 months or less if the illness runs 
its normal course. The physician must consider the following when 
making this determination:
* * * * *

[[Page 23838]]

    (c) Standard: Recertification of the terminal illness. Before each 
recertification period for each patient, as described in Sec.  
418.21(a), the medical director (or physician designee, if the medical 
director is unavailable, as defined in Sec.  418.3 of this section) or 
physician member of the IDG must review the patient's clinical 
information.
* * * * *


Sec.  418.309  [Amended]

0
6. Section 418.309 is amended in paragraphs (a)(1) and (2) by removing 
``2032'' and adding in its place ``2033''.
0
7. Section 418.312 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  418.312  Data submission requirements under the hospice quality 
reporting program.

* * * * *
    (b) * * *
    (1) Hospices are required to complete and submit a standardized set 
of items for each patient to capture patient-level data, regardless of 
payer or patient age. The standardized set of items must be completed 
no less frequently than at admission, the hospice update visit (HUV), 
and discharge, as directed in the associated guidance manual and 
required by the Hospice Quality Reporting Program. Definitions for 
changes in patient condition that warrant updated assessment, as well 
as the data elements to be completed for each applicable change in 
patient condition, are to be provided in sub-regulatory guidance for 
the current standardized hospice instrument.
* * * * *

Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-06921 Filed 3-28-24; 4:15 pm]
BILLING CODE 4120-01-P