Hospices see modest payment increase, new clinical doc reporting for FY 2018

Hospices serving Medicare beneficiaries would hospices would generally see a $180 million or 1 percent increase in their payments for fiscal year (FY) 2018 under a Proposed rule updating the hospice wage index, payment rates, and cap amounts. In an advance release of the Proposed rule, CMS also detailed new quality measure concepts under consideration for future years, solicited feedback on an enhanced data collection instrument, and described plans to publicly display quality measure data via the Hospice Compare website in 2017. CMS also seeks comments regarding the sources of clinical information for certifying terminal illness and would change the Hospice Quality Reporting Program (Hospice QRP), including adding new quality measures utilizing data collected in the Hospice Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Survey. The Proposed rule is set to publish May 3, 2017.

Annual rates

Section 411(d) of the Medicare Access and CHIP Reauthorization Act of 2015 (P.L. 114-10) (MACRA) amends section 1814(i) of the Social Security Act setting the market basket percentage for hospices in FY 2018 to 1 percent. This translates to about $180 million for hospices in the next fiscal year. In addition to the basket percentage increase, the cap amount for accounting years that end after September 30, 2016, and before October 1, 2025, must be updated by the hospice payment update percentage, rather than the Consumer Price Index (CPI). Therefore, the cap amount for FY 2018 will be $28,689.04 compared to the 2017 cap amount of $28,404.99.

Hospice CAHPS Survey

The Hospice CAHPS® Survey is a component of the Hospice Quality Reporting Program and is important for the hospice community because the results of the survey will allow for comparisons on a national basis. CMS noted that the data would help beneficiaries to select a hospice program, as well as encourage hospices to improve quality of care. Under the Proposed rule, two global CAHPS measures would be adopted. CMS expects to begin public reporting via a Hospice Compare Site in CY 2017 to help customers make informed choices.

Terminal illnesses

CMS’ expectation is that a referring physician/acute/post-acute care facility’s clinical documentation serves as the basis of the certification of terminal illness. As such, the agency is seeking comments on a clarifying proposal that would identify the source of clinical information, whether a referring physician or acute care facility, when certifying that life expectancy in a hospice situation is six months or less. CMS also wants to explore whether the use of clinical documentation from an in-person visit from the hospice medical director or the hospice physician member of the interdisciplinary group could support the certification of terminal illness and whether such documentation is needed to augment the clinical information from the referring physician/facility’s medical records.

Measures under consideration

CMS offered no new proposed measures, but did seek additional feedback on two claims-based measures under future consideration: (1) avoiding hospice care transitions and (2) accessing levels of hospice care. The agency noted it would be detailing the measures in future rulemaking.

CMS solicits applications for Rural Community Hospital Demonstration

CMS is soliciting applications for additional hospitals to participate in the Rural Community Hospital Demonstration Program, which tests payment under a reasonable cost-based methodology for Medicare inpatient hospital services furnished by eligible rural hospitals. No more than 30 hospitals can participate in the program at the same time. Applications are due May 17, 2017, and CMS’ goal is to finalize selections by June 2017.

Section 410A of the Medicare Modernization Act (MMA) (P.L. 108-173) originally authorized the demonstration for five years, and Sections 3123 and 10313 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) extended it for another five-year period. Section 15003 of the 21st Century Cures Act (P.L. 114-255) again amended section 410A to require another five-year extension of the demonstration (see 21st Century Cures clears House, now set for Senate vote, December 1, 2016).

Eligibility

To be eligible to participate in the program, a hospital must: (1) be located in a rural area or be treated as such pursuant to Soc. Sec. Act Sec. 1886(d)(8)(E); (2) have fewer than 51 acute care inpatient beds, as reported in its most recent cost report; (3) make available 24-hour emergency care services; and (4) not be designated or eligible for designation as a critical access hospital pursuant to Soc. Sec. Act Sec. 1820.

Hospitals that were participating in the demonstration as of the last day of the initial five-year period or as of December 30, 2014 may participate in this second extension period, unless the hospital elects to discontinue participation. A newly selected hospital may be located in any state; however, priority will be given to hospitals located in one of the 20 states with the lowest population densities.

Payment

For discharges occurring in the first cost reporting period on or after the implementation of the extension, hospitals participating in the demonstration will receive payment for their reasonable costs of providing covered inpatient hospital services (except for services furnished in a psychiatric or rehabilitation unit that is a distinct part of the hospital). For discharges occurring during the second or later cost reporting period, hospitals will be paid the lesser of their reasonable costs or a target amount.

For most of the previously participating hospitals, there is a gap between the end date of the hospital’s participating in the first five-year extension and the enactment of the Cures Act on December 13, 2016 that the legislation did not address. In the fiscal year 2018 hospital inpatient prospective payment system (IPPS) Proposed rule, CMS solicited comments on proposed terms of continuation for previously participating hospitals (see IPPS spending to increase $3B, LTCH PPS to decrease $173B, April 17, 2017).

The MMA requires the demonstration to be budget neutral. The IPPS proposed rule detailed the status of the demonstration and the methodology for ensuring budget neutrality.

CMS delays implementation of bundled payment models

CMS has further delayed the implementation date of the Cardiac Rehabilitation (CR) Incentive Payment model and modifications to the Comprehensive Care for Joint Replacement (CJR) model by three months. This additional delay, CMS said, is necessary to allow time for additional review, to ensure that the agency has adequate time to undertake notice and comment rulemaking to modify the policy if modifications are warranted, and to ensure that in such a case participants have a clear understanding of the governing rules and are not required to take needless compliance steps due to the rule taking effect for a short duration before any potential modifications are effectuated.

CMS issued a final rule on the two models January 3, 2017. Pursuant to the Trump Administration’s “Regulatory Freeze Pending Review” memorandum, on February 17, 2017, CMS issued a final rule that delayed the effective date of the January 3, 2017 final rule, for provisions that were to become effective on February 18, 2017, to March 21, 2017. CMS’ March 21, 2017, interim final rule postponed the effective date of the January 3, 2017 final rule from March 21, 2017, until May 20, 2017. The applicability date of the new regulations at 42 C.F.R. Part 512 and specific CJR regulations are delayed from July 1, 2017, until October 1, 2017. CMS sought comments on a longer delay of the model start date, including to January 1, 2018.

Under the CJR model, which began April 1, 2016, acute-care hospitals in certain areas receive retrospective bundled payments for episodes of care for hip and knee replacements. All related care within 90 days of hospital discharge from the joint replacement procedure is included in the episode of care. The January 3, 2017, final rule made several changes to the model.

Under the CR Incentive Payment model, acute care hospitals in certain geographic areas will receive retrospective incentive payments for beneficiary utilization of cardiac rehabilitation/intensive cardiac rehabilitation services during the 90 days following hospitalization for an acute myocardial infarction or coronary artery bypass graft surgery.

The American Hospital Association criticized the pace of these mandatory demonstration projects as “too much, too soon” and said, “We will continue to urge that any new bundled payment programs be of a voluntary nature.” In addition, HHS Secretary Tom Price has asserted that CMS exceeded its authority with bundled payment initiatives like the CR and CJR models.

MedPAC votes to recommend recalculation of MA benchmarks

The Medicare Payment Advisory Commission (MedPAC) unanimously voted to recommend that the HHS Secretary modify the calculation of Medicare Advantage (MA) benchmarks. The recommended change, discussed at the January 12, 2017, MedPAC meeting, would increase spending between $750 million and $2 billion over one year and between $5 billion to $10 billion over five years. Mark Miller, executive director of MedPAC, suggested, however, that previous coding recommendations from the June 2016 report could offset the increased cost.

CMS sets the MA county benchmark based on the average risk-adjusted per capita Part A and Part B fee-for-service (FFS) spending in the county. While this calculation includes all beneficiaries in Part A or Part B, MA enrollees must be in both Part A and Part B. MedPAC policy analyst Scott Harrison noted that 12 percent of FFS beneficiaries are enrolled in Part A only, and Part A-only beneficiaries spend less than half than what those with Part A and Part B spend on Part A. This, he said results in an underestimate of FFS spending compared to MA spending, which leads, in turn, to an understatement of MA benchmarks.

To make calculations more reflective of MA enrollment, the members voted on a draft recommendation, which they also discussed at the December 2016 meeting, that the HHS Secretary should calculate MA benchmarks using FFS spending data only for beneficiaries enrolled in both Part A and Part B.

CMS already adjusts the rate calculation in Puerto Rico so that it is based on beneficiaries who are enrolled in both Part A and Part B. In the April 2016 Announcement of Calendar Year 2017 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter, CMS stated in response to a comment that it would consider expanding this Part A and Part B adjustment to all counties in the future.

At the same meeting, MedPAC also voted to recommend that the Secretary should require hospitals to add a modifier on claims for all surgical services provided at off-campus, stand-alone emergency department facilities. The modifier would allow Congress and CMS to track the growth of off-campus emergency departments, which are reimbursed at higher rates than urgent care centers.