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From Health Law Daily, May 5, 2014

Hospice payment rate and wage index updates for FY 2015 proposed

By Harold M. Bishop, JD

The proposed hospice payment rates and the wage index for fiscal year (FY) 2015 will be published by CMS on May 8, 2014. The proposed updates incorporate the use of updated hospital wage index data, the sixth year of the 7-year Budget Neutrality Adjustment Factor (BNAF) phase-out, and an update to the hospice payment rates by the hospice payment update percentage.

The proposed rule also: (1) provides an update of CMS’ hospice payment reform activities; (2) solicits comments on the definitions of “terminal illness” and “related conditions,” and process and appeals for Part D payment for drugs while beneficiaries are under a hospice election; (3) suggests timeframes for filing the hospice notice of election and the notice of termination/revocation, adding the attending physician to the hospice election form, expediting hospice inpatient and aggregate cap determinations, and updates to the hospice quality reporting program; (4) provides guidance on determining a patient’s eligibility for hospice; (5) discusses the delay in the implementation of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM); (6) clarifies how hospices would report diagnoses, in accordance with current ICD-9-CM guidelines, on hospice claims; and (7) proposes a technical change to regulations deleting an outdated definition of the term “social worker.”

The overall economic impact of this proposed rule is estimated to be $230 million in increased payments to hospices during FY 2015. The total cost of the proposed FY 2015 quality reporting requirements is estimated to be $8.77 million.

Payment rates and wage index. CMS proposes to update the hospice payment rates for FY 2015 by 1.3 percent. This proposed payment increase is the result of a proposed payment update to the hospice per diem rates of 2 percent (a “hospital market basket” increase of 2.7 percent minus 0.7 percentage point for reductions mandated by law), and a 0.7 percent decrease in payments to hospices due to updated wage data and the sixth year of CMS’ seven-year phase-out of its wage index BNAF. This would bring the total BNAF reduction to 85 percent, with the phase-out of the BNAF complete by FY 2016.

Update of hospice payment reform activities. In 2010, section 1814(i)(6) of the Social Security Act was amended by section 3132(a) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The amendment authorized CMS to collect additional data and information determined appropriate to revise payments for hospice care. Since 2010, CMS has been working with its hospice reform contractor, Abt Associates, to review the most current peer-reviewed literature, conduct research and analyses, identify potential vulnerabilities in the current payment system, and research and develop hospice payment model options. CMS reports that it recently required additional information on hospice claims regarding drugs and certain durable medical equipment, and is in the process of finalizing changes to the hospice cost report to better collect data on the costs of providing hospice care. CMS plans to use the additional information in the hospice cost report in its hospice payment reform efforts, once the data are available for analysis.

Definitions of “terminal illness” and “related conditions.” Since the implementation of the Medicare hospice benefit, CMS has defined a “terminally ill” individual to mean “that the individual has a medical prognosis that his or her life expectancy is six months or less if the illness runs its normal course” (42 CFR Sec. 418.3). In interpreting “terminally ill,” CMS has always expected that the individual’s whole condition would play a role in that prognosis. According to CMS, however, comments received from industry state that longstanding, preexisting conditions should not be considered related to a patient’s terminal illness or related conditions and that chronic, stable conditions play little to no role in a patient’s terminal illness or related conditions. Commenters have also told CMS that controlled pain and symptoms are not considered to be related to a patient’s terminal illness or related conditions and that the maintenance of comorbidities are not related to a patient’s terminal illness or related conditions. These commenters believe these types of conditions should not be included in the bundle of services covered under the Medicare hospice benefit. As a result of these concerns, CMS is soliciting comments on definitions of “terminal illness” and “related conditions” in order to strengthen and clarify the current concepts of holistic and comprehensive hospice care under the Medicare hospice benefit.

Guidance on determining eligibility. CMS’ proposal reminds providers to use their expert clinical judgment in determining eligibility for hospice services. In addition, CMS expects that documentation supporting a 6-month or less life expectancy is included in the beneficiary’s medical record and available to the Medicare Administrative Contractor (MAC) when requested.

Timeframes for hospice cap determinations and overpayment remittances. For the 2014 cap year and subsequent cap years, CMS proposes to require that hospices complete their inpatient and aggregate caps determination within five months after the cap year ends (by March 31) and remit any overpayments at that time. The MACs would then reconcile all payments at the final cap determination. If a provider fails to file its inpatient and aggregate cap determination 150 days after the end of the cap year, CMS proposes that payments to the provider would be suspended in whole or in part until the self-determined cap is filed with the Medicare contractor. CMS further proposes that payments to a hospice would be suspended in whole or in part, for failure to file a self-determined inpatient and aggregate cap determination.

Timeframes for filing NOE and NOTR. The late filing of the notice of election (NOE) can result in inaccurate benefit period data and leaves Medicare vulnerable to paying non-hospice claims related to the terminal illness and related conditions and beneficiaries liable for cost sharing costs. As a result, CMS proposes to require hospices to file both the NOE and the notice of termination / revocation (NOTR) on behalf of beneficiaries within three calendar days of admission or discharge. If an NOE is not filed timely, the days from the effective date of election to the date of filing of the NOE would be the financial responsibility of the hospice.

Adding “attending physician” to the hospice election form. According to CMS, more than one-third of hospice patients had multiple providers submit Part B claims as the “attending physician.” To ensure that the attending physician of record is properly documented in the patient’s medical record, CMS proposes requiring the election statement to include the patient’s choice of attending physician. Under the proposal, the information identifying the attending physician would be recorded on the election statement in enough detail so that it is clear which physician or nurse practitioner was designated as the attending physician.

Updates to hospice quality reporting program. The proposed rule discusses updates to the hospice quality reporting program, including participation requirements for calendar year 2015 regarding the Consumer Assessment of Healthcare Providers and Systems hospice survey, known as the CAHPS® Hospice Survey. CMS reminds the hospice industry that July 1, 2014, is the implementation date for the Hospice Item Set and January 1, 2015, is the implementation date for the CAHPS Hospice Survey. CMS also proposes changes related to the reconsideration process, extraordinary circumstance extensions or exemptions, and hospice quality reporting program (HQRP) eligibility requirements for newly certified hospices.

Part D drugs. Drugs and biologicals for which coverage is available under the Medicare Part A per diem payment to a hospice program are excluded from coverage under Part D. Therefore, CMS is soliciting comments on processes that Part D plan sponsors could use to coordinate with Medicare hospices in determining clear payment responsibility for coverage of drugs for hospice beneficiaries and resolving disagreements between the parties.

ICD-10-CM delay. The proposed rule reminds hospice providers that section 212 of the Protecting Access to Medicare Act of 2014 (PAMA) (P. L. 113-93) delayed the transition from ICD-9-CM to the ICD-10-CM code sets until at least October 1, 2015. According to the proposed rule, this means that ICD-9-CM diagnosis codes will continue to be used for hospice claims reporting until an implementation date for ICD-10-CM is announced. Therefore, diagnosis reporting on hospice claims must adhere to ICD-9-CM coding conventions and guidelines regarding the selection of principal diagnosis and the reporting of additional diagnoses.

MainStory: TopStory HospiceNews CMSNews BillingNews DrugBiologicalNews DMENews HealthReformNews MedicaidPaymentNews MedicareContractorNews PaymentNews PartANews PartBNews PartDNews PrescriptionDrugNews

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