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From Health Law Daily, May 1, 2015

Proposed hospice rules would IMPACT potential for abuse

By Michelle L. Oxman, J.D., LL.M.

CMS’ proposed changes to the requirements for hospice payment for fiscal year (FY) 2016 would complete the phase-out of the budget neutrality adjustment factor, begin a two-year transition to new core-based statistical areas, and align the calendars used to compute the caps with the annual payment update, as required by the Improving Medicare Post-Acute Care Transformation (IMPACT) Act (P.L. 113-185). CMS also proposes to survey hospices every three years and to review the medical records of patients who are in hospice care longer than 180 days, as required by the IMPACT law.

Payment update. The market basket update for FY 2016 would be 1.8 percent. CMS estimates that payments to hospices would increase by about $200 million. FY 2016 will be the final year of the seven-year phase-out of the budget neutrality adjustment factor (BNAF). The BNAF will reduce payments by 0.7 percent.

CBSA transition. Payments also will be affected by the adoption of a new wage index using the Core-Based Statistical Areas (CBSAs) released by the Office of Management and Budget based on the 2010 census. CMS proposes to apply both the current and the new CBSAs, each for 50 percent of the payment in FY 2016. In FY 2017, the entire payment would be calculated using the new CBSAs.

Two daily rates for routine home care. Because of research showing that the later days of longer hospice stays usually involve fewer minutes per day of care than shorter stays, CMS proposes to set one daily rate for the first 60 days of hospice care and a lower daily rate beginning with day 61. The labor portion of the daily rate would be $ 137.48 for the first 60 days and $95.48 thereafter.

Service intensity add-on. Pursuant to Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) Sec. 3132, CMS is collecting more data on diagnoses and resource use to inform future changes to the hospice payment system. As part of its effort to make the payment system as accurate as possible, CMS proposes to make an additional payment, called a service-intensity add-on (SIA) for the additional time and resources used during the last seven days of a hospice patient’s life. The SIA would help to make the payment reflect the U-shaped pattern of resource use in hospice care, in which the most intensive services are furnished at the beginning and at the end of the stay. The SIA would not be available in every case. It would be limited to situations where: (1) routine home care is provided; (2) with visits from a registered nurse or social worker; (3) during the last seven days before the patient’s death; and (4) the setting is not a nursing facility or skilled nursing facility.

Every diagnoses on claim form. Under the proposed rule, the hospice claim would have to list every diagnosis the patient had, regardless of whether it was related to the terminal condition. CMS believes the change is necessary to ensure that hospices perform and update comprehensive assessments for each patient on admission and when there is a change in the patient’s condition as required. The existing regulations require a listing of all diagnoses related to the terminal condition, but there is no consensus in the profession as to when a condition is related to the terminal diagnosis. Some hospice professionals apply the term very narrowly, while others consider nearly every comorbid condition to be related to the terminal diagnosis.

The requirement to list every diagnosis is implemented, in part, to gather data needed to inform future decisions on payment policy.

Quality reporting. Section 3004 of the ACA required CMS to institute a quality reporting program. Hospices were first required to collect quality data in 2012 and to submit it in 2013. Beginning in 2014, the statute also requires CMS to subtract two percentage points from the payments due to hospices that failed to submit the required quality data. The requirement applies to payments for services furnished in FY 2016.

Alignment of hospice caps and with payment update. The inpatient cap and the aggregate cap on payments to hospice have been based upon a different12-month period than the fiscal year. CMS would change the calculation, putting all three matters on the fiscal year from 2017 to 2025. This change is expected to reduce confusion and hospice errors in the calculation of their caps.

MainStory: TopStory ReimbursementNews HospiceNews CMSNews

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