CMS Posts FY2018 Hospice Payment and Quality Reporting Requirements Rule

Following is a NAHC summary of the FY2018 proposed hospice rule:

CMS Posts FY2018 Hospice Payment and Quality Reporting Requirements Rule
–Outlines Public Reporting Plans for Quality Measures and Seeks comment on Sources of Info for 6-month Life Expectancy, Comprehensive Assessment Instrument

Late April 27, the Centers for Medicare & Medicaid (CMS) posted the proposed FY2018 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements.  Instructions for providing comment on the rule are included in the text; they will be accepted through 5 p.m. on June 26, 2017.  In accordance with current law, the rule allows for a 1 percent increase in hospice payments, which equates to an increase of $180 million in hospice outlays; it also updates the hospice wage index using the FY2017 hospital pre-floor, pre-reclassified wage index. As part of the rule, CMS is soliciting comments on amending future rules related to the appropriate source of information for determinations of terminal illness and proposed updates to the Hospice Quality Reporting Program (HQRP). CMS also outlines its plans for launch of Hospice COMPARE in summer 2017, which will be used for public reporting of hospice quality measures. As part of that launch, CMS indicates it will include seven of the Hospice Item Set (HIS) process measures, with public reporting of CAHPS Hospice measures in winter of 2018, and future reporting of the two newest HIS measures (the HIS Composite Measure and the Visits at the End of Life Measures). Additional items are included as part of the following summary.

• For FY2018, the hospice wage index will be based on the FY2017 hospital pre-floor, pre-reclassified wage index. The FY2018 hospice wage index is posted here.

Under the Affordable Care Act (ACA), the hospice update percentage for FY2018 would have been calculated by using the proposed hospital market basket update of 2.9 percent and reducing it by ACA-enacted adjustments (a productivity adjustment estimated at 0.4 percentage point for FY2018 and an additional 0.3 percentage point reduction). However, the Medicare Access and CHIP Reauthorization Act of 2015 mandated that the FY2018 hospice payment update percentage be limited to 1 percent.

Following are CMS’ proposed base payment rates for FY2018 with application of the SBNF to the RHC rates. Please note that the SIA rate is the hourly CHS rate, estimated at $40.68 in FY2018).

Code Description FY2018 Proposed Payment Rates
651 RHC Tier 1 (days 1 – 60) $192.80
651 RHC Tier 2 (days 61+) $151.41
652 CHC
(full rate=24 hours of care)
($40.68 hourly rate) $976.42
655 IRC (Inpatient Respite) $172.78
656 GIP $743.55

The following table provides the breakdown of the labor and non-labor adjusted portions of the payment rates:

RHC 68.71 31.29
CHC 68.71 31.29
GIP 64.01 35.99
IRC (Respite) 54.13 45.87

PLEASE NOTE: CMS indicates that it is currently analyzing the new cost report data for possible use in updating the labor portion of the hospice payment rates. Any changes to the labor portions will be proposed in future rulemaking and will be subject to public comment.

The hospice aggregate cap amount for 2018 will be $28,689.04, which represents the 2017 rate of $28,404.99 updated by the FY2018 payment update percentage of 1.0 percent.


As part of the rule, CMS indicates that while hospice regulations require that the hospice medical director consider at least the following information when making a determination of a six-month life expectancy:

1. Diagnosis of the terminal condition of the patient
2. Other health conditions, whether related or unrelated to the terminal condition
3. Current clinically relevant information supporting all diagnoses

CMS also believes that the source of the clinical information that supports the six month life expectancy is not clearly identified, which raises questions as to what clinical information the hospice medical director is relying on to support the certification of terminal illness. CMS states that without long-term monitoring and evaluation, documentation to support terminal indicators (such as those contained in the LCDs) would not be available, but notes that they would likely be available in the referring physician’s and/or acute/post-acute care facility’s medical records. “The inherent challenges in prognostication make it critical for a hospice to obtain, and the certifying hospice medical director or hospice physician designee to comprehensively review, the patient’s clinical information when making the determination that the patient is terminally ill, and thus eligible for the Medicare hospice benefit.”

In response to these concerns, CMS is soliciting comments for possible future rulemaking on amending the hospice regulations at 418.25 to specify that the referring physician’s and/or the acute/post acute care facility’s medical record should “serve as the basis for the initial hospice eligibility determinations. Clinical information from the referring physician and/or acute/post-acute care facility supporting a terminal prognosis would be obtained by the hospice prior to election of the benefit, when determining certification and subsequent eligibility.” CMS believes this modification would be in alignment with existing benefit eligibility criteria, and could not be determined by hospice documentation obtained after admission. CMS also is soliciting comment on amending hospice regulations at 418.25 to specify that documentation of an in-person visit from the hospice medical director or the hospice physician member of the interdisciplinary group could be used as documentation to support initial hospice eligibility determinations only if needed to augment the clinical information from the referring physician/facility’s medical records. Finally, CMS requests comment on processes used by hospices to ensure comprehensive clinical review to support certification and any alternate suggestions for supporting clinical documentation sources.

As general considerations related to hospice quality measures, the rule indicates that CMS is conducting ongoing review of available studies related to the impact of social risk factors and continues to seek public comment on whether social risk factors should be accounted for in HQRP measures, and what methods might be used to account for them. CMS continues to seek comment on this and also welcomes comment on operational considerations related to inclusion of social risk factors.

Measure Concepts. While CMS is not proposing any new HIS measures, it does continue to consider specific measure concepts for potential proposal in future years. These concepts include measures that promote care that is person-centered, high quality, and safe. CMS has also identified two high priority areas that will be addressed by claims-based measure development:


  • Priority Area 1: Potentially avoidable hospice care transitions – encourage hospice providers to assess and manage patients’ risk of care transitions
  • Priority Area 2: Access to levels of hospice care – assess the rates at which hospices provide different levels of hospice care
  • These two measure concepts are under development, and details regarding measure definitions, specifications and timeline for implementation will be communicated in future rulemaking. CMS is soliciting comments regarding additional high priority concept areas for future measures development.

Existing HIS Measures. CMS is working to secure NQF endorsement of the two HIS-based measures finalized in the FY2017 hospice payment rule (the HIS Composite Measure and the paired measure related to Visits at the End of Life). CMS needs at least four quarters of data to conduct the necessary analyses and to establish measure reliability and validity. Because the composite measure did not require a new collection, the required analysis has already been conducted by contractor RTI for CMS and CMS has submitted the composite measure for endorsement to NQF. Once CMS has four quarters of data related to the Visits at the End of Life paired measure it will conduct the required analysis and submit the measure to NQF for approval.

CMS is not proposing to remove any existing HQRP measures as part of the FY2018 rule.

New Data Collection and Submission Mechanism Under Consideration: Hospice Evaluation & Assessment Reporting Tool (HEART). As discussed in previous rules, CMS is working toward development of a new standardized patient assessment instrument for use by hospices in collection of quality, clinical, and other data. CMS is not proposing such a tool at this time, but it is expected that this tool would eventually replace the existing HIS, and data would be collected using the tool at admission, discharge, and at other times during care. CMS contractor RTI has conducted preliminary work on the tool and engaged clinical experts in working toward determination of which domains of care are important as part of the anticipated patient assessment. Once CMS has moved past the preliminary phases it plans to communicate timelines for HEART development, testing, and implementation to the public. These will be part of future rulemaking cycles.

HQRP Submission Requirements. As finalized in the FY2016 hospice payment rule, beginning January 1, 2018, through December 31, 2018, hospices will be required to submit at least 90 percent of all required HIS records within the 30-day submission timeframe for the year or be subject to a 2 percentage point reduction in their payment rates for FY2020. The threshold will remain at 90 percent for future years.

To meet the FY2020 payment update requirements and avoid the 2 percentage point penalty for failure to report, hospices must also collect Hospice CAHPS survey data during each month of CY2018. As part of the FY2018 proposed rule, CMS is proposing that hospices continue to collect CAHPS survey data on a monthly basis through CY2020.

Extraordinary Circumstances Exemption and Extension. CMS is proposing to extend the deadline for submitting an exemption or extension request from 30 to 90 calendar days from the qualifying event that is preventing a hospice from submitting their quality data for HQRP. CMS is also proposing to extend the policy for exemptions/extensions to submission of CAHPS Hospice Survey data, with the same time frame.

Proposed CAHPS Hospice Survey Measures. CMS is proposing to adopt the eight survey–based CAHPS measures for the CY2018 data collection period and for subsequent years. The measures include:
Six Composite Survey Measures
• Hospice Team Communication
• Getting Timely Care
• Treating Family Member with Respect
• Getting Emotional and Religious Support
• Getting Help for Symptoms
• Getting Hospice Care Training
Two Global Survey-Based Measures
• Rating of Hospice
• Willingness to Recommend
CMS proposed that CAHPS Hospice Survey scores for a given hospice be displayed as “top-box” scores, along with the national average top-box score. Top-box scores reflect the proportion of caregiver respondents that endorse the most positive response(s) to a given measure, such as the number of respondents that rate the hospice at a 9 or 10 out of 10 possible points, or the proportion that report they “always” receive timely care.

CAHPS Risk Adjustment. In order to ensure fair comparisons in public reporting, CMS believes it is necessary to adjust for factors that are not directly related to hospice performance. The survey based measures will be risk adjusted for decedent and caregiver characteristics that are known to be associated with systematic differences in survey responses. They include:

  • • 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 a caregiver
  • • caregiver’s preferred language and language in which the survey was completed
  • • caregiver’s age

Patient Mix/Mode Adjustment: CMS also plans to adjust CAHPS survey responses for differences in patient mix and the mode that is used to survey caregivers (mail, phone, or mix).

Hospice COMPARE/Public Reporting: CMS has determined that all seven HIS quality measures adopted for FY2016 and all subsequent years, calculated on a rolling 12 month data selection period, are eligible for public reporting provided the measure has a minimum denominator of 20 patient stays. The data for the launch of the Hospice COMPARE website will include data for patients discharged during the Fourth Quarter of 2015 through the Third Quarter of 2016 for the following seven HIS measures:
• Treatment Preferences/NQF 1641
• Beliefs/Values Addressed/NQF 1647 modified
• Pain Screening NQF 1634
• Pain Assessment/ and NQF 1637
• Dyspnea Screening NQF 1639
• Dyspnea Treatment/ and NQF 1638
• Patients Treated with an Opioid who are Given a Bowel Regimen/NQF 1617

These will be reported in late summer on a Hospice COMPARE website. The HIS Composite Measure and the Visits at the End of Life Measure have not yet been tested for reliability so they are not ready for public reporting as yet.

Hospices will receive preview reports that include their quality data as it would be published on the Hospice COMPARE website; it is expected that hospice providers will receive those reports on June 1, 2017, in the CASPER system. Hospices will have 30 days to review and appeal the data included in the reports. If, upon review, CMS determines that the data included in the reports is incorrect, the hospice’s data will be suppressed as part of the initial launch of Hospice COMPARE. However, CMS plans to update (or “refresh”) Hospice COMPARE data on a quarterly basis, and the revised data will be part of the subsequent COMPARE refresh.

CMS plans to begin public reporting of CAHPS Hospice Survey measures as part of the winter CY2018 refresh on Hospice COMPARE. CAHPS Hospice Survey scores will be displayed based on eight rolling quarters of data and will initially use data for patients who died while receiving hospice care between April 1, 2015, and March 31, 2017. CMS plans to update these scores quarterly and to display only scores for those hospices that have 30 or more completed questionnaires for the period. As with other CMS COMPARE sites, CMS anticipates development of a quality rating system that gives each hospice a rating of between 1 and 5 stars, but the timeline for development and implementation of the star rating system will be the subject of future rulemaking.

CMS continues to monitor use of the hospice benefit, which served nearly 1.4 million patients in FY2016, at a cost of approximately $16.5 billion. The Office of the Actuary projects that hospice outlays will continue to increase by approximately 7 percent annually. For FY2016, the most common hospice principal diagnoses were:

  • • Alzheimer’s disease
  • • Heart Failure
  • • COPD
  • • Lung Cancer
  • • Senile Degeneration of the Brain

Combined these account for approximately 30 percent of all claims-based principal diagnosis codes reported in FY2016.

Diagnoses on Claims. Hospices have made significant improvements in reporting of diagnoses on claims. In FY2014 only 49 percent of claims included a single diagnoses, while in FY2016, 100 percent of hospices reported more than one diagnosis on claims, with 86 percent reporting a least two diagnoses and 77 percent including at least three.

Length of Stay. The average length of stay during FY2016 was 79 days and the average lifetime length of stay in hospice was 96.1 days. The same data for FY2015 was comparable, with an average length of stay at 78 days and the average lifetime length of stay at 95.2 days. The median length of stay for FY2016 was 18 days. CMS also examined the average lifetime length of stay associated with hospice principal diagnoses by site of service and found that beneficiaries with chronic, progressive neurological diseases had the longest average lifetime lengths of stay (at 165.3 days in FY2015), whereas beneficiaries with chronic kidney disease and cancer had shorter average lifetime lengths of stay (57 and 63.7 days, respectively). The average lifetime length of stay when the level of care at admission was routine home care (RHC) was calculated at 113.5 days in FY2015, and 114 days in FY2016, while patients admitted to hospice at other levels of care have overall shorter lengths of stay, an indication of greater acuity overall.

Live Discharges. In FY2016, approximately 17 percent of hospice beneficiaries were discharged alive; beneficiary revocations were 38 percent of all live discharges and 51 percent of all live discharges were related to the beneficiary no longer being considered terminally ill, while 11 percent of all live discharges were related to transfers. Overall live discharge rates have dropped by 22.8 percent between FY2007 and FY2016. CMS notes that 26 percent of all live discharges occurred within 30 days of the start of care, 13 percent between 31 and 60 days, 14 percent between 61 and 90 days, 19 percent between 91 and 180 days, and 28 percent after 180 days of care. CMS indicates that this analysis does not indicate any anomalies at this time but it will continue to monitor live discharge rates.

Skilled Care in the Final Days of Life. CMS has had continuing concerns that some hospice patients are not receiving skilled care in the final days of life; to encourage provision of such services, CMS developed the service intensity add-on (SIA) and a new quality measure pair related to visits during the last seven days of life. CMS analysis of FY2016 claims data indicates that the provision of skilled visits in the last seven days of life and on the final day of life by hospice providers has incrementally improved when compared with FY2014 claims data. Total number of hours of skilled services in the final 7 days of life remains about the same when comparing FY2015 and FY2016 claims data (1.61 hours vs. 1.6 hours). CMS indicates that it does not believe that these results indicate any immediate concerns regarding behavioral changes by hospices in response to the SIA, but will continue to monitor the provision of services at the end of life.

Spending Outside of Hospice. Medicare spending outside of hospice while patients are on service continues to decrease for Parts A and B ($534 million in FY2016 as compared with $748 million in FY2012 – a 25 percent reduction). Because these are “non-trivial” amounts, CMS does intend to continue monitoring these areas. However, while existing prior authorization requirements related to utilization of drugs in four targeted categories (analgesics, anti-nauseants, anti-anxiety, and laxatives) has decreased, overall Part D spending for hospice patients has increased over FY2012 rates, raising serious concerns for CMS. CMS states that many of these prescriptions are for “maintenance” drugs (drugs used to treat high blood pressure, heart disease, asthma and diabetes, and which include beta blockers, calcium channel blockers, corticosteroids, and insulin). CMS indicates that these drugs may be appropriate for discontinuation once a patient has elected hospice or may offer symptom relief from the terminal illness and related conditions and should therefore be covered by the hospice.

CMS indicates that when conditions are identified by the hospice as “unrelated”, the hospice should inform the patient and provide the clinical rationale behind the determination; CMS also underscores that, “The regulations at 476.78 state that providers must inform Medicare beneficiaries at the time of admission, in writing, that the care for which Medicare payment is sought will be subject to Quality Improvement Organization (QIO) review. If a beneficiary disagrees with the hospice determination of what conditions are unrelated to the terminal illness and related conditions (and thus arguably not provided as part of the hospice benefit), we strongly encourage hospices to work to resolve the disagreement with the beneficiary (or representative0, taking into consideration his or her wishes, treatment preferences and goals. If a resolution cannot be reached, the beneficiary and the hospice can agree to participate in a flexible, dialogue-based resolution process…which is coordinated by the QIO.” CMS will continue to monitor non-hospice spending during a hospice election and consider ways to address the issue through regulatory and/or program integrity efforts.

Analysis of Revised Hospice Cost Report Data. Preliminary analysis of the new cost report data for freestanding hospices with cost reporting periods in FY2015 (2,675 reports) was conducted to calculate preliminary estimates of total cost per day by level of care. All payer sources were included. In this initial analysis, CMS found that the median and weighted mean costs for provision of RHC care to be $125 and $123, respectively, as compares with the FY2015 per diem rate of $159.34, or a difference of about $35 per day. For continuous home care (CHC), the estimated median and weighted mean costs per day, per hour, were $51 and $59, respectively, as compared with the FY2015 hourly rate o f$38.75 per hour. Similarly, the median and weighted mean costs per day associated with the provision of general inpatient care (GIP) were $879 and $792, respectively, as compared with the FY2015 GIP rate of $708.77. For respite care (IRC), the median and weighted mean costs per day were estimated at $343 and $467, respectively, as compared with the FY2015 rate of $164.81. While these are preliminary analyses and CMS acknowledges that hospices were getting used to the new cost report at the time, CMS indicates that it will conduct more thorough analyses in the future, and encourages hospices to submit the most accurate data possible on Medicare cost reports.

Theresa M. Forster
VP for Hospice Policy & Programs
National Association for Home Care & Hospice