CMS Guidelines from 2017 Hospice Wage Index Final Rule

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By Judi Lund Person, MPH, CHC 
VP, Regulatory and Compliance, National Hospice and Palliative Care Organization
CMS Guidelines from 2017 Hospice Wage Index Final Rule

Reading into a government-issued rule set might seem an odd activity, but the truth is, we can gain valuable knowledge about the Centers for Medicare & Medicaid Services’ (CMS) plans for our industry by looking at the 2017 Hospice Wage Index Proposed Rule, published in April, 2016, provides extensive data analysis on the Medicare Hospice Benefit.  The 2017 Hospice Wage Index Final Rule, published on August 5, 2016, provides the final regulations, based on the proposed rule and submitted comments.

One point of the wage index final rule is the annual market basket update, which rose to 2.1% on October 1, 2016. But each year, the final rule is also a way for CMS to communicate data analysis, changes in regulations and quality reporting, and give hints for plans into the future. That’s a lot more than just rates.

Concerns over hospices not fully documenting diagnoses

CMS is carefully tracking the percentage of hospice claims with one diagnosis, two diagnoses and three diagnoses. For example, the number with one diagnosis in 2010 was 77% (CMS, FY2013 Hospice Wage Index Final Notice, p. 44247), and that dropped to 37% in 2015 (CMS, FY2017 Hospice Wage Index Proposed Rule, 2016, p 25506). CMS is carefully tracking the number of claims with two diagnoses (63% in 2015) and three or more (46% in 2015) (CMS, 2016). Careful documentation of every diagnosis, whether related to the primary one or not, is CMS’s goal for hospice providers.

Possible future case-mix adjustment

CMS is tracking the amount of spending before hospice admission as a way to prove the value of hospice and potentially consider a case-mix adjustment option for hospice payment sometime in the future (CMS, 2016, p 25507).

Concerns over leakage

Although non-hospice Part A and Part B spending decreased by 15.4% between 2013 and 2014 (CMS, 2016, p 25508), it is still substantial, adding up to $600 million in 2014. In addition, CMS has said, “We remain concerned that common palliative and other disease-specific drugs for hospice beneficiaries are being covered and paid for through Part D” (CMS, 2016, p. 25511). There was significant spending on psychotherapeutic and neurological agents for cerebral degeneration patients ($11.5 million), as well as anti-asthmatic and bronchodilator agents for COPD patients ($8.7 million).

Concerns about live discharge rates

CMS has stated it believes some hospices are using the Medicare Hospice Program as a long-term care benefit rather than an end-of-life benefit for terminal beneficiaries (CMS, 2016, p 25514). CMS now has a way to separately track live discharges due to patient choice—revocation and live discharges due to hospice determination. Every hospice should look at the data to determine what your percentages are for both types of discharges and make this a focus area. As a benchmark, the national rate for live discharges is now approximately 18%. Knowing your percentage of revocations and reasons for hospice-initiated discharge is the first step toward reviewing this practice and making adjustments in the eligibility and admissions process, in addition to the processes in place for live discharges. 

Measuring care when death is imminent

CMS’s concerns over a lack of skilled visits during the last seven days of a hospice election have now led to the introduction of a new quality measure pair, to be introduced in April 2017. CMS found that on any given day during the last seven days of a hospice election, nearly 47% of the time the patient did not receive a skilled nursing or social worker visit (CMS, 2016, p 25514). It also found that on the day of death, nearly 26% of beneficiaries did not receive a skilled nursing or social work visit (CMS, 2016, p 25514). Here are the details of the measure pair:

Measure 1 assesses the percentage of patients receiving at least one visit during the last three days of life from:

  • A registered nurse
  • A physician
  • A nurse practitioner
  • A physician assistant (new to the list)

Measure 2 assesses the percentage of patients receiving at least two visits during the last seven days of life from:

  • A medical social worker
  • A chaplain or spiritual counselor (new to the list)
  • A licensed practical nurse
  • A hospice aide (CMS, 2016, p 25522)

Composite process measure

There is a new composite process measure to determine the percentage of patients for whom data was entered for all seven Hospice Item Set (HIS) measures. Hospices must begin reporting on April 1, 2017 (CMS, 2016, p 25522).  No new data collection is required for the measure—every hospice has the data available today to begin analysis. Analyzing information on every Medicare patient and her HIS submission is the first step, followed by looking for patterns among the patients where there is missing data for HIS measures—specific measures, specific teams or disciplines. Analysis now of your own data will give your hospice a head start and higher scores when this becomes a required measure in April 2017. Make this a performance improvement project or challenge staff to ensure that all seven measures are completed and that the information is submitted to HIS timely.

The times continue to be changing for hospice, with a standardized patient assessment tool now in development and Hospice Compare ready to launch next summer. Continue to follow all of these changes carefully, so that your hospice meets deadlines and has the best opportunities for success.

Learn More about CMS + Hospice Care

End Notes:
CMS, FY2013 Hospice Wage Index Final Notice, p. 44247
CMS, FY2017 Hospice Wage Index Proposed Rule, pgs. 25506-25522

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