CMS issues Final Rule for Hospice FY2022

On July 29, the Centers for Medicare and Medicaid Services (CMS) issued the FY2022 Final Rule for Hospice, updating Medicare payment rates and the aggregate cap amount for FY2022. These new regulations will take effect Oct. 1.

Here’s a quick overview from the SimiTree Healthcare Consulting team on what’s in the Final Rule:

1. Hospice providers will see a 2% pay increase for FY2022.
The pay increase is estimated to total $480 million, and is less than the 2.3 amount which was projected in the proposed rule. The discrepancy between the projected and final rule occurred because CMS used new dater data to determine the percentage of the increase according to SimiTree team members.

“To establish the 2.3 percent increase projected in the proposed rule, CMS used a fourth quarter 2020 estimate of the inpatient hospital market basket as well as historical data through the third quarter of 2020 ,” said SimiTree Director Erin Masterson. “The reduction from 2.3 percent to 2 percent is due to CMS using updated data that was made available after the release of the proposed rule.”

The market basket increase came to 2.7 percent where second quarter 2021 forecast data and historial data through the first quarter of 2021 of the inpatient hospital market basket was used. The productivity adjustment for CY 2022 is 0.7 percent, resulting in the overall 2 percent rate increase.

2. The hospice cap amount for FY2022 is also increasing by 2%.
The hospice cap, which limits the total payment a hospice may receive each year per patient, will be set at $31,297.61 for FY2022. The cap for FY2021 is $30,683.93.

3. The rule rebases and revises labor shares for hospice.
The rule sets out rebased and revised labor shares for all four levels of hospice care. FY2022 labor shares will be 75.2 percent for continuous home care (CHC), 66 percent for routine home care (RHC), 63.5 percent for general inpatient care (GIP) and 61 percent for inpatient respite care (IRC).

“CMS used 2018 Medicare Cost Report (MCR) data for the rebasing, and relied on data for freestanding hospice facilities,” Masterson said. “Facility-based hospice data was not used.”

4. Hospice providers will receive star ratings on Care Compare.
Star ratings will be publicly available on Care Compare, an interface on Medicare.gov designed to help patients and caregivers make informed decisions about healthcare based on cost, quality of care, volume of services and other data. Hospice stars for Care Compare will be calculated based on the results of the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey.

“For the general public, measure scores can be confusing and hard to understand,” said Judy Connelly, SimiTree Hospice Senior Manager. “But most people understand star ratings. This is part of an effort by CMS to simplify and make comparisons between hospices more straightforward for the public. The Hospice Star ratings will provide consistency in the CMS methodolgy of reporting patient/family experience with care received.”

5. There are changes to Hospice Quality Reporting.
The rule adds two new claims-based measures in the Hospice Quality Reporting Program which will be publicly be reported as early as May 2022. These measures will be claims-based indicators and would not require additional data collection requirements from hospices.

One new measure is the Hospice Care Index. This new composite measure includes 10 indicators of quality that are calculated from claims data. The indicators represent different aspects of hospice care and provide a comprehensive characterization of the quality of care furnished by a hospice.

The indicators will focus on aspects of care such as the timing and length of visits, early and late discharges, burdensome transitions, pre-beneficiary spending and other factors.

“The composite measure will be another way to capture the full story of the quality of care furnished by a hospice throughout the stay,” said Maureen Kelleher, Hospice Senior Manager at SimiTree.

The other new measure to be reported is a Hospice Visits in the Last Days of Life measure. This measure analyzes claims-based data to identify the proportion of hospice patients who received visits from a Registered Nurse or Medical Social Worker in at least two of the last three days of life. Other disciplines of the IDG can be attentive to patient needs during the last days of life as determined by the Plan of Care, but will not be included in the measure. The Hospice Care Index and Hospice Visits in the Last Days of Life will be publicly reported no earlier than May 2022.

In addition, the final rule officially lifts a freeze in effect on public reporting of hospice quality reporting program data since October 2020 – but it is excludes some data from 2020 from the reporting process.
“When hospice providers resume public reporting of quality measures in January 2022, data from the first six months of 2020 won’t be required,” said Laurie Newlun, SimiTree’s Hospice Compliance Team Senior Manager.

Newlun said it will be important for hospice providers to educate staff and the public about these new measures, and to facilitate understanding of top box scoring in order to prepare for the resumption of public reporting and the impact of the measures on both public and referral source perception of care and services provided by the hospice.

6. The rule removes seven HIS measures.
CMS believes seven Hospice Item Set (HIS) measures are no longer needed because a more broadly applicable measure, the Hospice Comprehensive Assessment Measure, is available and is publicly reported. The rule proposes to remove the seven individual HIS measures, but it does not propose any changes to the requirement to submit the HIS admission assessment, and information provided through HIS data collection will likely be included in the Hospice Outcome and Patient Evaluation (HOPE) assessment instrument when finalized. The rule includes an update on HOPE, which has been in development for several years, and has sometimes been called the hospice equivalent to the OASIS instrument used by home health. CMS has established a dedicated email account to the HOPE assessment at HospiceAssessment@cms.hhs.gov to receive ongoing questions and comments.

7. The rule finalizes regulatory text changes for Hospice Election Addendum.
CMS is taking action to finalize regulatory text for the Hospice Election Statement addendum requirements which were approved in the FY2020 Final Rule and has made some changes based on stakeholders and hospice prvoiders’ expriences with using the election statement addendum. The effective date of the update Hospic Election Statement Addendum is Oct. 1, 2021. Areas clarified include, but are not limited to:

Timing of notices
Mailing the addendum
Date clarification
Non-hospice provider addendum requests
Plan to update a model election statement

8. 1135 Waivers made permanent
This final rule makes changes to the Hospice Conditions of Participation (CoPs) regarding hospice aide competency evaluation standards at §418.76 that were implemented under federal 1135 waivers during the COVID-19 public health emergency, including:

The use of a pseudo-patient for hospice aide competency training.
Requiring hospices to conduct a competency evaluation related to the deficient and related skill(s) noted during a hospice aide supervisory visit. This change will allow the hospice to focus on the hospice aides’ specific deficient and related skill(s) instead of assessing multiple areas within the competency evaluation.