DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 418

CMS-1355-P

RIN 0938-AQ31

Medicare Program; Hospice Wage Index for Fiscal Year 2012

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule would set forth the hospice wage index for fiscal year 

2012 and continue the phase-out of the wage index budget neutrality adjustment factor 

(BNAF), with an additional 15 percent BNAF reduction, for a total BNAF reduction in 

FY 2012 of 40 percent. The BNAF phase-out will continue with successive 15 percent 

reductions from FY 2013 through FY 2016. This proposed rule would change the 

hospice aggregate cap calculation methodology. This proposed rule also would revise the 

hospice requirement for a face-to-face encounter for recertification of a patient‘s terminal 

illness. Finally, this proposed rule would begin implementation of a hospice quality 

reporting program.

DATES: 

Comment Date: To be assured consideration, comments must be received at one of the 

addresses provided below, no later than 5 p.m. eastern time on [OFR--insert date 60

days after date of display in the Federal Register.]
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ADDRESSES: In commenting, please refer to file code CMS-1355-P. Because of staff 

and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (please choose only one of the 

ways listed):

1. Electronically. You may submit electronic comments on this regulation to 

http://www.regulations.gov. Follow the instructions under the "More Search Options" 

tab.

2. By regular mail. You may mail written comments to the following address 

ONLY:

Centers for Medicare & Medicaid Services,

Department of Health and Human Services,

Attention: CMS-1355-P,

P.O. Box 8012,

Baltimore, MD 21244-1850.

Please allow sufficient time for mailed comments to be received before the close of the 

comment period.

3. By express or overnight mail. You may send written comments to the following 

address ONLY:

Centers for Medicare & Medicaid Services,

Department of Health and Human Services,

Attention: CMS-1355-P,

Mail Stop C4-26-05,

7500 Security Boulevard,
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Baltimore, MD 21244-1850.

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your 

written comments before the close of the comment period to either of the following 

addresses: 

a. For delivery in Washington, DC--

Centers for Medicare & Medicaid Services,

Department of Health and Human Services,

Room 445-G, Hubert H. Humphrey Building,

200 Independence Avenue, SW.,

Washington, DC 20201

(Because access to the interior of the Hubert H. Humphrey Building is not readily 

available to persons without Federal government identification, commenters are 

encouraged to leave their comments in the CMS drop slots located in the main lobby of 

the building. A stamp-in clock is available for persons wishing to retain a proof of filing 

by stamping in and retaining an extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD--

Centers for Medicare & Medicaid Services,

Department of Health and Human Services,

7500 Security Boulevard,

Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, please call telephone 

number (410) 786 9994 in advance to schedule your arrival with one of our staff 

members.
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Comments mailed to the addresses indicated as appropriate for hand or courier 

delivery may be delayed and received after the comment period.

For information on viewing public comments, see the beginning of the 

"SUPPLEMENTARY INFORMATION" section.

FOR FURTHER INFORMATION CONTACT: For information regarding ―Quality 

Reporting for Hospices‖ and ―Collection of Information Requirements‖ sections, please 

contact Robin Dowell at (410) 786-0060. For information regarding ―Hospice Wage 

Index‖ and ―Hospice Face-to-Face Requirement‖ sections, please contact Anjana Patel at 

(410) 786-2120. For information regarding all other sections, please contact Katie Lucas 

at (410) 786-7723.

SUPPLEMENTARY INFORMATION:

Submitting Comments: We welcome comments from the public on all issues set forth in 

this rule to assist us in fully considering issues and developing policies. You can assist us 

by referencing the file code CMS-1355-P and the specific "issue identifier" that precedes 

the section on which you choose to comment.

Inspection of Public Comments: All comments received before the close of the comment 

period are available for viewing by the public, including any personally identifiable or 

confidential business information that is included in a comment. We post all comments 

received before the close of the comment period on the following Web site as soon as 

possible after they have been received: http://www.regulations.gov. Follow the search 

instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection as they are 

received, generally beginning approximately 3 weeks after publication of a document, at 
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the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security 

Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an appointment to view public comments, phone 

1-800-743-3951.

Table of Contents 

I. Background

A. General

1. Hospice Care

2. Medicare Payment for Hospice Care

B. Hospice Wage Index

1. Raw Wage Index Values (Pre-floor, Pre-reclassified, Hospital Wage Index)

2. Changes to Core-Based Statistical Area (CBSA) Designations

3. Definition of Rural and Urban Areas

4. Areas without Hospital Wage Data

5. CBSA Nomenclature Changes

6. Wage Data for Multi-campus Hospitals

7. Hospice Payment Rates

II. Summary of Cap Comments Solicited in the FY 2011 Hospice Wage Index Notice 

with Comment Period

III. Provisions of the Proposed Rule

A. FY 2012 Hospice Wage Index 

1. Background

2. Areas without Hospital Wage Data 
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3. FY 2012 Wage Index with an Additional 15 Percent Reduced Budget Neutrality 

Adjustment Factor (BNAF)

4. Effects of Phasing out the BNAF

B. Aggregate Cap Calculation Methodology

1. Cap Determinations for Cap Years Ending on or Before October 31, 2011

2. Cap Determinations for Cap Years Ending on or After October 31, 2012

3. Patient-by-Patient Proportional Methodology

4. Streamlined Methodology

5. Changing Methodologies

6. Other Issues

7. Changes to Regulatory Text

C. Hospice Face-to-Face Requirement

D. Technical Proposals and Clarification

1. Hospice Local Coverage Determinations

2. Definition of Hospice Employee

3. Timeframe for Face-to-Face Encounters

4. Hospice Aide and Homemaker Services

E. Quality Reporting for Hospices

1. Background and Statutory Authority

2. Quality Measures for Hospice Quality Reporting Program for Payment Year FY 2014

a. Considerations in the Selection of the Proposed Quality Measures

b. Proposed Quality Measures for the Quality Reporting Program for Hospices
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c. Proposed Timeline for Data Collection under the Quality Reporting Program for 

Hospices

d. Data Submission Requirements

3. Public Availability of Data Submitted

4. Additional Measures Under Consideration 

IV. Updates on Issues Not Proposed for Rulemaking for FY 2012 Rulemaking

A. Update on Hospice Payment Reform and Value Based Purchasing

B. Update on the Redesigned Provider Statistical & Reimbursement Report 

 (PS&R) 

V. Collection of Information Requirements

A. Structural Measure: Participation in Quality Assessment Performance Improvement 

Program that Includes at Least Three Indicators Related to Patient Care

B. NQF Measure #0209: Percentage of patients who were uncomfortable because of 

pain on admission to hospice whose pain was brought under control within 48 hours

VI. Response to Comments

VII. Economic Analyses

A. Regulatory impact Analysis

1. Introduction

2. Statement of Need

3. Overall Impact

4. Detailed Economic Analysis

a. Effects on Hospices

b. Hospice Size
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c. Geographic Location

d. Type of Ownership

e. Hospice Base

f. Effects on Other Providers

g. Effects on the Medicare and Medicaid Programs

h. Accounting Statement

i. Conclusion

B. Regulatory Flexibility Act Analysis

C. Unfunded Mandates Reform Act Analysis

VIII. Federalism Analysis

Addendum A: FY 2012 Wage Index for Urban Areas 

Addendum B: FY 2012 Wage Index for Rural Areas 

I. Background

A. General

1. Hospice Care

Hospice care is an approach to treatment that recognizes that the impending death 

of an individual warrants a change in the focus from curative to palliative care, for relief 

of pain and for symptom management. The goal of hospice care is to help terminally ill 

individuals continue life with minimal disruption to normal activities while remaining 

primarily in the home environment. A hospice uses an interdisciplinary approach to 

deliver medical, nursing, social, psychological, emotional, and spiritual services through 

use of a broad spectrum of professional and other caregivers, with the goal of making the 

individual as physically and emotionally comfortable as possible. Counseling services 
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and inpatient respite services are available to the family of the hospice patient. Hospice 

programs consider both the patient and the family as a unit of care.

Section 1861(dd) of the Social Security Act (the Act) provides for coverage of 

hospice care for terminally ill Medicare beneficiaries who elect to receive care from a 

participating hospice. Section 1814(i) of the Act provides payment for Medicare 

participating hospices.

2. Medicare Payment for Hospice Care

Our regulations at 42 CFR part 418 establish eligibility requirements, payment 

standards and procedures, define covered services, and delineate the conditions a hospice 

must meet to be approved for participation in the Medicare program. Part 418 subpart G 

provides for payment in one of four prospectively-determined rate categories (routine 

home care, continuous home care, inpatient respite care, and general inpatient care) to 

hospices based on each day a qualified Medicare beneficiary is under a hospice election.

B. Hospice Wage Index

The hospice wage index is used to adjust payment rates for hospice agencies 

under the Medicare program to reflect local differences in area wage levels. Our 

regulations at §418.306(c) require each hospice‘s labor market to be established using the 

most current hospital wage data available, including any changes by the Office of 

Management and Budget (OMB) to the Metropolitan Statistical Areas (MSAs) 

definitions. OMB revised the MSA definitions beginning in 2003 with new designations 

called the Core Based Statistical Areas (CBSAs). For the purposes of the hospice benefit, 

the term ―MSA-based‖ refers to wage index values and designations based on the 

previous MSA designations before 2003. Conversely, the term ―CBSA-based‖ refers to 
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wage index values and designations based on the OMB revised MSA designations in 

2003, which now include CBSAs. In the August 11, 2004 Inpatient Prospective Payment 

System (IPPS) final rule (69 FR 48916, 49026), revised labor market area definitions 

were adopted at §412.64(b), which were effective October 1, 2004 for acute care 

hospitals. We also revised the labor market areas for hospices using the new OMB 

standards that included CBSAs. In the FY 2006 hospice wage index final rule (70 FR 

45130), we implemented a 1-year transition policy using a 50/50 blend of the CBSAbased wage index values and the Metropolitan Statistical Area (MSA)-based wage index 

values for FY 2006. The one-year transition policy ended on September 30, 2006. For 

fiscal years 2007 and beyond, we use CBSAs. 

The original hospice wage index was based on the 1981 Bureau of Labor 

Statistics hospital data and had not been updated since 1983. In 1994, because of 

disparity in wages from one geographical location to another, a committee was 

formulated to negotiate a wage index methodology that could be accepted by the industry 

and the government. This committee, functioning under a process established by the 

Negotiated Rulemaking Act of 1990, comprised representatives from national hospice 

associations; rural, urban, large and small hospices and multi-site hospices; consumer 

groups; and a government representative. On April 13, 1995, the Hospice Wage Index 

Negotiated Rulemaking Committee (the Committee) signed an agreement for the 

methodology to be used for updating the hospice wage index.

In the August 8, 1997 Federal Register (62 FR 42860), we published a final rule 

implementing a new methodology for calculating the hospice wage index based on the 

recommendations of the negotiated rulemaking committee. The Committee‘s statement 
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was included in the appendix of that final rule (62 FR 42883). 

The reduction in overall Medicare payments if a new wage index were adopted 

was noted in the November 29, 1995 notice transmitting the recommendations of the 

Committee (60 FR 61264). Therefore, the Committee also decided that for each year in 

updating the hospice wage index, aggregate Medicare payments to hospices would 

remain budget neutral to payments as if the 1983 wage index had been used.

As suggested by the Committee, ―budget neutrality‖ would mean that, in a given 

year, estimated aggregate payments for Medicare hospice services using the updated 

hospice values would equal estimated payments that would have been made for these 

services if the 1983 hospice wage index values had remained in effect. Although 

payments to individual hospice programs would change each year, the total payments 

each year to hospices would not be affected by using the updated hospice wage index 

because total payments would be budget neutral as if the 1983 wage index had been used. 

To implement this policy, a Budget Neutrality Adjustment Factor (BNAF) would be 

computed and applied annually to the pre-floor, pre-reclassified hospital wage index 

when deriving the hospice wage index.

The BNAF is calculated by computing estimated payments using the most recent,

completed year of hospice claims data. The units (days or hours) from those claims are 

multiplied by the updated hospice payment rates to calculate estimated payments. For the 

FY 2011 Hospice Wage Index Notice with Comment Period, that meant estimating 

payments for FY 2011 using FY 2009 hospice claims data, and applying the FY 2011

hospice payment rates (updating the FY 2010 rates by the FY 2011 inpatient hospital 

market basket update). The FY 2011 hospice wage index values are then applied to the 
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labor portion of the payment rates only. The procedure is repeated using the same claims 

data and payment rates, but using the 1983 BLS-based wage index instead of the updated 

raw pre-floor, pre-reclassified hospital wage index (note that both wage indices include 

their respective floor adjustments). The total payments are then compared, and the 

adjustment required to make total payments equal is computed; that adjustment factor is 

the BNAF. 

The FY 2010 Hospice Wage Index Final Rule (74 FR 39384) finalized a 

provision for a 7-year phase-out of the BNAF, which is applied to the wage index values. 

The BNAF was reduced by 10 percent in FY 2010, an additional 15 percent in FY 2011,

and will be reduced by an additional 15 percent in each of the next 5 years, for complete 

phase out in 2016. 

The hospice wage index is updated annually. Our most recent annual hospice 

wage index Notice with Comment Period, published in the Federal Register (75 FR 

42944) on July 22, 2010, set forth updates to the hospice wage index for FY 2011. As 

noted previously, that update included the second year of a 7-year phase-out of the 

BNAF, which was applied to the wage index values. The BNAF was reduced by 10 

percent in FY 2010 and by additional 15 percent in 2011, for a total FY 2011 reduction of 

25 percent. 

1. Raw Wage Index Values (Pre-floor, Pre-reclassified Hospital Wage Index)

As described in the August 8, 1997 hospice wage index final rule (62 FR 42860), 

the pre-floor and pre-reclassified hospital wage index is used as the raw wage index for 

the hospice benefit. These raw wage index values are then subject to either a budget 
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neutrality adjustment or application of the hospice floor to compute the hospice wage 

index used to determine payments to hospices. 

Pre-floor, pre-reclassified hospital wage index values of 0.8 or greater are 

currently adjusted by a reduced BNAF. As noted above, for FY 2011, the BNAF was 

reduced by a cumulative total of 25 percent. Pre-floor, pre-reclassified hospital wage 

index values below 0.8 are adjusted by the greater of: (1) the hospice BNAF, reduced by 

a total of 25 percent for FY 2011; or (2) the hospice floor (which is a 15 percent increase) 

subject to a maximum wage index value of 0.8. For example, if in FY 2011, County A 

had a pre-floor, pre-reclassified hospital wage index (raw wage index) value of 0.3994, 

we would perform the following calculations using the budget neutrality factor (which for 

this example is an unreduced BNAF of 0.060562, less 25 percent, or 0.045422) and the 

hospice floor to determine County A's hospice wage index:

Pre-floor, pre-reclassified hospital wage index value below 0.8 multiplied by the 

25 percent reduced BNAF: (0.3994 x 1.045422 = 0.4175)

Pre-floor, pre-reclassified hospital wage index value below 0.8 multiplied by the 

hospice floor: (0.3994 x 1.15 = 0.4593)

Based on these calculations, County A's hospice wage index would be 0.4593.

The BNAF has been computed and applied annually, in full or in reduced form, to 

the labor portion of the hospice payment. Currently, the labor portion of the payment 

rates is as follows: for Routine Home Care, 68.71 percent; for Continuous Home Care, 

68.71 percent; for General Inpatient Care, 64.01 percent; and for Respite Care, 54.13 

percent. The non-labor portion is equal to 100 percent minus the labor portion for each 

level of care. Therefore the non-labor portion of the payment rates is as follows: for 
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Routine Home Care, 31.29 percent; for Continuous Home Care, 31.29 percent; for 

General Inpatient Care, 35.99 percent; and for Respite Care, 45.87 percent. 

2. Changes to Core Based Statistical Area (CBSA) Designations

The annual update to the hospice wage index is published in the Federal Register

and is based on the most current available hospital wage data, as well as any changes by 

the OMB to the definitions of MSAs, which now include CBSA designations. The 

August 4, 2005 final rule (70 FR 45130) set forth the adoption of the changes discussed 

in the OMB Bulletin No. 03-04 (June 6, 2003), which announced revised definitions for 

Micropolitan Statistical Areas and the creation of MSAs and Combined Statistical Areas. 

In adopting the OMB CBSA geographic designations, we provided for a 1-year transition 

with a blended hospice wage index for all hospices for FY 2006. For FY 2006, the 

hospice wage index consisted of a blend of 50 percent of the FY 2006 MSA-based 

hospice wage index and 50 percent of the FY 2006 CBSA based hospice wage index. 

Subsequent fiscal years have used the full CBSA-based hospice wage index. 

3. Definition of Rural and Urban Areas 

Each hospice‘s labor market is determined based on definitions of MSAs issued 

by OMB. In general, an urban area is defined as an MSA or New England County 

Metropolitan Area (NECMA), as defined by OMB. Under §412.64(b)(1)(ii)(C), a rural 

area is defined as any area outside of the urban area. The urban and rural area geographic 

classifications are defined in §412.64(b)(1)(ii)(A) through (C), and have been used for the 

Medicare hospice benefit since implementation.

When the raw pre-floor, pre-reclassified hospital wage index was adopted for use 

in deriving the hospice wage index, it was decided not to take into account IPPS 
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geographic reclassifications. This policy of following OMB designations of rural or 

urban, rather than considering some Counties to be ―deemed‖ urban, is consistent with 

our policy of not taking into account IPPS geographic reclassifications in determining 

payments under the hospice wage index. 

4. Areas Without Hospital Wage Data

When adopting OMB‘s new labor market designations in FY 2006, we identified 

some geographic areas where there were no hospitals, and thus, no hospital wage index 

data on which to base the calculation of the hospice wage index. Beginning in FY 2006, 

we adopted a policy to use the FY 2005 pre-floor, pre-reclassified hospital wage index 

value for rural areas when no hospital wage data were available. We also adopted the 

policy that for urban labor markets without a hospital from which a hospital wage index 

data could be derived, all of the CBSAs within the State would be used to calculate a 

statewide urban average pre-floor, pre-reclassified hospital wage index value to use as a 

reasonable proxy for these areas. Consequently, in subsequent fiscal years, we applied 

the average pre-floor, pre-reclassified hospital wage index data from all urban areas in 

that state, to urban areas without a hospital. This year the only such CBSA is 25980, 

Hinesville-Fort Stewart, Georgia. 

Under the CBSA labor market areas, there are no hospitals in rural locations in 

Massachusetts and Puerto Rico. Since there was no rural proxy for more recent rural data 

within those areas, in the FY 2006 hospice wage index proposed rule (70 FR 22394,

22398), we proposed applying the FY 2005 pre-floor, pre-reclassified hospital wage 

index value to rural areas where no hospital wage data were available. In the FY 2006 

final rule and in the FY 2007 update notice, we applied the FY 2005 pre-floor, pre-
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reclassified hospital wage index data for areas lacking hospital wage data in both FY 

2006 and FY 2007 for rural Massachusetts and rural Puerto Rico. 

In the FY 2008 final rule (72 FR 50214, 50217) we considered alternatives to our 

methodology to update the pre-floor, pre-reclassified hospital wage index for rural areas 

without hospital wage data. We indicated that we believed that the best imputed proxy 

for rural areas, would: 1) use pre-floor, pre-reclassified hospital data; 2) use the most 

local data available to impute a rural pre-floor, pre-reclassified hospital wage index; 3) be 

easy to evaluate; and, 4) be easy to update from year-to-year. 

Therefore, in FY 2008 through FY 2011, in cases where there was a rural area 

without rural hospital wage data, we used the average pre-floor, pre-reclassified hospital 

wage index data from all contiguous CBSAs to represent a reasonable proxy for the rural 

area. This approach does not use rural data; however, the approach, which uses pre-floor, 

pre-reclassified hospital wage data, is easy to evaluate, is easy to update from year-toyear, and uses the most local data available. In the FY 2008 rule (72 FR at 50217), we 

noted that in determining an imputed rural pre-floor, pre-reclassified hospital wage index, 

we interpret the term ―contiguous‖ to mean sharing a border. For example, in the case of 

Massachusetts, the entire rural area consists of Dukes and Nantucket counties. We 

determined that the borders of Dukes and Nantucket counties are contiguous with 

Barnstable and Bristol counties. Under the adopted methodology, the pre-floor, prereclassified hospital wage index values for the counties of Barnstable (CBSA 12700, 

Barnstable Town, MA) and Bristol (CBSA 39300, Providence-New Bedford-Fall River, 

RI-MA) would be averaged resulting in an imputed pre-floor, pre-reclassified rural 

hospital wage index for FY 2008. We noted in the FY 2008 final hospice wage index 
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rule that while we believe that this policy could be readily applied to other rural areas that 

lack hospital wage data (possibly due to hospitals converting to a different provider type, 

such as a Critical Access Hospital, that does not submit the appropriate wage data), if a 

similar situation arose in the future, we would re-examine this policy. 

We also noted that we do not believe that this policy would be appropriate for 

Puerto Rico, as there are sufficient economic differences between hospitals in the United 

States and those in Puerto Rico, including the payment of hospitals in Puerto Rico using 

blended Federal/Commonwealth-specific rates. Therefore, we believe that a separate and 

distinct policy is necessary for Puerto Rico. Any alternative methodology for imputing a 

pre-floor, pre-reclassified hospital wage index for rural Puerto Rico would need to take 

into account the economic differences between hospitals in the United States and those in 

Puerto Rico. Our policy of imputing a rural pre-floor, pre-reclassified hospital wage 

index based on the pre-floor, pre-reclassified hospital wage index (or indices) of CBSAs 

contiguous to the rural area in question does not recognize the unique circumstances of 

Puerto Rico. While we have not yet identified an alternative methodology for imputing a 

pre-floor, pre-reclassified hospital wage index for rural Puerto Rico, we will continue to 

evaluate the feasibility of using existing hospital wage data and, possibly, wage data from 

other sources. For FY 2008 through FY 2011, we have used the most recent pre-floor, 

pre-reclassified hospital wage index available for Puerto Rico, which is 0.4047.

5. CBSA Nomenclature Changes 

The OMB regularly publishes a bulletin that updates the titles of certain CBSAs. 

In the FY 2008 Final Rule (72 FR 50218), we noted that the FY 2008 rule and all 

subsequent hospice wage index rules and notices would incorporate CBSA changes from 
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the most recent OMB bulletins. The OMB bulletins may be accessed at 

http://www.whitehouse.gov/omb/bulletins/index.html. 

6. Wage Data from Multi-campus Hospitals

Historically, under the Medicare hospice benefit, we have established hospice 

wage index values calculated from the raw pre-floor, pre-reclassified hospital wage data 

(also called the IPPS wage index) without taking into account geographic reclassification 

under sections 1886(d)(8) and (d)(10) of the Act. The wage adjustment established under 

the Medicare hospice benefit is based on the location where services are furnished 

without any reclassification. 

For FY 2010, the data collected from cost reports submitted by hospitals for cost 

reporting periods beginning during FY 2005 were used to compute the 2009 raw prefloor, pre-reclassified hospital wage index data, without taking into account geographic 

reclassification under sections 1886(d)(8) and (d)(10) of the Act. This 2009 raw prefloor, pre-reclassified hospital wage index was used to derive the applicable wage index 

values for the hospice wage index because these data (FY 2005) were the most recent 

complete cost data. 

Beginning in FY 2008, the IPPS apportioned the wage data for multi-campus 

hospitals located in different labor market areas (CBSAs) to each CBSA where the 

campuses were located (see the FY 2008 IPPS final rule with comment period (72 FR 

47317 through 47320)). We are continuing to use the raw pre-floor, pre-reclassified 

hospital wage data as a basis to determine the hospice wage index values because 

hospitals and hospices both compete in the same labor markets, and therefore, experience 

similar wage-related costs. We note that the use of raw pre-floor, pre-reclassified 
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hospital (IPPS) wage data used to derive the FY 2012 hospice wage index values, reflects 

the application of our policy to use those data to establish the hospice wage index. The 

FY 2012 hospice wage index values presented in this proposed rule were computed 

consistent with our raw pre-floor, pre-reclassified hospital (IPPS) wage index policy (that 

is, our historical policy of not taking into account IPPS geographic reclassifications in 

determining payments for hospice). As implemented in the August 8, 2008 FY 2009 

Hospice Wage Index final rule, for the FY 2009 Medicare hospice benefit, the hospice 

wage index was computed from IPPS wage data (submitted by hospitals for cost 

reporting periods beginning in FY 2004 (as was the FY 2008 IPPS wage index)), which 

allocated salaries and hours to the campuses of two multi-campus hospitals with 

campuses that are located in different labor areas, one in Massachusetts and another in 

Illinois. Thus, in FY 2009 and subsequent fiscal years, hospice wage index values for the 

following CBSAs have been affected by this policy: Boston-Quincy, MA (CBSA 14484), 

Providence-New Bedford-Falls River, RI–MA (CBSA 39300), Chicago-NapervilleJoliet, IL (CBSA 16974), and Lake County-Kenosha County, IL–WI (CBSA 29404).

7. Hospice Payment Rates

Section 4441(a) of the Balanced Budget Act of 1997 (BBA) amended section 

1814(i)(1)(C)(ii) of the Act to establish updates to hospice rates for FYs 1998 through 

2002. Hospice rates were to be updated by a factor equal to the market basket index, 

minus 1 percentage point. Payment rates for FYs since 2002 have been updated 

according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update to the 

payment rates for subsequent fiscal years will be the market basket percentage for the 
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fiscal year. It has been longstanding practice to use the inpatient hospital market basket 

as a proxy for a hospice market basket. 

Historically, the rate update has been published through a separate administrative 

instruction issued annually in the summer to provide adequate time to implement system 

change requirements. Hospices determine their payments by applying the hospice wage 

index in this proposed rule to the labor portion of the published hospice rates. Section 

3401(g) of the Affordable Care Act of 2010 requires that, in FY 2013 (and in subsequent 

fiscal years), the market basket percentage update under the hospice payment system as 

described in Section 1814(i)(1)(C)(ii)(VII) or Section 1814(i)(1)(C)(iii) be annually 

reduced by changes in economy-wide productivity as set out at section 

1886(b)(3)(B)(xi)(II) of the Act. Additionally, Section 3401(g) of the Affordable Care 

Act requires that in FY 2013 through FY 2019, the market basket percentage update

under the hospice payment system be reduced by an additional 0.3 percentage point

(although the potential reduction is subject to suspension under conditions set out under 

new section 1814(i)(1)(C)(v) of the Act). Congress also required, in section 3004(c) of 

the Affordable Care Act, that hospices begin submitting quality data, based on measures 

to be specified by the Secretary, for FY 2014 and subsequent fiscal years. Beginning in 

FY 2014, hospices which fail to report quality data will have their market basket update 

reduced by 2 percentage points. 

II. Summary of Cap Comments Solicited in the FY 2011 Hospice Wage Index 

Notice with Comment Period

Section 1814(i)(2)(A) through (C) of the Act establishes a cap on aggregate 

payments made to a Medicare hospice provider and prescribes a basic methodology for 
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calculating the aggregate cap. The aggregate cap limits the total aggregate payment any 

individual hospice can receive in a year. A hospice‘s ―aggregate cap‖ is calculated by 

multiplying the number of beneficiaries who have elected hospice care during an

accounting year by a per-beneficiary ―cap amount.‖ The Act established the perbeneficiary cap amount and provides an annual increase to the cap amount based on the 

rate of increase in the medical care expenditures category of the Consumer Price Index. 

The 2010 per-beneficiary cap amount was $23,874.98. 

A hospice‘s aggregate cap is compared with the total Medicare payments made to 

the hospice during the same accounting year. Any Medicare payments in excess of the 

aggregate cap are considered overpayments and must be returned to Medicare by the 

hospice. 

CMS‘ contractors calculate each hospice‘s aggregate cap every year, and establish 

an overpayment for any hospice that exceeds the aggregate cap. For the aggregate cap 

calculation, regulations at 42 CFR 418.309 define the total number of beneficiaries as the 

number of individuals who have elected hospice and have not previously been included 

in any cap calculation, reduced to reflect the proportion of hospice care that was provided 

in another hospice. These regulations also define the accounting year, or cap year, as the 

period from November 1st to October 31st.

In the FY 2011 Hospice Wage Index Notice with Comment Period, we noted that 

there have been some technological advances in our data systems which we believe might 

enable us to modernize the aggregate cap calculation process while providing information 

facilitating the ability of hospices to better manage their aggregate cap. We provided 

details regarding policy options that we are considering for modernizing the aggregate 
22

cap calculation methodology and solicited comments on those policy options; we also 

solicited comments or suggestions for other possible options/alternatives to modernize 

the cap calculation methodology, to be considered in possible future rulemaking. 

In that Notice, we described a policy option that would align the cap year with the 

federal fiscal year and policy options we were considering regarding how to count 

beneficiaries when computing the aggregate cap. We also described our plans to redesign 

the Provider Statistical and Reimbursement Report (PS&R) to show a beneficiary‘s full 

utilization history, and discussed having a uniform schedule for mailing cap 

determination letters.

The policy options we described regarding how to count beneficiaries when 

computing the aggregate cap were: 

Option 1: In this option, we described several approaches where we would apply a

patient-by-patient proportional methodology to all hospices‘ aggregate cap calculations. 

Under the patient-by-patient proportional methodology, the number of patients for a 

given cap year and hospice would be the patient-by-patient proportional share of each 

patient‘s days in that hospice during the cap year, when considering the patient‘s total 

days of Medicare hospice care in multiple cap years and multiple hospices. One 

approach we described would apportion each patient across the year of election and one 

additional year, as our analysis showed that 99.98 percent of patients who died in hospice 

were admitted to hospice either in the year that they died, or in the previous year. We

also described an approach where a hospice could request the Medicare contractor 

recalculate the hospice‘s aggregate cap using longer timeframes. 
23

Option 2: In this option, we described an approach which would defer across-theboard changes to the aggregate cap calculation methodology for all hospices until we 

implement hospice payment reform, but it would allow individual hospices to request the 

Medicare contractor to apply a patient-by-patient proportional methodology to its 

aggregate cap calculations. 

For more information on future hospice payment reform, please see section IV.A 

of this proposed rule. For details on these options or issues, please see the July 22, 2010 

Hospice Wage Index for Fiscal Year 2011 Notice with Comment Period (75 FR 42944). 

We received 27 public comments about the aggregate cap, with commenters expressing 

differing views on issues surrounding the aggregate cap. We also received several 

comments which were outside the scope of the solicitation.

Comment: We received public comments from 27 individuals or groups, with 1 

missing an attachment, for a total of 26 comments. 

Two commenters supported Option 1, with apportioning of hospice beneficiaries

across 2 years; one noted that this option covers more than two 180-day periods, while 

providing a fixed end date. The other commenter urged us to move forward with Option 

1 while additional data collection and payment reforms are pending. 

More commenters suggested we choose Option 2 than any other approach. Ten 

commenters supported Option 2, and suggested that we defer major changes to the 

aggregate cap methodology until payment reform occurs, unless a hospice requests multiyear apportioning. These commenters were concerned about the burden associated with 

changing the aggregate cap methodology now, and preferred that we wait until broader 

payment reform to make a change. They noted that the majority of hospices don‘t exceed 
24

their aggregate cap, and therefore don‘t want to change. One commenter urged CMS to 

retain the existing methodology, as creating a complicated, open-ended apportioning 

approach would disadvantage most hospices. This commenter stated that very few 

hospices have an aggregate cap liability, and asked that we not create an administrative 

burden for the vast majority of hospices that do not exceed the aggregate cap, but instead 

direct our aggregate cap changes to the minority of hospices that have some kind of 

liability. 

Some felt that Option 2 was simpler and would provide flexibility for those who 

wanted their aggregate cap calculated using a multi-year apportionment methodology. 

The major hospice associations urged CMS to defer any major across-the-board changes 

to the cap calculation methodology until the implementation of hospice payment reform, 

because of concerns that any changes to the current methodology would result in 

additional cost and burden to hospices. One association also suggested we fully examine 

the cap and whether other alternatives would better address patient needs, suggesting that 

we address alternatives in the context of broader payment reform. 

While these 10 commenters supported allowing individual hospice programs the 

option of requesting a recalculation of their cap determination using a multi-year 

apportionment methodology, some were concerned that this could have implications for 

hospices that had not requested a recalculation. A commenter suggested that should 

CMS re-open cap determinations for hospices that had not requested a recalculation, we 

could potentially harm hospices and ultimately risk access for patients who had been 

served by more than one hospice. This commenter added that CMS should  ̳hold 

harmless‘ hospice programs that had not requested cap recalculation against 
25

overpayments that may occur as the result of another hospice program requesting 

recalculation of its cap. This commenter also urged CMS to adopt policies allowing 

greater flexibility with respect to repayment plans for those with cap overages. 

In contrast to those supporting Option 2, 9 commenters supported an open-ended 

multi-year apportioning approach. Many of these commenters felt that changes to the 

methodology should be applied to all hospices. Several of the commenters cited the 

lawsuits filed against the Secretary which dispute the methodology for counting 

beneficiaries in the aggregate cap calculation. One of these commenters supported 

allowing re-opening of prior years‘ cap reports in conjunction with a revised regulation

allowing a ―true‖ patient-by-patient proportional allocation of beneficiaries‘ time across 

all years of service. One commenter suggested we allow re-opening of any cap demand 

which occurred after February 13, 2008, noting that this was the first date that a court 

held our regulation to be unlawful. Some of these commenters requested that we suspend 

the use of the existing regulation. Some commenters suggested that the existing 

regulation disadvantages patients with non-cancer diagnoses or who are minorities. 

Some of these commenters disputed the statistic that 99.98 percent of patients 

who died in 2007 were admitted in 2006 or 2007, and argued that increasing the time 

limit for a patient-by-patient proportional calculation to 2 years, as suggested in our 

options, would not solve the problem. These commenters, who advocated an open-ended 

patient-by-patient proportional calculation, suggested we focus on how many hospice 

patients were still alive as of the end of 2007; they stated that our statistic was based on 

the percentage of patients who died rather than on those who were alive at the end of 

2007. These commenters suggested a larger percentage of patients were alive, and cited 
26

data for patients admitted between 2003 and 2007, who were still alive as of December 

31, 2007. They believe these patients are harmed by our not using an open-ended

patient-by-patient proportional allocation in computing the aggregate cap. A commenter 

asked that contractors perform the calculation consistently, and be instructed on how to 

handle its detailed mechanics when adjustments occur. 

Some of these 9 commenters felt that the current Local Coverage Determinations 

(LCDs) were of little use in predicting patient prognoses, with one noting that the current 

LCDs led to appropriate but sometimes long-stay admissions, which often resulted in 

reimbursements that exceeded the aggregate cap. They argued that the LCDs were not 

evidence-based. One commenter asserted that every patient reviewed for appropriateness 

of admission met his contractor‘s LCDs, and yet these patients had long lengths of stay. 

Also, several of these 9 commenters suggested we support H.R. 3454, the 

Medicare Hospice Reform and Savings Act of 2009, parts of which were adopted into 

section 3132 of the Affordable Care Act. Commenters stated that the bill would have 

resulted in pay-as-you-go reductions in reimbursements for patients with lengths of stay 

exceeding 180 days. They stated that H.R. 3454 would have abolished the cap and 

eliminated unintended incentives for long stays, reduced Medicare hospice costs, and 

reduced our administrative burden. Commenters said that this legislation would have 

increased hospice rates by 20 percent for the first and last five days of hospice care that 

ends in the death of the patient; these reductions would have been offset by another 3

percent reduction in the daily hospice rates for those patients with lengths of stay beyond 

180 days. They stated that this legislation would have updated LCDs or created National 

Coverage Determinations which would be improved, evidence-based formulas for 
27

determining eligibility. Commenters also stated that this legislation would have paid

hospices more for the first and last few days of care, and less for the interim days. 

Five other commenters chose no option, or presented their own alternative 

approaches. One stated that the existing aggregate cap is supposed to represent the 

―average‖ cost of caring for a patient, not the maximum cost, where hospices have a mix 

of patients with different diagnoses and lengths of stay. This commenter felt that the 

current methodology forces hospices to focus on individual patients rather than on the 

average patient mix, and was concerned that some hospices may refuse patients with 

certain diagnoses to avoid exceeding their aggregate cap. This commenter also was 

concerned about the use of new patient elections as the methodology for counting the 

number of beneficiaries served in computing the aggregate cap.

Another commenter recommended that each beneficiary be counted as 1 every 

calendar year, because over the years, more non-cancer terminal diagnoses have 

appeared, with unpredictable end-of-life trajectories; the commenter stated that these 

non-cancer patients require higher utilization of resources. The commenter suggested 

that under this mentioned scenario, each patient on service would begin a new cap year 

every January 1 and be counted as a new patient for that year. 

A different commenter suggested that we modify the aggregate cap to focus on 

hospices instead of beneficiaries. He suggested that we change the aggregate cap 

calculation to a 180-day aggregate limit per hospice, which mirrors the 6 month 

requirement for hospice benefits to be elected. This commenter said that by monitoring 

an average day limit, all of the multi-year apportioning could be discarded, and replaced 

with a simple calculation. Another commenter suggested we allow hospices to carry 
28

forward to the following year any ―cap cushion‖ remaining at the end of the year.

Several commenters supported the idea of our aligning the cap year with the 

federal fiscal year, with some noting that the change would be appropriate for a multiyear apportioning approach. Other commenters stated that we should not change the cap 

year at this time, and recommended that we wait for future payment reform to do this. 

Many commenters asked that cap determination letters be mailed or sent in a more timely 

fashion, and a few said that contractors need to calculate caps consistently.

Commenters applauded efforts by CMS to address the concerns that arise when

hospices lack access to accurate and timely histories of patient care. They suggested that 

the new PS&R include each patient‘s total days of care, benefit periods by hospice, 

indicate the initial benefit period, and show all benefit periods that have been used. 

Commenters also urged that the systems be as ―real-time‖ as possible. Another 

commenter stated that registration into the IVACS [sic] system (which is used to access 

the PS&R) was overly cumbersome, and believed that if home care is used as a marker of 

the success of this new registration system, only 20 percent of home health agencies are 

currently registered.

Those who commented on our discussion about establishing a uniform schedule 

for contractors‘ mailing cap determination letters were supportive of such a process, and 

felt that this would assist hospices in their planning and budgeting. One commenter 

asked that the cap determination letter be considered a final determination. 

A commenter suggested that we factor a hospice‘s wage index value when 

computing a hospice‘s aggregate cap. The commenter stated that because hospice 

payments are adjusted by the wage index to account for geographic variances in labor 
29

costs, a hospice in an area of relatively high labor costs would have higher aggregate 

payments in a given cap year than a hospice in an area with relatively low labor costs. 

Yet, the yearly aggregate payments of both hospices are compared to the same cap 

amount. The commenter states that high-wage index hospices are unfairly disadvantaged 

by not factoring in the wage index values to their yearly cap amount, and hospices in 

low-wage index areas are unfairly advantaged. The commenter felt that our not wage 

adjusting the cap amount was contrary to the intent of Congress.

Response: We thank the commenters for their insights on these issues. We have 

considered the comments in developing our proposals related to changing the aggregate 

cap calculation methodology, which are described in section III.B in this proposed rule. 

We will consider other comments and suggestions for improvements in the future, as we 

undertake broader payment reform.

Comment: Some commenters asked for additional data collection on hospice 

claims or through cost reports, so that CMS will have full resource utilization data related 

to providing hospice care when it seeks to reform payments. Some commenters stated

that they were opposed to the BNAF phase-out. Others were concerned that rural 

hospices had similar or greater costs than urban hospices and yet were typically paid less 

due to wage adjustment. A commenter said that the hospital wage index used to create 

the hospice wage index was not accurate, as hospital wage patterns do not mirror those of 

hospices; this commenter suggested that we pilot test a hospice-specific wage index. 

Another commenter stated her concerns regarding the wage index value for her hospice‘s 

CBSA, and said that a neighboring CBSA was much higher. The commenter asked to be 

included in the neighboring CBSA.
30

Several commenters stated that the Common Working File (CWF) is burdensome 

and does not provide complete data on a patient‘s hospice history. A commenter added 

that some information in CWF was pulled from hospice cost reports, and was unreliable. 

She added that an industry association had presented us with a prototype cost report to 

more accurately reflect hospice costs rather than trying to force numbers from hospices 

into a home care model cost report, but that CMS has been slow in adopting this 

software. 

One commenter was concerned that CMS waived notice and comment rulemaking 

in our FY 2011 Hospice Wage Index Notice. 

Response: We thank the commenters, but we note that these comments are 

outside the scope of the solicitation.

III. Provisions of the Proposed Rule

A. FY 2012 Hospice Wage Index

1. Background

As previously noted, the hospice final rule published in the Federal Register on 

December 16, 1983 (48 FR 56008) provided for adjustment to hospice payment rates to 

reflect differences in area wage levels. We apply the appropriate hospice wage index 

value to the labor portion of the hospice payment rates based on the geographic area 

where hospice care was furnished. As noted earlier, each hospice‘s labor market area is 

based on definitions of MSAs issued by the OMB. For this proposed rule, we used the 

pre-floor, pre-reclassified hospital wage index, based solely on the CBSA designations, 

as the basis for determining wage index values for the proposed FY 2012 hospice wage 

index.
31

As noted above, our hospice payment rules utilize the wage adjustment factors 

used by the Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital wage 

adjustments. We are proposing again to use the pre-floor and pre-reclassified hospital 

wage index data as the basis to determine the hospice wage index, which is then used to 

adjust the labor portion of the hospice payment rates based on the geographic area where 

the beneficiary receives hospice care. We believe the use of the pre-floor, prereclassified hospital wage index data, as a basis for the hospice wage index, results in the 

appropriate adjustment to the labor portion of the costs. For the FY 2012 update to the 

hospice wage index, we propose to continue to use the most recent pre-floor, prereclassified hospital wage index available at the time of publication. 

2. Areas Without Hospital Wage Data 

In adopting the CBSA designations, we identified some geographic areas where 

there are no hospitals, and no hospital wage data on which to base the calculation of the 

hospice wage index. These areas are described in section I.B.4 of this proposed rule. 

Beginning in FY 2006, we adopted a policy that, for urban labor markets without an 

urban hospital from which a pre-floor, pre-reclassified hospital wage index can be 

derived, all of the urban CBSA pre-floor, pre-reclassified hospital wage index values 

within the State would be used to calculate a statewide urban average pre-floor, prereclassified hospital wage index to use as a reasonable proxy for these areas. Currently, 

the only CBSA that would be affected by this policy is CBSA 25980, Hinesville-Fort 

Stewart, Georgia. We propose to continue this policy for FY 2012.

Currently, the only rural areas where there are no hospitals from which to 

calculate a pre-floor, pre-reclassified hospital wage index are Massachusetts and Puerto 
32

Rico. In August 2007 (72 FR 50217), we adopted a methodology for imputing rural prefloor, pre-reclassified hospital wage index values for areas where no hospital wage data 

are available as an acceptable proxy; that methodology is also described in section I.B.4 

of this proposed rule. In FY 2012, Dukes and Nantucket Counties are the only areas in 

rural Massachusetts which are affected. We are again proposing to apply this 

methodology for imputing a rural pre-floor, pre-reclassified hospital wage index for those 

rural areas without rural hospital wage data in FY 2012.

However, as we noted section I.B.4 of this proposed rule, we do not believe that 

this policy is appropriate for Puerto Rico. For FY 2012, we again propose to continue to 

use the most recent pre-floor, pre-reclassified hospital wage index value available for 

Puerto Rico, which is 0.4047. This pre-floor, pre-reclassified hospital wage index value 

will then be adjusted upward by the hospice 15 percent floor adjustment in the computing 

of the proposed FY 2012 hospice wage index.

3. FY 2012 Wage Index with an Additional 15 Percent Reduced Budget Neutrality 

Adjustment Factor (BNAF).

The hospice wage index set forth in this proposed rule would be effective October 

1, 2012 through September 30, 2013. We are not proposing any modifications to the 

hospice wage index methodology. In accordance with our regulations and the agreement 

signed with other members of the Hospice Wage Index Negotiated Rulemaking 

Committee, we are continuing to use the most current hospital data available. For this 

proposed rule, the FY 2011 hospital wage index was the most current hospital wage data 

available for calculating the FY 2012 hospice wage index values. We used the FY 2011

pre-floor, pre-reclassified hospital wage index data for this calculation.
33

As noted above, for FY 2012, the hospice wage index values will be based solely 

on the adoption of the CBSA-based labor market definitions and the hospital wage index. 

We continue to use the most recent pre-floor and pre-reclassified hospital wage index 

data available (based on FY 2007 hospital cost report wage data). A detailed description 

of the methodology used to compute the hospice wage index is contained in the 

September 4, 1996 hospice wage index proposed rule (61 FR 46579), the August 8, 1997 

hospice wage index final rule (62 FR 42860), and the August 6, 2009 FY 2010 Hospice 

Wage Index final rule (74 FR 39384).

The August 6, 2009 FY 2010 Hospice Wage Index final rule finalized a provision 

to phase out the BNAF over 7 years, with a 10 percent reduction in the BNAF in FY 

2010, and an additional 15 percent reduction in FY 2011, over each of the next 5 years, 

with complete phase out in FY 2016. Therefore, in accordance with the August 6, 2009, 

FY 2010 Hospice Wage Index final rule, the BNAF for FY 2012 was reduced by an 

additional 15 percent for a total BNAF reduction of 40 percent (10 percent from FY 

2010, additional 15 percent from FY 2011, and additional 15 percent for FY 2012). 

An unreduced BNAF for FY 2012 is computed to be 0.059061 (or 5.9061

percent). A 40 percent reduced BNAF, which is subsequently applied to the pre-floor, 

pre-reclassified hospital wage index values greater than or equal to 0.8, is computed to be 

0.035437 (or 3.5437 percent). Pre-floor, pre-reclassified hospital wage index values 

which are less than 0.8 are subject to the hospice floor calculation; that calculation is 

described in section I.B.1.

The proposed hospice wage index for FY 2012 is shown in Addenda A and B. 

Specifically, Addendum A reflects the proposed FY 2012 wage index values for urban 
34

areas under the CBSA designations. Addendum B reflects the proposed FY 2012 wage 

index values for rural areas under the CBSA designations.

4. Effects of Phasing out the BNAF 

The full (unreduced) BNAF calculated for FY 2012 is 5.9061 percent. As 

implemented in the August 6, 2009 FY 2010 Hospice Wage Index final rule (74 FR 

39384), for FY 2012 we are reducing the BNAF by an additional 15 percent, for a total 

BNAF reduction of 40 percent (a 10 percent reduction in FY 2010 plus a 15 percent 

reduction in FY 2011 plus a 15 percent reduction in FY 2012), with additional reductions 

of 15 percent per year in each of the next 4 years until the BNAF is phased out in FY 

2016. 

For FY 2012, this is mathematically equivalent to taking 60 percent of the full

BNAF value, or multiplying 0.059061 by 0.60, which equals 0.035437 (3.5437 percent). 

The BNAF of 3.5437 percent reflects a 40 percent reduction in the BNAF. The 40 

percent reduced BNAF (3.5437 percent) was applied to the pre-floor, pre-reclassified 

hospital wage index values of 0.8 or greater in the proposed FY 2012 hospice wage 

index. 

The hospice floor calculation would still apply to any pre-floor, pre-reclassified 

hospital wage index values less than 0.8. Currently, the hospice floor calculation has 4 

steps. First, pre-floor, pre-reclassified hospital wage index values that are less than 0.8 

are multiplied by 1.15. Second, the minimum of 0.8 or the pre-floor, pre-reclassified 

hospital wage index value times 1.15 is chosen as the preliminary hospice wage index 

value. Steps 1 and 2 are referred to in this proposed rule as the hospice 15 percent floor 

adjustment. Third, the pre-floor, pre-reclassified hospital wage index value is multiplied 
35

by the BNAF. Fourth, the greater result of either step 2 or step 3 is the final hospice 

wage index value. The hospice floor calculation is unchanged by the BNAF reduction. 

We note that steps 3 and 4 will become unnecessary once the BNAF is eliminated. 

We examined the effects of an additional 15 percent reduction in the BNAF, for a 

total BNAF reduction of 40 percent, on the FY 2012 hospice wage index compared to 

remaining with the total 25 percent reduced BNAF which was used for the FY 2011

hospice wage index. The additional 15 percent BNAF reduction applied to the FY 2012 

wage index resulted in a 0.9 percent reduction in 84.4 percent of hospice wage index 

values, a 0.8 percent reduction in 8.6 percent of hospice wage index values, a 0.7 percent 

reduction in 0.7 percent of wage index values, and no reduction in 6.3 percent of wage 

index values. 

Those CBSAs whose pre-floor, pre-reclassified hospital wage index values had 

the hospice 15 percent floor adjustment applied before the BNAF reduction would not be 

affected by this proposed phase out of the BNAF. These CBSAs, which typically include 

rural areas, are protected by the hospice 15 percent floor adjustment. We have estimated 

that 29 CBSAs are already protected by the hospice 15 percent floor adjustment, and are 

therefore completely unaffected by the BNAF reduction. There are 323 hospices in these 

29 CBSAs.

Additionally, some CBSAs with pre-floor, pre-reclassified wage index values less 

than 0.8 will become newly eligible for the hospice 15 percent floor adjustment as a 

result of the additional 15 percent reduction in the BNAF applied in FY 2012. Areas 

where the hospice floor calculation would have yielded a wage index value greater than 

0.8 if the 25 percent reduction in BNAF were maintained, but which will have a final 
36

wage index value less than 0.8 after the additional 15 percent reduction in the BNAF (for 

a total BNAF reduction of 40 percent) is applied, will now be eligible for the hospice 15 

percent floor adjustment. These CBSAs will see a smaller reduction in their hospice 

wage index values since the hospice 15 percent floor adjustment will apply. We have 

estimated that 3 CBSAs will have their pre-floor, pre-reclassified hospital wage index 

value become newly protected by the hospice 15 percent floor adjustment due to the 

additional 15 percent reduction in the BNAF applied in FY 2012. Because of the 

protection given by the hospice 15 percent floor adjustment, these CBSAs will see 

smaller percentage decreases in their hospice wage index values than those CBSAs that 

are not eligible for the hospice 15 percent floor adjustment. This will affect those 

hospices with lower hospice wage index values, which are typically in rural areas. There 

are 44 hospices located in these 3 CBSAs.

Finally, the hospice wage index values only apply to the labor portion of the 

payment rates; the labor portion is described in section I.B.1 of this proposed rule. 

Therefore, the projected reduction in payments due solely to the additional 15 percent 

reduction of the BNAF applied in FY 2012 is estimated to be 0.6 percent, as calculated 

from the difference in column 3 and column 4 of Table 1 in section VII of this proposed 

rule. In addition, the estimated effects of the phase-out of the BNAF will be mitigated by 

any inpatient hospital market basket updates in payments. The estimated inpatient 

hospital market basket update for FY 2012 is 2.8 percent; this 2.8 percent does not reflect 

the provision in the Affordable Care Act which reduces the inpatient hospital market 

basket update for FY 2012 by 0.1 percentage point, since that reduction does not apply to 

hospices. The final update will be communicated through an administrative instruction. 
37

The combined effects of the updated wage data, an additional 15 percent reduction of the 

BNAF, and an estimated inpatient hospital market basket update of 2.8 percent for FY 

2012, are an overall estimated increase in payments to hospices in FY 2012 of 2.3 percent 

(column 5 of Table 1 in section VII of this proposed rule). 

B. Aggregate Cap Calculation Methodology

The existing method for counting Medicare beneficiaries in 42 CFR 418.309 has 

been the subject of substantial litigation. Specifically, the lawsuits challenge the way 

CMS apportions hospice patients with care spanning more than one year when 

calculating the cap. 

A number of district courts and two appellate courts have concluded that CMS‘ 

current methodology used to determine the number of Medicare beneficiaries used in the 

aggregate cap calculation is not consistent with the statute. We continue to believe that 

the methodology set forth in § 418.309(b)(1) is consistent with the Medicare statute. 

Nonetheless, we have determined that it is in the best interest of CMS and the Medicare 

program to take action to prevent future litigation, and alleviate the litigation burden on 

providers, CMS, and the courts. On April 15, 2011, we issued a Ruling entitled 

―Medicare Program; Hospice Appeals for Review of an Overpayment Determination‖ 

(CMS-1355-R), related to the aggregate cap calculation for hospices which provided for 

application of a patient-by-patient proportional methodology, as defined in the Ruling, to 

hospices that have challenged the current methodology. Specifically, the Ruling provides 

that, for any hospice which has a timely-filed administrative appeal of the methodology 

set forth at § 418.309(b)(1) used to determine the number of Medicare beneficiaries used 

in the aggregate cap calculation for a cap year ending on or before October 31, 2011, the 
38

Medicare contractors will recalculate that year‘s cap determination using the patient-bypatient proportional methodology as set forth in the Ruling. 

We are also making several proposals in this Rule that affect cap determinations 

from two time periods: 

Cap determinations for cap years ending on or before October 31, 2011; and 

Cap determinations for cap years ending on or after October 31, 2012.

1. Cap Determinations for Cap Years Ending on or Before October 31, 2011.

By its terms, the relief provided in Ruling 1355-R applies only to those cap years 

for which a hospice has received an overpayment determination and filed a timely 

qualifying appeal. For any hospice that receives relief pursuant to Ruling 1355-R in the 

form of a recalculation of one or more of its cap determinations, or for any hospice that 

receives relief from a court after challenging the validity of the cap regulation, we 

propose that the hospice‘s cap determination for any subsequent cap year also be 

calculated using a patient-by-patient proportional methodology as opposed to the 

methodology set forth in 42 CFR 418.309(b)(1). The patient-by-patient proportional 

methodology is defined below in section III.B.3.

Additionally, there are hospices that have not filed an appeal of an overpayment 

determination challenging the validity of 42 CFR 418.309(b)(1) and which are awaiting 

CMS to make a cap determination in a cap year ending on or before October 31, 2011. 

We propose to allow any such hospice provider, as of October 1, 2011, to elect to have its

final cap determination for such cap year(s), and all subsequent cap years, calculated 

using the patient-by-patient proportional methodology. 
39

Finally, we recognize that most hospices have not challenged the methodology 

used for determining the number of beneficiaries used in the cap calculation. Therefore, 

we propose that those hospices which would like to continue to have the existing 

methodology (hereafter called the streamlined methodology) used to determine the 

number of beneficiaries in a given cap year would not need to take any action, and would 

have their cap calculated using the streamlined methodology for cap years ending on or 

before October 31, 2011. The streamlined methodology is defined in section III.B.4 

below.

We do not see these provisions as being impermissibly retroactive in effect. To 

the extent that these provisions could be considered a retroactive application of a 

substantive change to a regulation, section 1871(e)(1)(A) of the Act permits retroactive 

application of a substantive change to a regulation if the Secretary determines that such 

retroactive application is necessary to comply with statutory requirements or that failure 

to apply the change retroactively would be contrary to the public interest. We determine 

that for providers who have successfully sought to have the existing cap methodology set 

aside as invalid by the courts, retroactive application of the proposed Rule would be 

necessary to continue to comply with the statutory requirement in section 1814(i)(2) that 

the Secretary apply an aggregate cap to these hospices‘ reimbursements. We also 

determine that it would be in the public interest to calculate the aggregate hospice caps 

for subsequent years for these providers and for other providers that have filed appeals 

challenging the validity of the current methodology using the patient-by-patient 

proportional methodology to prevent the over-counting of beneficiaries for those years 

and to prevent repetitive litigation. We further determine that it would be in the public 
40

interest to permit providers that have not appealed their aggregate cap determinations to 

elect to have the patient-by-patient proportional methodology applied to aggregate cap 

determinations that have not been issued as of October 1, 2011. Allowing these hospices 

to elect to use the patient-by-patient proportional methodology would alleviate the burden 

on the hospices and the agency of continued appeals and litigation regarding the validity 

of the aggregate hospice cap calculation.

2. Cap Determinations for Cap Years Ending on or After October 31, 2012.

We continue to believe that the methodology set forth in § 418.309(b)(1) is consistent 

with the Medicare statute. We emphasize that nothing in our proposals in section III.B.1 

above constitutes an admission as to any issue of law or fact. In light of the court 

decisions, however, we propose to change the hospice aggregate cap calculation 

methodology policy for cap determinations ending on or after October 31, 2012 (the 2012 

cap year). Specifically, for the cap year ending October 31, 2012 (the 2012 cap year) and 

subsequent cap years, we propose to revise the methodology set forth at § 418.309(b)(1) 

to adopt a patient-by-patient proportional methodology when computing hospices‘ 

aggregate caps. We also propose to ―grandfather‖ in the current streamlined 

methodology set forth in § 418.309(b)(1) for those hospices that elect to continue to have 

the current streamlined methodology used to determine the number of Medicare 

beneficiaries in a given cap year, for the following reasons. 

As described in section II of this proposed rule, we solicited comments on 

modernizing the cap calculation in our FY 2011 Hospice Wage Index Notice with 

Comment Period. We summarized those comments in section II of this proposed rule, 

and noted that many commenters, including the major hospice associations, were 
41

concerned about the burden to hospices of changing the cap calculation methodology, 

and urged us to defer across-the-board changes to the cap methodology until we analyze 

the cap in the context of broader payment reform. Specifically, commenters urged CMS 

to retain the current methodology, as it results in a more streamlined and timely cap 

determination for providers as compared to other options. Also, commenters noted that 

once made, cap determinations usually remain final. Commenters were concerned that a 

proportional methodology could result in prior year cap determination revisions to 

account for situations in which the percentage of time a beneficiary received services in a 

prior cap year declines as his or her overall hospice stay continues into subsequent cap 

years, and these revisions may result in new overpayments for some providers. And, 

commenters noted that the vast majority of providers don‘t exceed the cap, so burdening 

these providers with an across-the-board change isn‘t justified. We also note that on 

January 18, 2011, President Obama issued an Executive Order entitled ―Improving 

Regulation and Regulatory Review‖ (E.O. 13563), which instructs federal agencies to 

consider regulatory approaches that reduce burdens and maintain flexibility and freedom 

of choice for the public. We believe that offering hospices the option to elect to continue 

to have the streamlined methodology used in calculating their caps is in keeping with this 

Executive Order.

For these reasons, for the cap year ending October 31, 2012 (the 2012 cap year) 

and subsequent cap years, we propose that the hospice aggregate cap be calculated using 

the patient-by-patient proportional methodology, but propose to allow hospices the option 

of having their cap calculated via the current streamlined methodology, as discussed 

below. We believe this two-pronged approach is responsive to the commenters who do 
42

not want to be burdened with a change in the cap calculation methodology at this time, 

while also conforming with decisional law and meeting the needs of hospices that would 

prefer the patient-by-patient proportional methodology of counting beneficiaries. This 

grandfathering proposal to allow hospices the option of having their caps calculated 

based on application of the current streamlined methodology only applies to currently 

existing hospices that have, or will have, had a cap determination calculated under the 

streamlined methodology. New hospices that have not had their cap determination 

calculated using the streamlined methodology do not fall under this proposed

―grandfather‖ policy. 

We are in the early stages of the analyses related to payment reform. As such, the 

role of the aggregate cap in the reformed payment system is unknown at this time. If the 

reformed system and statute continue to require a limitation on hospice aggregate 

payments, we would look to apply one aggregate cap policy consistently to all hospices, 

and will consider commenters‘ suggestions for improvements in the aggregate cap as we 

analyze payment reform options. 

3. Patient-by-Patient Proportional Methodology

For the cap year ending October 31, 2012 (the 2012 cap year), and for all 

subsequent cap years (unless changed by future rulemaking), we propose that the 

Medicare contractors would apply the patient-by-patient proportional methodology 

(defined below) to a hospice‘s aggregate cap calculations unless the hospice elects to 

have its cap determination for cap years 2012 and beyond calculated using the current, 

streamlined methodology set forth in § 418.309(b)(1). 

Under the proposed patient-by-patient proportional methodology, a hospice 
43

includes in its number of Medicare beneficiaries only that fraction which represents the 

portion of a patient‘s total days of care in all hospices and all years that was spent in that 

hospice in that cap year, using the best data available at the time of the calculation. We 

propose that the whole and fractional shares of Medicare beneficiaries‘ time in a given 

cap year would then be summed to compute the total number of Medicare beneficiaries 

served by that hospice in that cap year. 

When a hospice‘s cap is calculated using the patient-by-patient proportional 

methodology and a beneficiary included in that calculation survives into another cap 

year, the contractor may need to make adjustments to prior cap determinations, subject to 

existing re-opening regulations. 

4. Streamlined Methodology

As we described above, comments received from hospices and the major hospice 

associations urged CMS to defer across-the-board changes to the cap calculation 

methodology until we reform hospice payments. Several of these commenters feared that 

an across-the-board change in methodology now may disadvantage them by potentially 

placing them at risk for incurring new cap overpayments. Additionally, approximately 90 

percent of hospices do not exceed the cap and have not objected to the current 

methodology, and commenters expressed concern that adapting to a process change 

would be costly and burdensome. In response to these concerns, we propose that a 

hospice may exercise a one-time election to have its cap determination for cap years 2012 

and beyond calculated using the current, streamlined methodology set forth in 

§ 418.309(b). We propose that the option to elect the continued use of the streamlined 

methodology for cap years 2012 and beyond would be available only to hospices that 
44

have had their cap determinations calculated using the streamlined methodology for all 

years prior to cap year 2012. In section III.B.5 (―Changing Methodologies‖) below, we 

describe our detailed rationale for limiting the election. Allowing hospices which, prior 

to cap year 2012, have their cap determination(s) calculated pursuant to a patient-bypatient proportional methodology to elect the streamlined methodology for cap years 

2012 and beyond could result in over-counting patients and introduce a program 

vulnerability. 

Our current policy set forth in the existing § 418.309(b)(2) describes that when a 

beneficiary receives care from more than one hospice during a cap year or years, each 

hospice includes in its number of Medicare beneficiaries only that fraction which 

represents the portion of a patient's total stay in all hospices that was spent in that 

hospice. We propose to revise the regulatory text at § 418.309(b)(2) to clarify that each 

hospice includes in its number of Medicare beneficiaries only that fraction which 

represents the portion of a patient‘s total days of care in all hospices and all years that 

was spent in that hospice in that cap year, using the best data available at the time of the 

calculation. We also propose to add language to make clear that cap determinations are 

subject to reopening/adjustment to account for updated data. 

5. Changing Methodologies

We believe our proposed policies, described above, provide hospices with a 

reasonable amount of flexibility with regard to their cap calculation. However, we 

believe that if we allowed hospices to switch back and forth between methodologies, it 

would greatly complicate the cap determination calculation, would be difficult to 

administer, and might lead to inappropriate switching by hospices seeking merely to 
45

maximize Medicare payments. Additionally, in the year of a change in the calculation 

methodology, there is a potential for over-counting some beneficiaries. Allowing 

hospices to switch back and forth between methodologies would perpetuate the risk of 

over-counting beneficiaries. Therefore, we propose that:

1) Those hospices that have their cap determination calculated using the patient-bypatient proportional methodology for any cap year prior to the 2012 cap year would 

continue to have their cap calculated using the patient-by-patient proportional 

methodology for the 2012 cap year and all subsequent cap years; and,

2) All other hospices would have their cap determinations for the 2012 cap year and 

all subsequent cap years calculated using the patient-by-patient proportional methodology 

unless they make a one-time election to have their cap determinations for cap year 2012 

and beyond calculated using the streamlined methodology. 

3) A hospice can elect the streamlined methodology no later than 60 days following 

the receipt of its 2012 cap determination.

4) Hospices which elect to have their cap determination calculated using the 

streamlined methodology may later elect to have their cap determinations calculated 

pursuant to the patient-by-patient proportional methodology by either:

a. electing to change to the patient-by-patient proportional methodology; or

b. appealing a cap determination calculated using the streamlined methodology 

to determine the number of Medicare beneficiaries.

5) If a hospice elects the streamlined methodology, and changes to the patientby-patient proportional methodology for a subsequent cap year, the hospice‘s aggregate 

cap determination for that cap year and all subsequent cap years is to be calculated using 
46

the patient-by-patient proportional methodology. As such, past cap year determinations 

may be adjusted to prevent the over-counting of beneficiaries, notwithstanding the 

ordinary limitations on reopening. 

6. Other Issues

Contractors will provide hospices with instructions regarding the cap 

determination methodology election process. Regardless of which methodology is used, 

the contractor will continue to demand any additional overpayment amounts due to CMS 

at the time of the hospice cap determination. The contractor will continue to include the 

hospice cap determination in a letter which serves as a notice of program reimbursement 

under 42 CFR 405.1803(a)(3). Cap determinations are subject to the existing CMS reopening regulations. 

In our FY 2011 Hospice Wage Index Notice with Comment Period, we discussed 

aligning the cap year timeframe with that of the federal fiscal year. Commenters 

suggested we not make changes to the cap year timeframe at this time, but defer changes 

until broader payment reform occurs. We agree with commenters, and our cap year 

continues to be defined as November 1st to October 31st.

In that FY 2011 Hospice Wage Index Notice with Comment Period, we also 

discussed the timeframe used for counting beneficiaries under the streamlined 

methodology, which is September 28th to September 27th. This timeframe for counting 

beneficiaries was implemented because it allows those beneficiaries who elected hospice 

near the end of the cap year to be counted in the year when most of the services were 

provided. However, for those hospices whose cap determinations are calculated using a 

patient-by-patient proportional methodology for counting the number of beneficiaries, we 
47

propose to count beneficiaries and their associated days of care from November 1st

through October 31st, to match that of the cap year. This ensures that the proportional 

share of each beneficiary‘s days in that hospice during the cap year is accurately 

computed. 

Finally, we note that the existing regulatory text at 418.308(b)(1) refers to the 

timeframe for counting beneficiaries as ―(1)...the period beginning on September 28 (35 

days before the beginning of the cap period) and ending on September 27 (35 days before 

the end of the cap period).‖ The period beginning September 28 is actually 34 days 

before November 1 (the beginning of the cap year), rather than 35 days. We propose to 

correct this in the regulatory text, and to change references to the ―cap period‖ to that of 

the ―cap year‖ to correctly reference the time frame for cap determinations. 

7. Changes to Regulatory Text

As a result of the proposals made in this section, we propose to change the 

regulatory text at 42 CFR §418.309 as follows:

We propose to change the title of 418.309 from ―Hospice Cap Amount‖ to 

―Hospice Aggregate Cap‖ to clarify what this section covers. The ―cap amount‖ is 

defined as the per-beneficiary dollar amount which is updated annually, and is only one 

component of the aggregate cap calculation. At the beginning of the regulatory text for 

this section, we also propose to revise the existing language to refer to the methodologies 

given in (b) and (c) which follow.

In §418.309(b), we propose to add the title ―Streamlined Methodology Defined‖ 

at the beginning of the regulatory text, and to replace ―Each hospice‘s cap amount‖ with 
48

―A hospice‘s aggregate cap‖. In §418.309(b)(1), we propose to revise the language to 

note that it applied to those beneficiaries who have received care from only one hospice. 

We also propose to correct the existing regulatory text which reads ―... (35 days before 

the beginning of the cap period)...‖ to read ―...(34 days before the beginning of the cap 

year)...‖, and change existing regulatory text which reads ―...and ending on September 27 

(35 days before the end of the cap period)...‖ to read ―...and ending September 27 (35 

days before the end of the cap year)...‖. 

We propose to revise §418.309(b)(2) to describe the streamlined methodology for 

computing fractional shares of a beneficiary when a beneficiary has received care from 

more than one hospice, and to note that the computation considers all cap years and all 

hospices, using the best data available at the time of the calculation. We also propose to 

add language that notes that the aggregate cap calculation for a given cap year may be 

adjusted after the calculation for that year based on updated data.

We propose to add §418.309(c), which would be entitled ―Patient-by-Patient 

Proportional Methodology Defined”. We propose that a hospice's aggregate cap would 

be calculated by multiplying the adjusted cap amount by the number of Medicare 

beneficiaries. For the purposes of the patient-by-patient proportional methodology, we 

propose that a hospice would include in its number of Medicare beneficiaries only that 

fraction which represents the portion of a patient‘s total days of care in all hospices and 

all years that was spent in that hospice in that cap year, using the best data available at the 

time of the calculation. We propose that the total number of Medicare beneficiaries for a 

given hospice‘s cap year would be determined by summing the whole or fractional share 
49

of each Medicare beneficiary that received hospice care during the cap year, from that 

hospice. 

Finally, we also propose that the aggregate cap calculation for a given cap year 

could be adjusted after the calculation for that year based on updated data.

We propose to add paragraph (d) to section 418.309, which would be entitled 

―Application of Methodologies.” We propose that for cap years ending October 31, 2011 

and for prior cap years, a hospice's aggregate cap would be calculated using the 

streamlined methodology. However, we propose that a hospice that has not received a 

cap determination for a cap year ending on or before October 31, 2011 as of October 1, 

2011, could elect to have its final cap determination for such cap years calculated using 

the patient-by-patient proportional methodology. Additionally, we propose that a hospice 

that has filed a timely appeal regarding the methodology used for determining the number 

of Medicare beneficiaries in its cap calculation for any cap year would be deemed to have 

elected that its cap determination for the challenged year, and all subsequent cap years, be 

calculated using the patient-by-patient proportional methodology.

We also propose that for cap years ending October 31, 2012, and all subsequent 

cap years, a hospice's aggregate cap would be calculated using the patient-by-patient 

proportional methodology. We also propose that a hospice that has had its cap 

calculated using the patient-by-patient proportional methodology for any cap year(s) prior 

to the 2012 cap year would not be eligible to elect the streamlined methodology, and 

would have to continue to have the patient-by-patient proportional methodology used to 

determine the number of Medicare beneficiaries in a given cap year. We propose that a 

hospice that is eligible to make a one-time election to have its cap calculated using the 
50

streamlined methodology would have to make that election no later than 60 days after 

receipt of its 2012 cap determination. We also propose that a hospice‘s election to have 

its cap calculated using the streamlined methodology would remain in effect unless the 

hospice subsequently would submit a written election to change the methodology used in 

its cap determination to the patient-by-patient proportional methodology; or the hospice 

would appeal the streamlined methodology used to determine the number of Medicare 

beneficiaries used in the aggregate cap calculation. 

Finally, we propose that if a hospice that elected to have its aggregate cap calculated 

using the streamlined methodology subsequently elected the patient-by-patient 

proportional methodology or appealed the streamlined methodology, the hospice‘s 

aggregate cap determination for that cap year and all subsequent cap years would be 

calculated using the patient-by-patient proportional methodology. As such, we propose 

that past cap year determinations could be adjusted to prevent the over-counting of 

beneficiaries, notwithstanding the ordinary limitations on reopening. 

Throughout §418.309 we propose to delete references to the intermediary, as this 

terminology is now outdated. 

C. Hospice Face-to-Face Requirement 

Section 3132(b) of the Affordable Care Act of 2010 (Pub. L. 111-148, enacted 

March 23, 2010) amended section 1814(a)(7) of the Act by adding an additional 

certification requirement that beginning January 1, 2011, a hospice physician or nurse 

practitioner (NP) must have a face-to-face encounter with every hospice patient prior to 

the 180-day recertification of the patient‘s terminal illness to determine continued 

eligibility. The statute also requires that the hospice physician or NP who performs the 
51

encounter attest that such a visit took place in accordance with procedures established by 

the Secretary. Although the provision allows an NP to perform the face-to-face 

encounter and attest to it, section 1814(a)(7)(A) of the Act continues to require that a 

hospice physician must certify and recertify the terminal illness. 

The requirement for a physician face-to-face encounter for long-stay hospice 

patients‘ was first suggested by Medicare‘s Payment Advisory Commission (MedPAC) 

in their March 2009 Report to the Congress (MedPAC, Report to the Congress: Medicare 

Payment Policy, Chapter 6, March 2009, pp. 365 through 371) (―the MedPAC Report‖). 

MedPAC recommended that a hospice physician or advance practice nurse visit hospice 

patients prior to the 180-day recertification of terminal illness in order to increase 

physician accountability in the recertification and help ensure appropriate use of the 

benefit.

We implemented section 1814(a)(7), as amended by section 3132(b) of the 

Affordable Care Act in the November 17, 2010 final rule (75 FR 70372), published in the 

Federal Register, entitled ―Home Health Prospective Payment System Rate Update for 

CY 2011; Changes in Certification Requirements for Home Health Agencies and 

Hospices‖, hereinafter referred to as the CY 2011 HH PPS Final Rule. The statute 

requires that for hospice recertifications occurring on or after January 1, 2011, a face-toface encounter take place before the 180th

-day recertification. We decided that the 180th-

day recertification and subsequent benefit periods corresponded to the recertification for 

a patient‘s third or subsequent benefit period. 

In the CY 2011 HH PPS final rule, we describe our rationale for defining the 

180th-day recertification as the recertification which occurs at the start of the third benefit 
52

period (that is, the benefit period after the second 90-day benefit period). We considered 

the existing language used in the statute and in our regulations, all of which is structured 

around the concept of benefit periods which, by statute, cannot last longer than a 

maximum number of days (90 days for the first two and 60 days for subsequent benefit 

periods). Our regulatory language at §418.22 requires certifications at the beginning of 

the benefit periods. For these reasons we defined the 180th-day recertification to be the 

recertification which occurs at the start of the third benefit period (75 FR 70437).

These new provisions at §418.22(a) and (b), as set out in the CY 2011 HH PPS

final rule (75 FR 70463) include the following requirements:

The encounter must occur no more than 30 calendar days prior to the start of the 

third benefit period and no more than 30 calendar days prior to every subsequent benefit 

period thereafter.

The hospice physician or NP who performs the encounter attests in writing that he 

or she had a face-to-face encounter with the patient, and includes the date of the 

encounter. The attestation, which includes the physician‘s signature and the date of the 

signature, must be a separate and distinct section of, or an addendum to, the 

recertification form, and must be clearly titled.

The physician narrative associated recertifications for the third and subsequent 

benefit period recertifications include an explanation of why the clinical findings of the 

face-to-face encounter support a prognosis that the patient has a life expectancy of 6 

months or less. 

When an NP performs the encounter, the NP‘s attestation must state that the 
53

clinical findings of that visit were provided to the certifying physician, for use in 

determining whether the patient continues to have a life expectancy of 6 months or less, 

should the illness run its normal course.

The hospice physician or the hospice NP can perform the encounter. We define a 

hospice physician as a physician who is employed by the hospice or working under 

contract with the hospice, and a hospice NP must be employed by the hospice. 

The hospice physician who performs the face-to-face encounter and attests to it 

must be the same physician who certifies the patient‘s terminal illness and composes the 

recertification narrative (75 FR 70445). 

In this proposed rule, we would allow any hospice physician to perform the 

encounter and inform the certifying physician for this last requirement for the following 

reasons: 

Since the publication of the CY 2011 HH PPS final rule, we were told of the 

concerns of stakeholders, such as individual hospices, major hospice associations, 

physicians, and patient advocacy groups regarding the hospice physician performing 

both the face-to-face encounter and the recertification. Most of the concerns were that 

this requirement could potentially result in a substantial risk of harm to terminally ill 

patients. We find many of these concerns compelling. Specifically, stakeholders 

describe the challenge rural areas and medically underserved areas have in employing 

hospice physicians. Often, the physicians employed are part-time, and sometimes 

several part-time physicians are employed by the hospice. These physicians furnish 

medically necessary physician services to hospice patients as a team or group practice 
54

would, communicating with each other regarding the patients‘ conditions and sharing 

responsibility for the patients‘ care. In requiring the same physician to perform both the 

face-to-face encounter and the certification, stakeholders argued that we were imposing 

an unnecessary complexity to the face-to-face encounter requirement which could

disadvantage those patients in areas of the country whom they believed were at the 

greatest risk and could negatively affect access-to-care. Many hospices stated that they 

would not find it feasible to meet this strict implementation requirement and they would

no longer be able to serve patients in the third and later benefit periods. In addition, 

stakeholders stated that when MedPAC recommended a face-to-face encounter for longstay hospice patients, it also expressed a concern that the requirement could pose an 

access risk in rural areas (MedPAC Report at 366). To mitigate that risk, MedPAC 

recommended that NPs also be allowed to perform the encounter, and the Congress 

adopted that recommendation. Further, stakeholders stated that because the Congress 

allowed an NP to perform the encounter and inform the recertifying physician, it would 

be illogical for CMS to preclude another hospice physician from performing the 

encounter and informing the recertifying physician. The stakeholders stated that in 

having done so, CMS inadvertently created an access to care risk that MedPAC and the 

Congress had tried to prevent. Stakeholders stated that long-stay patients in rural and 

medically underserved areas would be denied access during a time when many are in the 

final stages of their disease trajectory and needed hospice care the most. Stakeholders 

suggested that such patients would be denied the pain and symptom management control 

that they require as a result of CMS‘s regulatory limitation. In addition, they stated that 

hospices in rural and medically underserved areas need the flexibility of allowing NPs 
55

and any of their hospice physicians to perform the required patient encounter in order to 

serve such patients.

Many stakeholders also stated that requiring the same hospice physician to 

perform both the face-to-face encounter and the recertification was contrary to the intent 

of the statute. They pointed out that the statutory language required that a hospice 

physician or NP perform the encounter, but the statute did not mandate that the physician 

who performs the encounter must be the same physician who recertifies the patient. In 

addition, the stakeholders observed that if the Congress had intended to require the 

physician who performed the encounter to be the same physician who recertified the 

patient, then the Congress could have included that requirement in the law. 

Stakeholders also stated that MedPAC did not recommend that the physician who 

performed the encounter be the same physician that recertified the patient. They referred 

us to discussions in the MedPAC Report, which first recommended the face-to-face 

encounter. (MedPAC Report, 357 through 371.)

We note that some of these stakeholders were part of the technical expert panel 

which MedPAC convened in 2008 to develop the recommendations contained in the 

MedPAC Report. The report described the panel‘s discussions surrounding the need for 

more physician involvement in hospice/palliative care, and concerns regarding some 

hospices‘ practices being motivated by financial incentives (MedPAC Report, 357 

through 367). The report also discussed the panel‘s concern that hospice medical 

directors could at times be influenced by such incentives and should be more accountable 

for eligibility determinations. However, we believe it is possible that the scenario where 

the hospice medical director was the certifying physician and a different hospice 
56

physician performed the encounter and informed the medical director about the patient‘s 

condition the result could be better physician accountability than if the medical director 

performed the encounter. The physician who performed the encounter would serve as an 

independent assessor of the patient‘s terminal condition, and would provide a check and 

balance to the medical director‘s possible financial incentive to recertify. 

Stakeholders also asserted that any hospice physician who saw the patient could 

achieve the goals described in the MedPAC report and the statute. The report described 

the tension between hospice physicians and non-physician staff and how the emotional

attachment to patients of non-physician staff could lead to inappropriate recertifications. 

Stakeholders claim that this risk could be mitigated by any hospice physician seeing the 

patient and informing the certifying physician. More importantly, the stakeholders 

referred to the MedPAC report discussion regarding concerns that a physician face-toface encounter provision might not be feasible in rural areas where there were physician 

shortages. In recommending that non-physician practitioners be allowed to perform the 

encounter, MedPAC identified a need to allow flexibility regarding the practitioner who 

performs the encounter, especially in rural areas. Commenters stated that MedPAC and 

the Congress intended for long-stay hospice patients to be seen by any hospice physician 

or NP prior to the 180-day recertification.

In this proposed rule, we propose to revise the policy finalized in the CY 2011 

HH PPS final rule published on November 17, 2010. 

Specifically, in the CY 2011 HH PPS final rule, we implemented section 3132(b) 

of the Affordable Care Act, which requires that beginning January 1, 2011, a hospice 

physician or NP have a face-to-face encounter with every hospice patient prior to the 
57

180-day recertification of the patient‘s terminal illness to determine continued eligibility. 

In implementing this provision, in response to comments in the final rule, we stated that 

the hospice physician who performed the face-to-face encounter must be the same 

physician who recertifies the patient‘s terminal illness and composes the recertification 

narrative. 

As a result of stakeholders concerns resulting from the final rule policy, we 

propose to remove this limitation in this proposed rule. We propose that any hospice 

physician can perform the face-to-face encounter regardless of whether that physician 

recertifies the patient‘s terminal illness and composes the recertification narrative. In 

keeping with this proposal, we also propose to change the regulatory text at 418.22(b)(4) 

to state that the attestation of the nurse practitioner or a non-certifying hospice physician 

shall state that the clinical findings of that encounter were provided to the certifying 

physician, for use in determining continued eligibility for hospice. This proposal reflects 

the Centers for Medicare and Medicaid Services‘ commitment to the general principles of 

the President‘s Executive Order released January 18, 2011 entitled ―Improving 

Regulation and Regulatory Review‖, as it would reduce burden to hospices and hospice 

physicians and increase flexibility in areas of physician shortages. We are soliciting 

public comments on this proposal. 

D. Technical Proposals and Clarification

1. Hospice Local Coverage Determinations

In the November 17, 2010 ―CY 2011 Home Health Prospective Payment System 

Rate Update for Calendar Year 2011; Changes in Certification Requirements for Home 

Health Agencies and Hospices Final Rule‖, we implemented new requirements for a 
58

face-to-face encounter which were mandated by the Affordable Care Act of 2010. A 

commenter asked how the face-to-face encounter related to Local Coverage 

Determinations (LCDs), and if the expectation was that the physician would verify the 

patient‘s condition based on the LCDs. Other commenters asked for guidance regarding 

what the encounter should include (that is, elements that make up an encounter) for 

purposes of satisfying the requirement. When describing how to assess patients for 

recertification, our response cited the LCDs of several contractors (see 75 FR 70447–

70448). The response also included common text from those LCDs related to clinical 

findings to use in making the assessment and determining whether a patient was

terminally ill. We stated that the clinical findings should include evidence from the three 

following categories: (1) Decline in clinical status guidelines (for example, decline in 

systolic blood pressure to below 90 or progressive postural hypotension); (2) Non 

disease-specific base guidelines (that is, decline in functional status) as demonstrated by 

Karnofsky Performance Status or Palliative Performance Score and dependence in two or 

more activities of daily living; and (3) Co-morbidities. We would note that because the 

language was not mandatory, there was never any intention that this response have a 

legally binding effect on hospices. These are suggestions as to elements of a certification 

or recertification which could be deemed to be indicative of a terminal condition. 

However, this was not meant to be an exhaustive or exclusive list. Because there has 

been some confusion about the extent to which these items exclude other possible 

scenarios, we propose to clarify that the clinical findings included in the comment 

response were provided as an example of findings that can be used in determining 

continued medical eligibility for hospice care. The illustrative clinical findings 
59

mentioned above are not mandatory national policy. We reiterate that certification or 

recertification is based upon a physician‘s clinical judgment, and is not an exact science. 

Congress made this clear in section 322 of the Benefits Improvement and Protection Act 

of 2000 (BIPA), which says that the hospice certification of terminal illness ―shall be 

based on the physician‘s or medical director‘s clinical judgment regarding the normal 

course of the individual‘s illness.‖

2. Definition of Hospice Employee

As noted above, in the November 17, 2010 ―CY 2011 Home Health Prospective 

Payment System Rate Update for Calendar Year 2011; Changes in Certification 

Requirements for Home Health Agencies and Hospices Final Rule,‖ we implemented 

new requirements for a face-to-face encounter, which were mandated by the Affordable 

Care Act. As part of that implementation, we required that a hospice physician or nurse 

practitioner must perform the face-to-face encounters. Several commenters asked us to 

clarify who is considered a ―hospice physician or nurse practitioner‖ (see 75 FR 70443-

70445). We stated that a hospice physician or nurse practitioner must be employed by 

the hospice, and that hospice physicians could also be working under arrangement with 

the hospice (i.e., contracted). We added that Section 418.3 defines a hospice employee as 

someone who is receiving a W–2 form from the hospice or who is a volunteer. The 

complete definition of a hospice employee at 418.3 is as follows: ―Employee means a 

person who: (1) Works for the hospice and for whom the hospice is required to issue a 

W–2 form on his or her behalf; (2) if the hospice is a subdivision of an agency or 

organization, an employee of the agency or organization who is assigned to the hospice; 

or (3) is a volunteer under the jurisdiction of the hospice.‖ We received a number of 
60

questions from the industry about the definition of an employee and whether it included

personnel who were employed by an agency or organization that has a hospice 

subdivision and who were assigned to that hospice. We are clarifying that entire 

definition of employee given at 418.3 (shown above) applies. Therefore, if the hospice is 

a subdivision of an agency or organization, an employee of the agency or organization 

who is assigned to the hospice is a hospice employee. 

3. Timeframe for Face-to-Face Encounters

In the November 17, 2010 ―CY 2011 Home Health Prospective Payment System 

Rate Update for Calendar Year 2011; Changes in Certification Requirements for Home 

Health Agencies and Hospices Final Rule,‖ we also implemented policies related to the 

timeframe for performing a face-to-face encounter. We cited the statutory language from 

section 3132 of the Affordable Care Act, which says that on and after January 1, 2011, a 

hospice physician or nurse practitioner must have a face-to-face encounter with the 

beneficiary to determine continued eligibility of the beneficiary for hospice care prior to 

the 180th-day recertification and each subsequent recertification (see 75 FR 70435). We 

also defined the 180th-day recertification to be the recertification which occurs at the 3rd

benefit period (see 75 FR 70436-70437). We implemented a requirement that the faceto-face encounter occur no more than 30 calendar days prior to the 3rd or later benefit 

periods, to allow hospices flexibility in scheduling the encounter (see 75 FR 70437-

70439). We emphasized throughout the final rule that the encounter must occur ―prior 

to‖ the 3rd benefit period recertification, and each subsequent recertification. The 

regulatory text associated with these changes is found at 42 CFR 418.22(a)(4), and reads, 

―As of January 1, 2011, a hospice physician or hospice nurse practitioner must have a 
61

face-to-face encounter with each hospice patient, whose total stay across all hospices is 

anticipated to reach the 3rd benefit period, no more than 30 calendar days prior to the 3rd

benefit period recertification, and must have a face-to-face encounter with that patient no 

more than 30 calendar days prior to every recertification thereafter, to gather clinical 

findings to determine continued eligibility for hospice care.‖ We believe our final policy 

states clearly that the face-to-face encounter must occur prior to, but no more than 30 

calendar days prior to, the 3rd benefit period recertification and each subsequent 

recertification. However, we are concerned that our regulation text above could lead a 

hospice to believe that the face-to-face encounter could occur in an open-ended fashion 

after the start of a benefit period in which it is required, and that the limitation on the 

time-frame was only on how far in advance of the start of the benefit period that the 

encounter could occur. Our policy, as stated in the final rule, is that a face-to-face 

encounter is required prior to the 3rd benefit period recertification and each recertification 

thereafter (75 FR 70454). Therefore, we propose to revise the regulation text to more 

clearly state that the encounter is required ―prior to‖ the 3rd benefit period recertification, 

and each subsequent recertification. As such, we propose to change the regulatory text to 

read ―(4) Face-to-face encounter. As of January 1, 2011, a hospice physician or hospice 

nurse practitioner must have a face-to-face encounter with each hospice patient whose 

total stay across all hospices is anticipated to reach the 3rd benefit period. The face-toface encounter must occur prior to but no more than 30 calendar days prior to the 3rd

benefit period recertification, and every benefit period recertification thereafter, to gather 

clinical findings to determine continued eligibility for hospice care.‖

4. Hospice Aide and Homemaker Services 
62

The hospice Conditions of Participation (CoPs) were updated in 2008, after being 

finalized on June 5, 2008 in the Hospice Conditions of Participation Final Rule (73 FR 

32088). Those revised CoPs included changing the term ―home health aide‖ to ―hospice 

aide‖. In our FY 2010 Hospice Wage Index Final Rule (74 FR 39384), we updated 

language in several areas of our regulatory text to use this new terminology, including at 

42 CFR 418.202(g). The regulatory text at 418.202(g) describes hospice aide and 

homemaker services. The last sentence of the regulatory text that was finalized is about 

homemaker services, however the word ―homemaker‖ was inadvertently replaced with 

―aide‖. The revised regulatory text also inadvertently deleted the sentence which read 

―Aide services must be provided under the supervision of a registered nurse.‖ Finally, 

the title of this section of the regulatory text continues to refer to section 418.94 of the 

CoPs. However, section 418.94 no longer exists, and was updated in the 2008 Hospice 

CoP Final Rule to section 418.76. We propose to correct the regulatory text at 

418.202(g) to update the CoP reference to show section 418.76, to add back the sentence 

about supervision which was deleted, and to correct the last sentence to refer to 

―homemakers‖ rather than ―aides.‖

E. Quality Reporting For Hospices

1. Background and Statutory Authority

CMS seeks to promote higher quality and more efficient health care for Medicare 

beneficiaries. Our efforts are furthered by the quality reporting programs coupled with 

public reporting of that information. Such quality reporting programs exist for various 

settings such as the Hospital Inpatient Quality Reporting (Hospital IQR) Program. In 

addition, CMS has implemented quality reporting programs for hospital outpatient 
63

services, the Hospital Outpatient Quality Data Reporting Program (HOP QDRP), and for 

physicians and other eligible professionals, the Physician Quality Reporting System

(PQRS). CMS has also implemented quality reporting programs for home health 

agencies and skilled nursing facilities that are based on conditions of participation, and an 

end-stage renal disease quality improvement program that links payment to performance

based on requirements in section 153(c) of the Medicare Improvement for Patients and 

Providers Act of 2008.

Section 3004 of the Affordable Care Act amends the Social Security Act to

authorize additional quality reporting programs, including one for hospices. Section 

1814(i)(5)(A)(i) of the Act requires that beginning with FY 2014 and each subsequent 

fiscal year, the Secretary shall reduce the market basket update by 2 percentage points for 

any hospice that does not comply with the quality data submission requirements with 

respect to that fiscal year. Depending on the amount of annual update for a particular 

year, a reduction of 2 percentage points may result in the annual market basket update 

being less than 0.0 percent for a fiscal year and may result in payment rates that are less 

than payment rates for the preceding fiscal year. Any reduction based on failure to 

comply with the reporting requirements, as required by section 1814(i)(5)(B) of the Act, 

would apply only with respect to the particular fiscal year involved. Any such reduction 

will not be cumulative and will not be taken into account in computing the payment 

amount for subsequent fiscal years. 

Section 1814(i)(5)(C) of the Act requires that each hospice submit data to the 

Secretary on quality measures specified by the Secretary. Such data must be submitted in 

a form and manner, and at a time specified by the Secretary. Any measures selected by 
64

the Secretary must have been endorsed by the consensus-based entity which holds a 

contract regarding performance measurement with the Secretary under section 1890(a) of 

the Act. This contract is currently held by the National Quality Forum (NQF). However, 

Section 1814(i)(5)(D)(ii) provides that in the case of a specified area or medical topic 

determined appropriate by the Secretary for which a feasible and practical measure has 

not been endorsed by the consensus-based entity the Secretary may specify a measure(s) 

that is(are) not so endorsed as long as due consideration is given to measures that have 

been endorsed or adopted by a consensus-based organization identified by the Secretary. 

Under section 1814(i)(5)(D)(iii) of the Act, the Secretary must not later than 

October 1, 2012 publish selected measures that will be applicable with respect to 

FY 2014. 

Section 1814(i)(5)(E) of the Act requires the Secretary to establish procedures for 

making data submitted under the hospice quality reporting program available to the 

public. The Secretary must ensure that a hospice has the opportunity to review the data 

that is to be made public with respect to the hospice program prior to such data being 

made public. The Secretary must report quality measures that relate to hospice care 

provided by hospices on the Internet Web site of CMS. 

2. Quality Measures for Hospice Quality Reporting Program for Payment Year FY

2014

a. Considerations in the Selection of the Proposed Quality Measures

In implementing these quality reporting programs, CMS envisions the 

comprehensive availability and widespread use of health care quality information for 

informed decision making and quality improvement. We seek to collect data in a manner 
65

that balances the need for information related to the full spectrum of quality performance

and the need to minimize the burden of data collection and reporting. Our purpose is to 

help achieve better health care and improve health through the widespread dissemination 

and use of performance information. We seek to efficiently collect data using valid, 

reliable and relevant measures of quality and to share the information with organizations 

that use such performance information as well as with the public. 

We also seek to align new Affordable Care Act reporting requirements with 

current HHS high priority conditions, topics and National Quality Strategy (NQS) goals 

and to ultimately provide a comprehensive assessment of the quality of health care 

delivered. The hospice quality reporting program will align with the HHS National 

Quality Strategy, particularly with the goals of ensuring person and family centered care 

and promoting effective communication and coordination of care. One fundamental 

element of hospice care is adherence to patient choice regarding such issues as desired 

level of treatment and location of care provision. This closely aligns with the HHS NQS 

goal of ensuring person and family centered care. Another fundamental element of 

hospice care is the use of a closely coordinated interdisciplinary team to provide the 

desired care. This characteristic is closely aligned with the goal of promoting effective 

communication and coordination of care. Patient/family preferences and coordination of 

care will be foci of future hospice quality measure selection. Arriving at such a 

comprehensive set of quality measures that reflect high priority conditions and goals of 

the HHS NQS will be a multi-year effort.

Other considerations in selecting measures include: alignment with other 

Medicare and Medicaid quality reporting programs as well as other private sector 
66

initiatives; suggestions and input received on measures including, for example, those 

received during the Listening Session on the Hospice Quality Reporting Program held on 

November 15, 2010; seeking measures that have a low probability of causing unintended 

adverse consequences; and considering measures that are feasible (that is, measures that 

can be technically implemented within the capacity of the CMS infrastructure for data 

collection, analyses, and calculation of reporting and performance rates as applicable). 

We also considered the burden to hospices when selecting measures to propose. We 

considered the January 18, 2011 Executive Order entitled ―Improving Regulation and 

Regulatory Review‖ (E.O. 13563), which instructs federal agencies to consider 

regulatory approaches that reduce burdens and maintain flexibility and freedom of choice 

for the public. 

In our search for measures appropriate for the first year of the Hospice Quality 

Reporting Program, we considered the results of our environmental scan, literature 

search, technical expert panel and stakeholder listening sessions that detailed measures 

developed by multiple stewards. Of particular interest were measures from the National 

Hospice and Palliative Care Organization (NHPCO), the PEACE Project conducted by 

The Carolinas Center for Medical Excellence 2006-2008 and the AIM Project conducted 

by the New York QIO, IPRO 2009-2010. Measures from these three sources can be 

viewed at the following Web sites: 

http://www.nhpco.org/files/public/Statistics_Research/NHPCO_research_flier.pdf

http://www.thecarolinascenter.org/default.aspx?pageid=46 and

http://www.ipro.org/index/cms-filesystem-action/hospice/1_6.pdf

We are investigating expanding our proposed measures to adopt some of these 
67

measures in the future. However, evaluation of these measures revealed unique 

measurement concerns for hospice services generally. Two major issues were identified. 

First, all of the measures currently available for use in measuring hospice quality of care 

are retrospective and have to be collected using a chart abstraction approach. This 

creates a burden for hospice providers. Secondly, there is no standardized vehicle for 

data collection or centralized structure for hospice quality reporting. We believe these 

issues limit our options for measure reporting in the first year of the Hospice Quality 

Reporting Program. Our plans to require additional measure reporting are described 

below under section 4. Additional Measures Under Consideration.

We considered measures currently endorsed by NQF that are applicable to 

hospice care. Of the nine measures listed by NQF as applicable to end of life care, seven 

address patients who specifically died of cancer and various situations experienced by 

those patients in their last days of life regardless of whether they were cared for by a 

hospice. These seven measures do not address the provision of hospice care or the 

breadth of the hospice patient population. The remaining two NQF endorsed hospicerelated measures address measurement of the quality of care actually provided by 

hospices. One of the two hospice appropriate measures relates to pain control and is 

discussed below under section b. The other hospice appropriate measure, #0208: 

Percentage of family members of all patients enrolled in a hospice program who give 

satisfactory answers to the survey instrument requires the hospice to administer the

Family Evaluation of Hospice Care (FEHC) survey to families of deceased hospice 

patients. The FEHC survey itself contains 54 questions to be returned to the hospice and 

analyzed/scored in order to produce a rating for the measure. Though the FEHC survey 
68

is available to all hospices, we are unable to determine the number of hospices that 

currently use this survey or the number that analyze the responses to determine scoring 

for this NQF endorsed measure. We believe that the efforts required for hospices to set 

up systems to utilize and analyze this survey tool can be burdensome for some hospices,

and that the timeframe required to put the survey administration and evaluation process in 

place is insufficient. Therefore, while we do not propose to use this measure as a 

requirement for the FY 2014 payment update, this measure may be included in future 

quality reporting requirements because, should the level of burden prove to be acceptable, 

the family evaluation of hospice care is an important perspective on hospice quality. We 

are not aware of any other measures applicable to hospice care that have been endorsed 

or adopted by a consensus organization other than the NQF.

The current hospice Conditions of Participation (CoPs) at 42 CFR section 418.58 

require that hospices develop, implement, and maintain an effective, ongoing, hospicewide data-driven quality assessment and performance improvement (QAPI) program and 

that the hospice maintain documentary evidence of its quality assessment and 

performance improvement program and be able to demonstrate its operation to CMS. In 

addition, hospices must measure, analyze, and track quality indicators, including adverse 

patient events, and other aspects of performance that enable the hospice to assess

processes of care, hospice services, and operations as part of their QAPI Program. 

Hospices have been required to have QAPI programs in place since December 

2008 in order to comply with the CoPs. As a part of the QAPI regulations, since 

February 2, 2009, hospices have been required to develop, implement, and evaluate 

performance improvement projects. The regulations require that
69

(1) The number and scope of distinct performance improvement projects 

conducted annually, based on the needs of the hospice‘s population and internal

organizational needs, reflect the scope, complexity, and past performance of the 

hospice‘s services and operations; and

(2) The hospice document what performance improvement projects are being 

conducted, the reasons for conducting these projects, and the measurable progress 

achieved on these projects.

b. Proposed Quality Measures for the Quality Reporting Program for Hospices

Proposed Quality Measures

To meet the quality reporting requirements for hospices for the FY 2014 payment 

determination as set forth in Section 1814(i)(5) of the Act, we propose that hospices 

report the NQF-endorsed measure that is related to pain management, NQF # 0209: The 

percentage of patients who were uncomfortable because of pain on admission to hospice 

whose pain was brought under control within 48 hours. A primary goal of hospice care is 

to enable patients to be comfortable and free of pain, so that they may live each day as 

fully as possible. The provision of pain control to hospice patients is an essential 

function, a fundamental element of hospice care and therefore we believe the pain control 

measure, NQF #0209 is an important and appropriate measure for the hospice quality 

reporting program. 

Additionally, to meet the quality reporting requirements for hospices for the FY 

2014 payment determination as set forth in Section 1814(i)(5) of the Act, we propose that 

hospices also report one structural measure that is not endorsed by NQF. Structural 

measures assess the characteristics and capacity of the provider to deliver quality health 
70

care. The proposed structural measure is: Participation in a Quality Assessment and 

Performance Improvement (QAPI) Program that Includes at Least Three Quality 

Indicators Related to Patient Care. We believe that participation in QAPI programs that 

address at least three indicators related to patient care reflects a commitment not only to 

assessing the quality of care provided to patients but also to identifying opportunities for 

improvement that pertain to the care of patients. Examples of domains of indicators 

related to patient care include providing care in accordance with documented patient and 

family goals, effective and timely symptom management, care coordination, and patient 

safety. 

Section 1814(i)(5)(D)(ii) provides that ―[i]n the case of a specified area or 

medical topic determined appropriate by the Secretary for which a feasible measure has 

not been endorsed by an entity with a contract under section 1890(a), the Secretary may 

specify a measure that is not so endorsed as long as due consideration is given to 

measures that have been endorsed or adopted by a consensus organization identified by 

the Secretary.‖ We have proposed to adopt this structural measure because we believe it 

is appropriate for use in evaluating the quality of care provided by hospices. As 

discussed above, a majority of the NQF-endorsed measures that relate to end of life care 

are not hospice-specific or, in the case of the FEHC survey instrument, that measure is 

too burdensome for hospices to implement for the FY 2014 payment determination. We 

are also not aware of any other measures applicable to the hospice setting that have been 

adopted by another consensus organization. Accordingly, we propose to adopt the 

structural measure under the authority in section 1814(i)(5)(D)(ii). 

We propose that each hospice submit data on the proposed structural measure,
71

including the description of each of their patient-care focused quality indicators (if 

applicable) to CMS by January 31, 2013 on a spreadsheet template to be prepared by 

CMS. Specifically, hospice programs would be required to report whether or not they 

have a QAPI program that addresses at least three indicators related to patient care. In 

addition, hospices would be required to list all of their patient care indicators. Hospice 

programs will be evaluated for purposes of the quality reporting program based on 

whether or not they respond, not on how they respond. 

In addition, we propose a voluntary submission of the proposed structural 

measure (not for purposes of a payment determination or public reporting), including the 

description of each of their patient-care focused quality indicators to CMS by January 31, 

2012 on a spreadsheet template to be prepared by CMS. Voluntary reporting of the 

structural measure data with specific quality indicators related to patient care to CMS will 

allow us to learn what the important patient care quality issues are for hospices and 

serves to provide useful information in the design and structure of the quality reporting 

program. Our intent is to require additional standardized and specific quality measures to

be reported by hospices in subsequent years. We solicit comment on the measures 

proposed.

The proposed collection and submission of data on the proposed NQF-endorsed

measure will be a new requirement for hospices. However, since the development, 

implementation and maintenance of an effective, ongoing, hospice-wide data driven 

quality assessment and performance improvement program have been requirements in the 

Medicare CoPs since 2008, we do not believe that the collection of the proposed 

structural measure on QAPI indicators would be considered new work. There are 
72

numerous data collection tools and quality indicators that are available to hospices 

through hospice industry associations and private companies. In addition to these 

options, hospices may choose to use the CMS-sponsored Hospice Assessment 

Intervention and Measurement (AIM) Project data elements, data dictionary, data 

collection tool, and quality indicator formulas that are freely available to all hospices, 

found at http://www.ipro.org/index/hospice-aim. 

We invite comment on the proposed quality measurement approach including 

whether there are other quality measures currently available which may be appropriate 

and advisable for the hospice quality reporting program starting in FY2014. We will

review and carefully consider the comments that we receive on the proposed measures 

for the first hospice quality reporting cycle as we prepare the final rule. We propose that 

hospices report the structural measure by January 2013 and the NQF measure #0209 by 

April 2013 in order to be used in the fiscal year 2014 payment determination. In 

addition, we propose that hospices voluntarily report the structural measure by January 

2012 for purposes of program development and design. It is important to note that the 

Affordable Care Act allows the Secretary until October 1, 2012 to publish the measures 

required to meet the FY 2014 reporting requirement. As such, we have the opportunity to 

also consider commenters suggestions associated with this proposed rule in FY 2013 

hospice rulemaking. 

c. Proposed Timeline for Data Collection under the Quality Reporting Program for 

Hospices

To meet the quality reporting requirements for hospices for the FY 2014 payment 

determination as set forth in Section 1814(i)(5) of the Act, we propose that the first
73

hospice quality reporting cycle for the proposed NQF-endorsed measure and the

proposed structural measure will consist of data collected from October 1, 2012 through 

December 31, 2012. This timeframe will permit us to determine whether each hospice is 

eligible to receive the full market basket update for FY 2014 based on a full quarter of 

data. This also provides sufficient time after the end of the data collection period to 

accurately determine each hospice‘s market basket update for FY 2014. We propose that 

all subsequent hospice quality reporting cycles would be based on the calendar-year basis 

(e.g., January 1, 2013 through December 31, 2013 for determination of the hospice 

market basket update for each hospice in FY 2015, etc.). We welcome comments on the 

proposed reporting cycle for the hospice quality reporting program. 

To voluntarily submit the structural measure, we propose that the hospice 

voluntary quality reporting cycle will consist of data collected from October 1, 2011

through December 31, 2011. This timeframe will permit us to analyze the data to learn 

what the important patient care quality issues are for hospices as we enhance the quality 

reporting program design to require more standardized and specific quality measures to

be reported by hospices in subsequent years.
74

d. Data Submission Requirements:

We generally propose that hospices submit data in the fiscal year prior to the 

payment determination. For the fiscal year 2014 payment determination, we propose that 

hospices submit data for the proposed NQF-endorsed measure based on the measure 

specifications for that measure, which can be found at www.qualityforum.org, no later 

than April 1, 2013. Data submission for the structural measure would include the 

hospices‘ report of whether they have a QAPI program that addresses at least three 

indicators related to patient care, and, if so, the subject matter of all of their patient care 

indicators for the period October 1, 2012 through December 31, 2012. Submission of 

these reports would be required by January 31, 2013.

We propose that both measures‘ data be submitted to CMS on a spreadsheet 

template to be prepared by CMS. We will announce operational details with respect to 

the data submission methods and format for the hospice quality data reporting program 

using this CMS Web site http://www.cms.gov/LTCH-IRF-Hospice-Quality-Reporting

by no later than December 31, 2011 should these measures be finalized. 

For the voluntary submission, we propose that hospices submit data for the 

proposed structural measure based on the spreadsheet template to be prepared by CMS, 

no later than January 31, 2012. Voluntary data submission for the structural measure 

would include the hospices‘ report of whether they have a QAPI program that addresses 

at least three indicators related to patient care, and, if so, the subject matter of all of their 

patient care indicators for the period October 1, 2011 through December 31, 2011. 

Submission of these reports would be required by January 31, 2012.

3. Public Availability of Data Submitted
75

Under section 1814(i)(5)(E)of the Act, the Secretary is required to establish 

procedures for making any quality data submitted by hospices available to the public. 

Such procedures will ensure that a hospice will have the opportunity to review the data 

regarding the hospice‘s respective program before it is made public. Also, under section 

1814(i)(5)(E) of the Act, the Secretary is authorized to report quality measures that relate 

to services furnished by a hospice on the CMS internet Web site. At the time of the 

publication of this proposed rule, no date has been set for public reporting of data. We 

recognize that public reporting of quality data is a vital component of a robust quality 

reporting program and are fully committed to developing the necessary systems for 

public reporting of hospice quality data.

4. Additional Measures Under Consideration.

As described above, we are considering expanding the proposed measures to 

include measures from the National Hospice and Palliative Care Organization (NHPCO), 

the PEACE Project and the AIM Project. While in this first year, we propose to build a 

foundation for quality reporting by requiring hospices to report one NQF endorsed 

measure and one structural measure, we seek to achieve a comprehensive set of quality 

measures to be available for widespread use for informed decision making and quality 

improvement. We expect to explore and expand the measures in various ways. Future 

topics under consideration for quality data reporting include patient safety, effective 

symptom management, patient and family experience of care, and alignment of care with 

patient preferences. For quality data reporting in FY2014 or FY2015, we are also 

particularly interested in the development of new measures related to these topics and in 

the further development of existing measures that can be found on the following web 
76

sites :

http://www.nhpco.org/files/public/Statistics_Research/NHPCO_research_flier.pdf

http://www.thecarolinascenter.org/default.aspx?pageid=46 and

http://www.ipro.org/index/cms-filesystem-action/hospice/1_6.pdf

We welcome comments on whether all, some, any, or none of these measures should be 

considered for future rulemaking. We also solicit comments on ways which CMS can 

adopt these measures in a standardized way that is not overly burdensome to hospice 

providers and reflects hospice patient input.

To support the standardized collection and calculation of quality measures 

specifically focused on hospice services, we believe the required data elements would 

potentially require a standardized assessment instrument. 

CMS has developed an assessment instrument for the ―Post-Acute Care Payment 

Reform Demonstration Program,‖ as required by section 5008 of the 2005 Deficit 

Reduction Act (DRA). This is a standardized assessment instrument that could be used 

across all post-acute care sites to measure functional status and other factors during 

treatment and at discharge from each provider and to test the usefulness of this 

standardized assessment instrument (now referred to as the Continuity Assessment 

Record & Evaluation, CARE). We believe such an assessment instrument would be 

beneficial in supporting the submission of data on quality measures by requiring 

standardized data with regard to hospice patients, similar to the current MDS 3.0 and 

OASIS-C that support a variety of quality measures for nursing homes and home health 

agencies, respectively. The CARE data set used by hospices would require editing to 
77

address the unique and specific assessment needs of the hospice patient population. We 

invite comments on the implementation of a standardized assessment instrument for 

hospices that would similarly support the calculation of quality measures. 

We invite public comment on considering modifications to the CARE data set to 

capture information specifically relevant to measuring the quality of care and services 

delivered by hospices such as patient/family preferences and the degree to which those 

preferences were met for care delivery, symptom management, spiritual needs and other 

aspects of care pertinent to the hospice patient population. The current version of the 

CARE data set can be found at www.pacdemo.rti.org.

Finally, we are also soliciting comments on ways which CMS can expand the 

structural reporting measure to also include hospice performance on each QAPI indicator 

reported in the performance period. 

IV. Updates on Issues Not Proposed for Rulemaking for FY 2012 Rulemaking

A. Update on Hospice Payment Reform and Value Based Purchasing

Section 3132 of the Affordable Care Act of 2010 Pub. L. 111-148) authorized 

the Secretary to collect additional data and information determined appropriate to revise 

payments for hospice care and for other purposes. The types of data and information 

described in the Affordable Care Act attempt to capture resource utilization, which can be 

collected on claims, cost reports, and possibly other mechanisms as we determine to be 

appropriate. The data collected would be used to revise hospice payment methodology or 

routine home care rates in a budget-neutral manner no earlier than October 1, 2013. In 

order to determine the revised hospice payment methodology and types of data to be 

collected, we will consult with hospice programs and the Medicare Payment Advisory 
78

Commission (MedPAC). 

According to MedPAC‘s March 2011 ―Report to Congress: Medicare Payment 

Policy‖ (available at http://www.medpac.gov/chapters/Mar10_Ch02E.pdf), Medicare 

expenditures for hospice services exceeded $12 billion in 2009 and the aggregate 

Medicare margin in 2008 was 5.1 percent. In addition, MedPAC found a 50 percent 

growth in the number of hospices from 2000 to 2009, of which a majority were for-profit 

hospices. The growth in Medicare expenditures, margins, and number of new hospices 

raises concern that the current hospice payment methodology may have created 

unintended incentives. Over the past several years, MedPAC, the Government 

Accounting Office (GAO), and the Office of Inspector General (OIG) all recommended 

that CMS collect more comprehensive data in order to better assess the utilization of the 

Medicare hospice benefit. MedPAC has also suggested an alternative payment model 

that they believe will address the vulnerabilities in the current payment system. 

We are in the early stages of reform analysis. We have conducted a literature 

review, are in the process of conducting initial data analysis, and our contractor will 

convene a technical advisory panel in the spring of 2011. We are also working in 

collaboration with the Assistant Secretary of Planning and Evaluation to develop analysis 

that may be used to inform the technical advisory panel discussions. We hope to share 

the study design in future rulemaking to solicit public comments on the hospice payment 

reform methodology. 

Section 10326 of the Affordable Care Act directs the Secretary to conduct a pilot 

program to test a value-based purchasing program for hospices no later than January 1, 

2016. As described in Section III E. Quality Reporting for Hospices above, in this rule 
79

we have proposed two measures for hospices to report to CMS no later than January 31,

2013. We believe that these measures are a quality reporting foundation upon which 

CMS will expand. Over the course of the next few years, no later than beginning in FY 

2015, CMS will require hospices to report an expanded and comprehensive set of quality 

measures from which CMS can select for pilot testing a value-based purchasing program. 

During the FY 2013, FY 2014 and FY 2015 hospice rulemaking, CMS plans to iteratively 

implement the expanded measures, and solicit industry comments regarding analysis and 

design options for a hospice value-based purchasing pilot which would improve the 

quality of care while reducing spending. We will also consult with stakeholders in 

developing the implementation plan, as well as considering the outcomes of any recent 

demonstration projects related to value-based purchasing which we believe might be 

relevant to the hospice setting. We will provide further information on the progress of 

our efforts in future rulemaking.

B. Update on the Redesigned Provider Statistical & Reimbursement Report

(PS&R)

In our FY 2011 Hospice Wage Index Notice with Comment Period, we solicited 

comments on a redesigned PS&R system, which would allow hospices easy access to 

national hospice utilization data on their Medicare hospice beneficiaries. As described in 

section II of this proposed rule, some commenters were supportive of the idea, and said 

they needed access to each beneficiary‘s full utilization history to better manage their 

caps and to meet the new face-to-face requirements. 

We are moving forward with this project, and expect the redesigned PS&R 

system to be able to provide complete utilization data needed for calculating hospice 
80

caps. We believe that the redesigned PS&R system will provide hospices with a greater 

ability to monitor their caps by providing readily accessible information on beneficiary 

utilization. We expect it to be available to hospices before year‘s end. We encourage all 

hospices to become familiar with the redesigned PS&R and to use the information it will 

make available in managing their respective caps. In the future, we may consider 

requiring hospices to self-report their caps, using PS&R data.

V. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to provide 60-day 

notice in the Federal Register and solicit public comment before a collection of 

information requirement is submitted to the Office of Management and Budget (OMB) 

for review and approval. In order to fairly evaluate whether an information collection 

should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 

1995 requires that we solicit comment on the following issues:

The need for the information collection and its usefulness in carrying out the 

proper functions of our agency.

The accuracy of our estimate of the information collection burden. 

The quality, utility, and clarity of the information to be collected.

Recommendations to minimize the information collection burden on the affected 

public, including automated collection techniques.

We are soliciting public comment on each of these issues in this proposed rule.

Proposed Quality Measures for the Quality Reporting Program for Hospices

Section 1814(i)(5)(C) of the Social Security Act requires that each hospice must 
81

submit data to the Secretary on quality measures specified by the Secretary. Such data 

must be submitted in a form and manner, and at a time specified by the Secretary. Under 

section 1814(i)(5)(D)(iii) of the Act, the Secretary must not later than October 1, 2012 

publish selected measures that will be applicable with respect to FY 2014.

In implementing the Hospice quality reporting program, CMS seeks to collect 

measure information with as little burden to the providers as possible and which reflects 

the full spectrum of quality performance. Our purpose in collecting this data is to help 

achieve better health care and improve health through the widespread dissemination and 

use of performance information. 

A. Structural Measure: Participation in a Quality Assessment Performance Improvement 

Program that Includes at Least Three Indicators Related to Patient Care

Consistent with this proposed rule, hospices will voluntarily report to CMS by 

January 31, 2012 their participation in a QAPI program that includes the hospices‘ report 

of whether they have a QAPI program that addresses at least three indicators related to 

patient care, and if so, the subject matter of all of their patient care indicators during the 

time frame October 1 through December 31, 2011. Data submitted for the last quarter of 

calendar year 2011 shall be voluntary on the part of hospice providers and shall not 

impact their fiscal year 2014 payment determination.

The information that hospices will be required to report, in both the voluntary and 

mandatory phases of reporting, consists of stating whether or not they participate in a 

QAPI program that includes at least three indicators related to patient care and if so, the 

subject matter of all of their patient care indicators. Expectations of the QAPI programs 

are set forth in the Hospice Conditions of Participation (CoPs) at 42 CFR 418.58(a) 
82

through 418.58(e). These conditions of participation require that hospices must develop, 

implement, and maintain an effective, ongoing, hospice-wide, data-driven QAPI program 

and that the hospice must maintain documentary evidence of its QAPI programs. 

Hospices have been required to meet all of the standards set forth in 42 CFR 418.58(a) 

through 418.58(e) as a condition of participation in the Medicare and Medicaid programs 

since 2008. Therefore, the identification of quality indicators related to patient care, will 

not be considered new or additional work.

Under the proposed quality reporting program, hospices will voluntarily report to 

CMS by no later than January 31, 2012, data that would include whether they have a

QAPI program that addresses at least three indicators related to patient care, and if so, the 

subject matter of all of their patient care indicators during the time frame via a CMSprepared spreadsheet template. CMS anticipates that this reporting will take no more

than 15 minutes of time to prepare the structural measure report.

Thereafter, each of the 3,531 hospices in the United States will be required to 

submit this structural measure information to CMS one time per year. CMS estimates

that it will take approximately 15 minutes to prepare and complete the submission of this 

structural measure report. Therefore, the estimated number of hours spent by all hospices 

in the U.S. preparing and submitting such data totals 883 hours. CMS believes that the 

compilation and transmission of the data can be completed by data entry personnel. We 

have estimated a total cost impact of $18,163 to all hospices for the implementation of 

the hospice structural measure quality reporting program, based on 883 total hours for a 

billing clerk at $20.57/hour (which includes 30 percent overhead and fringe benefits, 

using most recent BLS wage data). We have developed an information collection request 
83

for OMB review and approval. 

B. NQF measure #0209: Percentage of patients who were uncomfortable because of 

pain on admission to hospice whose pain was brought under control within 48 hours

At this time, CMS has not completed development of the information collection 

instrument that Hospices would have to submit in order to comply with the NQF measure 

#0209 reporting requirements as discussed earlier in this proposed rule. Because the 

instrument for the reporting of this measure is still under development, we cannot assign 

a complete burden estimate at this time. Once the instrument is available, we will publish 

the required 60-day and 30-day Federal Register notices to solicit public comments on 

the data submission form and to announce the submission of the information collection 

request to OMB for its review and approval. The data collection of the NQF measure 

#0209 for the fiscal year 2014 payment determination is for the time period from October 

1, 2012 to December 31, 2012.

If you comment on these information collection and recordkeeping requirements, 

please do either of the following:

1. Submit your comments electronically as specified in the ADDRESSES section 

of this proposed rule; or 

2. Submit your comments to the Office of Information and Regulatory Affairs, 

Office of Management and Budget,

Attention: CMS Desk Officer, CMS-1355-P

Fax: (202) 395-6974; or 

Email: OIRA_submission@omb.eop.gov
84

VI. Response to Comments

Because of the large number of public comments we normally receive on Federal 

Register documents, we are not able to acknowledge or respond to them individually. 

We will consider all comments we receive by the date and time specified in the "DATES" 

section of this preamble, and, when we proceed with a subsequent document, we will 

respond to the comments in the preamble to that document.

VII. Economic Analyses

A. Regulatory Impact Analysis

1. Introduction

We have examined the impacts of this proposed rule as required by Executive 

Order 12866 (September 30, 1993, Regulatory Planning and Review), Executive Order 

13563 on Improving Regulation and Regulatory Review (January 18, 2011), the 

Regulatory Flexibility Act (September 19, 1980; Pub. L. 96-354) (RFA), section 

1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 

1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 

4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits 

of available regulatory alternatives and, if regulation is necessary, to select regulatory 

approaches that maximize net benefits (including potential economic, environmental, 

public health and safety effects, distributive impacts, and equity). Executive Order 13563 

emphasizes the importance of quantifying both costs and benefits, of reducing costs, of 

harmonizing rules, and of promoting flexibility. This rule has not been designated an 

"economically" significant rule, under section 3(f)(1) of Executive Order 12866. 
85

However, we have voluntarily prepared a Regulatory Impact Analysis that to the best of 

our ability presents the costs and benefits of this proposed rule.

2. Statement of Need

This proposed rule follows §418.306(c) which requires annual publication, in the 

Federal Register, of the hospice wage index based on the most current available CMS 

hospital wage data, including any changes to the definitions of Metropolitan Statistical 

Areas (MSAs). Also, it implements Section 3004 of the Affordable Care Act of 2010, 

which directs the Secretary to specify quality measures for the hospice program. Lastly, 

this proposed rule includes proposed changes to the aggregate cap calculation, to 

requirements related to physicians who perform face-to-face encounters, and offers 

several clarifying technical corrections. 

3. Overall Impacts 

The overall impact of this proposed rule is an estimated net decrease in Federal 

payments to hospices of $80 million for fiscal year 2012. We estimated the impact on 

hospices, as a result of the changes to the FY 2012 hospice wage index and of reducing 

the BNAF by an additional 15 percent, for a total BNAF reduction of 40 percent (10 

percent in FY 2010, 15 percent in FY 2011, and 15 percent in FY 2012). The BNAF 

reduction is part of a 7-year BNAF phase-out that was finalized in previous rulemaking 

(74 FR 39384 (August 6, 2009)), and is not a policy change.

As discussed previously, the methodology for computing the hospice wage index 

was determined through a negotiated rulemaking committee and promulgated in the 

August 8, 1997 hospice wage index final rule (62 FR 42860). The BNAF, which was 

promulgated in the August 8, 1997 rule, is being phased out. This rule updates the 
86

hospice wage index in accordance with the 2010 Hospice Wage Index final rule, which 

finalized a 10 percent reduced BNAF for FY 2010 as the first year of a 7-year phase-out 

of the BNAF, to be followed by an additional 15 percent per year reduction in the BNAF 

in each of the next 6 years. Total phase-out will be complete by FY 2016.

4. Detailed Economic Analysis

Column 4 of Table 1 shows the combined effects of the updated wage data (the 

2011 pre-floor, pre-reclassified hospital wage index) and of the additional 15 percent 

reduction in the BNAF (for a total BNAF reduction of 40 percent), comparing estimated 

payments for FY 2012 to estimated payments for FY 2011. The FY 2011 payments used 

for comparison have a 25 percent reduced BNAF applied. We estimate that the total 

hospice payments for FY 2012 will decrease by $80 million as a result of the application 

of the updated wage data ($+10 million) and the total 40 percent reduction in the BNAF 

($-90 million). This estimate does not take into account any inpatient hospital market 

basket update, which is estimated to be 2.8 percent for FY 2012. This estimated 2.8

percent does not reflect the provision in the Affordable Care Act which reduces the 

inpatient hospital market basket update for FY 2012 by 0.1 percentage point, since that 

reduction does not apply to hospices. The final inpatient hospital market basket update 

and associated payment rates will be communicated through an administrative instruction

in the summer. The effect of an estimated 2.8 percent inpatient hospital market basket 

update on payments to hospices is approximately $390 million. Taking into account an 

estimated 2.8 percent inpatient hospital market basket update (+$390 million), in addition 

to the updated wage data ($+10 million) and the total 40 percent reduction in the BNAF 

($-90 million), it is estimated that hospice payments would increase by $310 million in 
87

FY 2012 ($390 million + $10 million -$90 million = $310 million). The percent change 

in payments to hospices due to the combined effects of the updated wage data, the 

additional 15 percent reduction in the BNAF (for a total BNAF reduction of 40 percent), 

and the inpatient hospital market basket update of 2.8 percent is reflected in column 5 of 

the impact table (Table 1).

a. Effects on Hospices 

This section discusses the impact of the projected effects of the hospice wage 

index, including the effects of an estimated 2.8 percent inpatient hospital market basket 

update for FY 2012 that will be communicated separately through an administrative 

instruction. This proposed rule continues to use the CBSA-based pre-floor,

pre-reclassified hospital wage index as a basis for the hospice wage index and continues 

to use the same policies for treatment of areas (rural and urban) without hospital wage 

data. The proposed FY 2012 hospice wage index is based upon the 2011 pre-floor, prereclassified hospital wage index and the most complete claims data available (FY 2009) 

with an additional 15 percent reduction in the BNAF (combined with the 10 percent 

reduction in the BNAF taken in FY 2010, and the additional 15 percent taken in 2011, for 

a total BNAF reduction of 40 percent in FY 2012). The BNAF reduction is part of a 7-

year BNAF phase-out that was finalized in previous rulemaking, and would not be a 

policy change.

For the purposes of our impacts, our baseline is estimated FY 2011 payments with 

a 25 percent BNAF reduction, using the 2010 pre-floor, pre-reclassified hospital wage 

index. Our first comparison (column 3, Table 1) compares our baseline to estimated FY 

2012 payments (holding payment rates constant) using the updated wage data (2011 pre-
88

floor, pre-reclassified hospital wage index). Consequently, the estimated effects 

illustrated in column 3 of Table 1 show the distributional effects of the updated wage data 

only. The effects of using the updated wage data combined with the additional 15 

percent reduction in the BNAF are illustrated in column 4 of Table 1.

We have included a comparison of the combined effects of the additional 15 

percent BNAF reduction, the updated wage data, and an estimated 2.8 percent inpatient 

hospital market basket update for FY 2012 (Table 1, column 5). Presenting these data 

gives the hospice industry a more complete picture of the effects on their total revenue of 

the hospice wage index discussed in this proposed rule, the BNAF phase-out, and the 

estimated FY 2012 inpatient hospital market basket update. Certain events may limit the 

scope or accuracy of our impact analysis, because such an analysis is susceptible to 

forecasting errors due to other changes in the forecasted impact time period. The nature 

of the Medicare program is such that the changes may interact, and the complexity of the 

interaction of these changes could make it difficult to predict accurately the full scope of 

the impact upon hospices.
89

TABLE 1. Anticipated Impact on Medicare Hospice Payments of Updating the Prefloor, Pre-Reclassified Hospital Wage Index Data, Reducing the Budget Neutrality 

Adjustment Factor (BNAF) by an Additional 15 Percent (for a Total BNAF 

Reduction of 40 Percent) and Applying an Estimated 2.8 Percent† Inpatient 

Hospital Market Basket Update to the FY 2012 Hospice Wage Index, Compared to 

the FY 2011 Hospice Wage Index with a 25 Percent BNAF Reduction

Number 

of 

Hospices 

(1)

Number of 

Routine 

Home Care 

Days in 

Thousands 

(2)

Percent 

Change in 

Hospice 

Payments 

due to 

FY2012 

Wage 

Index 

Change 

(3)

Percent 

Change in 

Hospice 

Payments due 

to Wage Index 

Change, and

additional 15% 

Reduction in 

BNAF

(4)

Percent 

Change in 

Hospice 

Payments due 

to Wage Index 

Change, 

additional 15% 

Reduction in 

BNAF, and 

Market Basket 

Update

(5)

ALL HOSPICES 3,440 74,900 0.1% (0.5%) 2.3%

URBAN HOSPICES 2,388 64,816 0.1% (0.5%) 2.3%

RURAL HOSPICES 1,052 10,084 (0.2%) (0.6%) 2.2%

BY REGION – URBAN:

NEW ENGLAND 133 2,425 (0.7%) (1.3%) 1.5%

MIDDLE ATLANTIC 239 7,131 (0.3%) (0.9%) 1.9%

SOUTH ATLANTIC 347 14,247 0.3% (0.3%) 2.5%

EAST NORTH CENTRAL 328 9,191 0.2% (0.4%) 2.4%

EAST SOUTH CENTRAL 177 4,420 (0.1%) (0.6%) 2.2%

WEST NORTH CENTRAL 180 4,280 (0.3%) (0.8%) 1.9%

WEST SOUTH CENTRAL 461 8,657 0.1% (0.4%) 2.4%

MOUNTAIN 222 5,633 (0.0%) (0.6%) 2.2%

PACIFIC 264 7,606 0.6% (0.0%) 2.8%

OUTLYING 37 1,227 (0.4%) (0.4%) 2.4%

BY REGION – RURAL:

NEW ENGLAND 26 193 (0.1%) (0.6%) 2.1%

MIDDLE ATLANTIC 45 517 0.4% (0.2%) 2.6%

SOUTH ATLANTIC 136 2,106 (0.7%) (1.1%) 1.6%

EAST NORTH CENTRAL 147 1,706 (0.6%) (1.1%) 1.6%
90

EAST SOUTH CENTRAL 153 1,958 0.1% (0.1%) 2.7%

WEST NORTH CENTRAL 194 1,085 (0.5%) (0.9%) 1.9%

WEST SOUTH CENTRAL 189 1,498 0.8% 0.4% 3.2%

MOUNTAIN 109 585 0.3% (0.1%) 2.7%

PACIFIC 52 428 (0.7%) (1.3%) 1.5%

OUTLYING 1 10 0.0% 0.0% 2.8%

ROUTINE HOME CARE DAYS:

0- 3499 DAYS (small) 621 1,077 (0.1%) (0.6%) 2.2%

3500–19,999 DAYS

 (medium) 1716 17,231 (0.1%) (0.6%) 2.2%

20,000+ DAYS (large) 1103 56,591 0.1% (0.5%) 2.3%

TYPE OF OWNERSHIP:

VOLUNTARY 1172 29,742 0.0% (0.5%) 2.3%

PROPRIETARY 1796 38,047 0.1% (0.4%) 2.4%

GOVERNMENT 472 7,111 (0.1%) (0.7%) 2.1%

HOSPICE BASE:

FREESTANDING 2340 58,510 0.1% (0.5%) 2.3%

HOME HEALTH AGENCY 555 9,922 0.1% (0.5%) 2.3%

HOSPITAL 526 6,272 (0.0%) (0.6%) 2.2%

SKILLED NURSING 

FACILITY 19 196 0.2% (0.4%) 2.4%

BNAF = Budget Neutrality Adjustment Factor

Comparison is to FY 2011 data with a 25 percent BNAF reduction.

*OSCAR data as of January 6, 2011 for hospices with claims filed in FY 2009

**In previous years, there was also a category labeled ―Other‖; these were Other 

Government hospices, and have been combined with the ―Government‖ category.

†The estimated 2.8 percent inpatient hospital market basket update for FY 2012 does not 

reflect the provision in the Affordable Care Act which reduces the inpatient hospital 

market basket update by 0.1 percentage point since that reduction does not apply to 

hospices. 

REGION KEY: 

New England=Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island,

Vermont; Middle Atlantic=Pennsylvania, New Jersey, New York; South

Atlantic=Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, 

South Carolina, Virginia, West Virginia; East North Central=Illinois, Indiana,

Michigan, Ohio, Wisconsin; East South Central=Alabama, Kentucky, Mississippi, 

Tennessee; West North Central=Iowa, Kansas, Minnesota, Missouri, Nebraska, North 

Dakota, South Dakota; West South Central=Arkansas, Louisiana, Oklahoma, Texas; 

Mountain=Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; 

Pacific=Alaska, California, Hawaii, Oregon, Washington; Outlying=Guam, Puerto Rico, 

Virgin Islands
91

Table 1 shows the results of our analysis. In column 1, we indicate the number of 

hospices included in our analysis as of January 6, 2011 which had also filed claims in FY 

2009. In column 2, we indicate the number of routine home care days that were included 

in our analysis, although the analysis was performed on all types of hospice care. 

Columns 3, 4, and 5 compare FY 2012 estimated payments with those estimated for FY 

2011. The estimated FY 2011 payments incorporate a BNAF which has been reduced by 

25 percent. Column 3 shows the percentage change in estimated Medicare payments for 

FY 2012 due to the effects of the updated wage data only, compared with estimated FY 

2011 payments. The effect of the updated wage data can vary from region to region 

depending on the fluctuations in the wage index values of the pre-floor, pre-reclassified 

hospital wage index. Column 4 shows the percentage change in estimated hospice 

payments from FY 2011 to FY 2012 due to the combined effects of using the updated 

wage data and reducing the BNAF by an additional 15 percent. Column 5 shows the 

percentage change in estimated hospice payments from FY 2011 to FY 2012 due to the 

combined effects of using updated wage data, an additional 15 percent BNAF reduction, 

and an estimated 2.8 percent inpatient hospital market basket update.

Table 1 also categorizes hospices by various geographic and hospice 

characteristics. The first row of data displays the aggregate result of the impact for all 

Medicare-certified hospices. The second and third rows of the table categorize hospices 

according to their geographic location (urban and rural). Our analysis indicated that there 

are 2,388 hospices located in urban areas and 1,052 hospices located in rural areas. The 

next two row groupings in the table indicate the number of hospices by census region, 

also broken down by urban and rural hospices. The next grouping shows the impact on
92

hospices based on the size of the hospice‘s program. We determined that the majority of 

hospice payments are made at the routine home care rate. Therefore, we based the size of 

each individual hospice‘s program on the number of routine home care days provided in 

FY 2009. The next grouping shows the impact on hospices by type of ownership. The 

final grouping shows the impact on hospices defined by whether they are provider-based 

or freestanding. 

As indicated in Table 1, there are 3,440 hospices. Approximately 48 percent of 

Medicare-certified hospices are identified as voluntary (non-profit) or government 

agencies. Because the National Hospice and Palliative Care Organization estimates that 

approximately 83 percent of hospice patients in 2009 were Medicare beneficiaries, we 

have not considered other sources of revenue in this analysis. 

As stated previously, the following discussions are limited to demonstrating 

trends rather than projected dollars. We used the pre-floor, pre-reclassified hospital wage 

indexes as well as the most complete claims data available (FY 2009) in developing the 

impact analysis. The FY 2012 payment rates will be adjusted to reflect the full inpatient 

hospital market basket update, as required by section 1814(i)(1)(C)(ii)(VII) of the Act. 

As previously noted, we publish these rates through administrative instructions rather 

than in a proposed rule. The FY 2012 estimated inpatient hospital market basket update 

is 2.8 percent. This 2.8 percent does not reflect the provision in the Affordable Care Act 

which reduces the inpatient hospital market basket update by 0.1 percentage point since 

that reduction does not apply to hospices. Since the inclusion of the effect of an

inpatient hospital market basket increase provides a more complete picture of projected 

total hospice payments for FY 2012, the last column of Table 1 shows the combined 
93

impacts of the updated wage data, the additional 15 percent BNAF reduction, and the 

estimated 2.8 percent inpatient hospital market basket update. As discussed in the FY 

2006 hospice wage index final rule (70 FR 45129), hospice agencies may use multiple 

hospice wage index values to compute their payments based on potentially different 

geographic locations. Before January 1, 2008, the location of the beneficiary was used to 

determine the CBSA for routine and continuous home care and the location of the 

hospice agency was used to determine the CBSA for respite and general inpatient care. 

Beginning January 1, 2008, the hospice wage index CBSA utilized is based on the 

location of the site of service. As the location of the beneficiary‘s home and the location 

of the facility may vary, there will still be variability in geographic location for an 

individual hospice. We anticipate that the CBSA of the various sites of service will 

usually correspond with the CBSA of the geographic location of the hospice, and thus we 

will continue to use the location of the hospice for our analyses of the impact of the 

changes to the hospice wage index in this rule. For this analysis, we use payments to the 

hospice in the aggregate based on the location of the hospice. 

The impact of hospice wage index changes has been analyzed according to the 

type of hospice, geographic location, type of ownership, hospice base, and size. Our 

analysis shows that most hospices are in urban areas and provide the vast majority of 

routine home care days. Most hospices are medium-sized followed by large hospices. 

Hospices are almost equal in numbers by ownership with 1,644 designated as non-profit 

or government hospices and 1,796 as proprietary. The vast majority of hospices are 

freestanding.

b. Hospice Size
94

Under the Medicare hospice benefit, hospices can provide four different levels of 

care days. The majority of the days provided by a hospice are routine home care (RHC) 

days, representing about 97 percent of the services provided by a hospice. Therefore, the 

number of RHC days can be used as a proxy for the size of the hospice, that is, the more 

days of care provided, the larger the hospice. As discussed in the August 4, 2005 final 

rule, we currently use three size designations to present the impact analyses. The three 

categories are: 1) small agencies having 0 to 3,499 RHC days; 2) medium agencies 

having 3,500 to 19,999 RHC days; and 3) large agencies having 20,000 or more RHC 

days. The FY 2012 updated wage data without any BNAF reduction are anticipated to 

decrease payments to small and medium hospices by 0.1 percent and increase payments 

to large hospices by 0.1 percent (column 3); the updated wage data and the additional 15 

percent BNAF reduction (for a total BNAF reduction of 40 percent) are anticipated to 

decrease estimated payments to small and medium hospices by 0.6 percent, and to large 

hospices by 0.5 percent (column 4); and finally, the updated wage data, the additional 15 

percent BNAF reduction (for a total BNAF reduction of 40 percent), and the estimated 

2.8 percent inpatient hospital market basket update are projected to increase estimated 

payments by 2.2 percent for small and medium hospices, and by 2.3 percent for large

hospices (column 5).

c. Geographic Location 

Column 3 of Table 1 shows updated wage data without the BNAF reduction. 

Urban hospices are anticipated to experience an increase of 0.1 percent, while rural 

hospices will experience a decrease of 0.2 percent. Urban hospices can anticipate a 

decrease in payments in five regions; ranging from 0.7 percent in the New England
95

region to 0.1 percent in the East South Central region. Payments in the Mountain region 

are estimated to stay stable. Urban hospices are anticipated to see an increase in 

payments in four regions; ranging from 0.1 percent in the West South Central region to 

0.6 percent in the Pacific region. 

Column 3 shows estimated percentages for rural hospices. Rural hospices are 

estimated to see a decrease in payments in five regions, ranging from 0.7 percent in the 

South Atlantic and Pacific regions to 0.1 percent in the New England region. Rural 

hospices can anticipate an increase in payments in four regions, ranging from 0.1 percent 

in the East South Central region to 0.8 percent in the West South Central region. There is 

no change in payments for Outlying regions due to FY 2012 Wage Index change.

Column 4 shows the combined effect of the updated wage data and the additional 

15 percent BNAF reduction on estimated payments, as compared to the FY 2011

estimated payments using a BNAF with a 25 percent reduction. Overall urban are 

anticipated to experience a 0.5 percent decrease in payments while rural hospices are 

anticipated to experience a 0.6 percent decrease in payments. Nine regions in urban areas

are estimated to see decreases in payments, ranging from 1.3 percent in the New England 

region to 0.3 percent in the South Atlantic region. Payments for the Pacific region are 

estimated to be relatively stable. 

Rural hospices are estimated to experience a decrease in payments in eight 

regions, ranging from 1.3 percent in the Pacific region to 0.1 percent in the East South 

Central and Mountain regions. While the estimated effect of the additional 15 percent 

BNAF reduction decreased payments to rural hospices in the West South Central region, 

hospices in this region are still anticipated to experience an estimated increase in 
96

payments of 0.4 percent due to the net effect of the reduced BNAF and the updated wage 

index data. Payments to rural outlying regions are anticipated to remain relatively stable.

Column 5 shows the combined effects of the updated wage data, the additional 15 

percent BNAF reduction, and the estimated 2.8 percent inpatient hospital market basket 

update on estimated payments as compared to the estimated FY 2011 payments. Note 

that the FY 2011 payments had a 25 percent BNAF reduction applied to them. Overall, 

urban hospices are anticipated to experience a 2.3 percent increase in payments and rural 

hospices are anticipated to experience a 2.2 percent increase in payments. Urban 

hospices are anticipated to experience an increase in estimated payments in every region, 

ranging from 1.5 percent in the New England region to 2.8 percent in the Pacific region. 

Rural hospices in every region are estimated to see an increase in payments, ranging from 

1.5 percent in the Pacific region to 3.2 percent in the West South Central region. 

d. Type of Ownership

Column 3 demonstrates the effect of the updated wage data on FY 2012 estimated 

payments, versus FY 2011 estimated payments. We anticipate that using the updated 

wage data would decrease estimated payments to government hospices by 0.1 percent

and payments to voluntary (non-profit) hospices would remain relatively unchanged. We 

estimate an increase in payments for proprietary (for-profit) hospices of 0.1 percent.

Column 4 demonstrates the combined effects of the updated wage data and of the 

additional 15 percent BNAF reduction. Estimated payments to voluntary (non-profit) 

hospices are anticipated to decrease by 0.5 percent, while government hospices are 

anticipated to experience a decrease of 0.7 percent. Estimated payments to proprietary 

(for-profit) hospices are anticipated to decrease by 0.4 percent.
97

Column 5 shows the combined effects of the updated wage data, the additional 15 

percent BNAF reduction (for a total BNAF reduction of 40 percent), and an estimated 2.8

percent inpatient hospital market basket update on estimated payments, comparing FY 

2012 to FY 2011 (using a BNAF with a 25 percent reduction). Estimated FY 2012

payments are anticipated to increase 2.3 percent for voluntary (non-profit), 2.1 percent

for government hospices, and 2.4 percent for proprietary (for-profit) hospices. 

e. Hospice Base

Column 3 demonstrates the effect of using the updated wage data, comparing 

estimated payments for FY 2012 to FY 2011. Estimated payments are anticipated to 

increase by 0.1 percent for freestanding hospices and home health agency based hospices, 

and 0.2 percent for hospices based out of a skilled nursing facility. Payments to hospital 

based hospices are estimated to remain relatively unchanged. 

Column 4 shows the combined effects of the updated wage data and reducing the 

BNAF by an additional 15 percent, comparing estimated payments for FY 2012 to FY 

2011. All hospice facilities are anticipated to experience decrease in payments ranging 

from 0.4 percent for skilled nursing facility based hospices, to 0.6 percent for hospital 

based hospices.

Column 5 shows the combined effects of the updated wage data, the additional 15 

percent BNAF reduction, and an estimated 2.8 percent inpatient hospital market basket 

update on estimated payments, comparing FY 2012 to FY 2011. Estimated payments are 

anticipated to increase for all hospices, ranging from 2.2 percent for hospital based 

hospices to 2.4 percent for skilled nursing facility based hospices. 

f. Effects on Other Providers
98

This proposed rule only affects Medicare hospices, and therefore has no effect on 

other provider types.

g. Effects on the Medicare and Medicaid Programs

This proposed rule only affects Medicare hospices, and therefore has no effect on 

Medicaid programs. As described previously, estimated Medicare payments to hospices 

in FY 2012 are anticipated to increase by $10 million due to the update in the wage index 

data, and to decrease by $90 million due to the total 40 percent reduction in the BNAF. 

However, the estimated market basket update of 2.8 percent is anticipated to increase 

Medicare payments by $390 million. Therefore, the total effect on Medicare hospice 

payments is estimated to be a $310 million increase. Note that the final market basket 

update and associated FY 2012 payment rates will be officially communicated this 

summer through an administrative instruction. 

h. Accounting Statement

As required by OMB Circular A-4 (available at 

http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 2 below, we have 

prepared an accounting statement showing the classification of the expenditures 

associated with the provisions of this proposed rule. This table provides our best estimate

of the decrease in Medicare payments under the hospice benefit as a result of the changes 

presented in this proposed rule using data for 3,440 hospices in our database. 
99

TABLE 2-- Accounting Statement: Classification of Estimated Expenditures, From 

FY 2011 to FY 2012 [in $Millions]

Category Transfers

Annualized Monetized Transfers................. $-80* 

From Whom to Whom................................. Federal Government to Hospices

*The $80 million reduction in transfers includes the additional 15 percent 

reduction in the BNAF and the updated wage data. It does not include the hospital 

market basket update, which is estimated at 2.8 percent for FY 2012. This estimated 2.8 

percent does not reflect the provision in the Affordable Care Act (ACA) which reduced 

the hospital market basket update by 0.1 percentage point since that reduction does not 

apply to hospices. 

i. Conclusion

In conclusion, the overall effect of this proposed rule is estimated to be the $80 

million reduction in Federal payments due to the wage index changes (including the 

additional 15 percent reduction in the BNAF). Furthermore, the Secretary has 

determined that this will not have a significant impact on a substantial number of small 

entities, or have a significant effect relative to section 1102(b) of the Act. 

B. Regulatory Flexibility Act Analysis

The RFA requires agencies to analyze options for regulatory relief of small 

businesses if a rule has a significant impact on a substantial number of small entities. For 

purposes of the RFA, we estimate that almost all hospices are small entities as that term 

is used in the RFA. The great majority of hospitals and most other health care providers 
100

and suppliers are small entities, either by being nonprofit organizations or by meeting the 

Small Business Administration (SBA) definition of a small business (having revenues of 

less than $7.0 million to $34.5 million in any 1 year). While the SBA does not define a 

size threshold in terms of annual revenues for hospices, it does define one for home 

health agencies ($13.5 million; see

http://ecfr.gpoaccess.gov/cgi/t/text/textidx?c=ecfr&sid=2465b064ba6965cc1fbd2eae60854b11&rgn=div8&view=text&node=13

:1.0.1.1.16.1.266.9&idno=13). For the purposes of this proposed rule, because the 

hospice benefit is a home-based benefit, we are applying the SBA definition of ―small‖ 

for home health agencies to hospices; we will use this definition of ―small‖ in 

determining if this proposed rule has a significant impact on a substantial number of 

small entities (for example, hospices). Using 2009 Medicare hospice claims data, we 

estimate that 96 percent of hospices have Medicare revenues below $13.5 million and are 

considered small entities. As indicated in Table 1 below, there are 3,440 hospices with

2009 claims data as of January 6, 2011. Approximately 48 percent of those 3,440 

Medicare certified hospices are identified as voluntary or government agencies and, 

therefore, are considered small entities. Most of these and most of the remainder are also 

small hospice entities because, as noted above, their revenues fall below the SBA size 

thresholds. 

The effects of this rule on hospices are shown in Table 1. Overall, Medicare 

payments to all hospices would decrease by an estimated 0.5 percent over last year‘s 

payments in response to the policies that we are proposing in this NPRM, reflecting the 

combined effects of the updated wage data and the additional 15 percent reduction in the 
101

BNAF. The combined effects of the updated wage data and additional 15 percent 

reduction in the BNAF on small or medium sized hospices (as defined by routine home 

care days rather than by the SBA definition), is -0.6 percent. However, when including 

the estimated inpatient hospital market basket update of 2.8 percent into these estimates, 

the combined effects on Medicare payment to all hospices would result in an estimated 

increase of approximately 2.3 percent. For small and medium hospices (as defined by 

routine home care days), the estimated effects on revenue when accounting for the 

updated wage data, the additional 15 percent BNAF reduction, and the estimated 

inpatient hospital market basket update are increases in payments of 2.2 percent. Overall 

average hospice revenue effects will be slightly less than these estimates since according 

the National Hospice and Palliative Care Organization, about 17 percent of hospice 

patients are non-Medicare. 

HHS‘s practice in interpreting the RFA is to consider effects economically 

―significant‖ only if they reach a threshold of 3 to 5 percent or more of total revenue or 

total costs. As noted above, the combined effect of only the updated wage data and the 

additional 15 percent reduced BNAF (for a total BNAF reduction of 40 percent) for all 

hospices is -0.5 percent. Since, by SBA‘s definition of ―small‖ (when applied to 

hospices), nearly all hospices are considered to be small entities, the combined effect of 

only the updated wage data and the additional 15 percent reduced BNAF (-0.5 percent) 

does not exceed HHS‘s 3.0 percent minimum threshold. However, HHS‘s practice in 

determining ―significant economic impact‖ has considered either total revenue or total

costs. Total hospice revenues include the effect of the market basket update. When we 

consider the combined effect of the updated wage data, the additional 15 percent BNAF 
102

reduction, and the estimated 2.8 percent FY 2012 inpatient hospital market basket update, 

the overall impact is an increase in estimated hospice payments of 2.3 percent for FY 

2012. Therefore, the Secretary has determined that this proposed rule would not create a 

significant economic impact on a substantial number of small entities.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact 

analysis if a rule may have a significant impact on the operations of a substantial number 

of small rural hospitals. This analysis must conform to the provisions of section 604 of 

the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as 

a hospital that is located outside of a metropolitan statistical area and has fewer than 100 

beds. This proposed rule only affects hospices. Therefore, the Secretary has determined 

that this proposed rule would not have a significant impact on the operations of a 

substantial number of small rural hospitals.

C. Unfunded Mandates Reform Act Analysis

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 

requires that agencies assess anticipated costs and benefits before issuing any rule whose 

mandates require spending in any 1 year of $100 million in 1995 dollars, updated 

annually for inflation. In 2011, that threshold is approximately $136 million. This 

proposed rule with comment period is not anticipated to have an effect on State, local, or 

tribal governments, in the aggregate, or on the private sector of $136 million or more.

VIII. Federalism Analysis

Executive Order 13132 establishes certain requirements that an agency must meet 

when it promulgates a proposed rule (and subsequent final rule) that imposes substantial 

direct requirement costs on State and local governments, preempts State law, or otherwise 
103

has Federalism implications. We have reviewed this proposed rule under the threshold 

criteria of Executive Order 13132, Federalism, and have determined that it would not 

have an impact on the rights, roles, and responsibilities of State, local, or tribal 

governments.
104

List of Subjects in 42 CFR Part 418

Health Facilities, Hospice Care, Medicare, Reporting and record keeping 

requirements.

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services 

proposes to amend 42 CFR chapter IV as set forth below:

1. The authority citation for part 418 continues to read as follows:

Authority: Secs 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 

1395hh). 

Subpart G – Payment for Hospice Care

2. In § 418.22, paragraphs (a)(4) and (b)(4) are revised to read as follows:

§418.22 Certification of terminal illness

(a) * * *

(4) Face-to-face encounter. As of January 1, 2011, a hospice physician or 

hospice nurse practitioner must have a face-to-face encounter with each hospice patient 

whose total stay across all hospices is anticipated to reach the 3rd benefit period. The 

face-to-face encounter must occur prior to but no more than 30 calendar days prior to the 

3

rd benefit period recertification, and every benefit period recertification thereafter, to 

gather clinical findings to determine continued eligibility for hospice care.

(b) * * *

(4) The physician or nurse practitioner who performs the face-to-face encounter 

with the patient described in paragraph (a)(4) of this section must attest in writing that he 

or she had a face-to-face encounter with the patient, including the date of that visit. The 

attestation of the nurse practitioner or a non-certifying hospice physician shall state that 
105

the clinical findings of that visit were provided to the certifying physician for use in 

determining continued eligibility for hospice care. 

* * * * *

3. Section 418.202 (g) is revised to read:

§418.202 Covered services.

* * * * * 

(g) Home health or hospice aide services furnished by qualified aides as 

designated in §418.76 and homemaker services. Home health aides (also known as

hospice aides) may provide personal care services as defined in §409.45(b) of this 

chapter. Aides may perform household services to maintain a safe and sanitary 

environment in areas of the home used by the patient, such as changing bed linens or 

light cleaning and laundering essential to the comfort and cleanliness of the patient. Aide 

services must be provided under the general supervision of a registered nurse. 

Homemaker services may include assistance in maintenance of a safe and healthy 

environment and services to enable the individual to carry out the treatment plan.

* * * * *

4. In § 418.309, the introductory text and paragraph (b) are revised, and new 

paragraphs (c) and (d) are added, to read:

§418.309 Hospice Aggregate Cap

A hospice‘s aggregate cap is calculated by multiplying the adjusted cap amount 

(determined in paragraph (a) of this section) by the number of Medicare beneficiaries, as 

determined by one of two methodologies for determining the number of Medicare 

beneficiaries for a given cap year described in paragraphs (b) and (c) of this section:
106

* * * * *

(b) Streamlined Methodology Defined. A hospice's aggregate cap is calculated by 

multiplying the adjusted cap amount determined in paragraph (a) of this section by the 

number of Medicare beneficiaries as determined in paragraphs (b)(1) and (2) of this 

section. For purposes of the streamlined methodology calculation—

(1) In the case in which a beneficiary received care from only one hospice, the 

hospice includes in its number of Medicare beneficiaries those Medicare beneficiaries 

who have not previously been included in the calculation of any hospice cap, and who 

have filed an election to receive hospice care in accordance with §418.24 during the 

period beginning on September 28 (34 days before the beginning of the cap year) and 

ending on September 27 (35 days before the end of the cap year), using the best data 

available at the time of the calculation.

(2) In the case in which a beneficiary received care from more than one hospice, 

each hospice includes in its number of Medicare beneficiaries only that fraction which 

represents the portion of a patient‘s total days of care in all hospices and all years that 

was spent in that hospice in that cap year, using the best data available at the time of the 

calculation. The aggregate cap calculation for a given cap year may be adjusted after the 

calculation for that year based on updated data.

(c) Patient-by-Patient Proportional Methodology Defined. A hospice's aggregate 

cap is calculated by multiplying the adjusted cap amount determined in paragraph (a) of 

this section by the number of Medicare beneficiaries as described in paragraphs (c)(1) 

and (2) of this section. For the purposes of the patient-by-patient proportional 

methodology–
107

(1) A hospice includes in its number of Medicare beneficiaries only that fraction 

which represents the portion of a patient‘s total days of care in all hospices and all years 

that was spent in that hospice in that cap year, using the best data available at the time of 

the calculation. The total number of Medicare beneficiaries for a given hospice‘s cap 

year is determined by summing the whole or fractional share of each Medicare 

beneficiary that received hospice care during the cap year, from that hospice. 

(2) The aggregate cap calculation for a given cap year may be adjusted after the 

calculation for that year based on updated data.

(d) Application of Methodologies. (1) For cap years ending October 31, 2011 and 

for prior cap years, a hospice's aggregate cap is calculated using the streamlined 

methodology described in paragraph (b) of this section, subject to the following: 

(i) A hospice that has not received a cap determination for a cap year ending on 

or before October 31, 2011 as of October 1, 2011, may elect to have its final cap 

determination for such cap years calculated using the patient-by-patient proportional 

methodology described in paragraph (c) of this section; or

(ii) A hospice that has filed a timely appeal regarding the methodology used for 

determining the number of Medicare beneficiaries in its cap calculation for any cap year 

is deemed to have elected that its cap determination for the challenged year, and all 

subsequent cap years, be calculated using the patient-by-patient proportional 

methodology described in paragraph (c) of this section.

(2) For cap years ending October 31, 2012, and all subsequent cap years, a

hospice's aggregate cap is calculated using the patient-by-patient proportional 

methodology described in paragraph (c) of this section, subject to the following:
108

(i) A hospice that has had its cap calculated using the patient-by-patient 

proportional methodology for any cap year(s) prior to the 2012 cap year is not eligible to 

elect the streamlined methodology, and must continue to have the patient-by-patient 

proportional methodology used to determine the number of Medicare beneficiaries in a 

given cap year. 

(ii) A hospice that is eligible to make a one-time election to have its cap 

calculated using the streamlined methodology must make that election no later than 60 

days after receipt of its 2012 cap determination. A hospice‘s election to have its cap 

calculated using the streamlined methodology would remain in effect unless:

(A) The hospice subsequently submits a written election to change the 

methodology used in its cap determination to the patient-by-patient proportional 

methodology; or

(B) The hospice appeals the streamlined methodology used to determine the 

number of Medicare beneficiaries used in the aggregate cap calculation.

(3) If a hospice that elected to have its aggregate cap calculated using the 

streamlined methodology under paragraph (d)(2)(ii) of this section subsequently elects 

the patient-by-patient proportional methodology or appeals the streamlined methodology, 

under paragraph (d)(2)(ii)(A) or (B) of this section, the hospice‘s aggregate cap 

determination for that cap year and all subsequent cap years is to be calculated using the 

patient-by-patient proportional methodology. As such, past cap year determinations may 

be adjusted to prevent the over-counting of beneficiaries, notwithstanding the ordinary 

limitations on reopening. 
109

(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare--Hospital 

Insurance; and Program No. 93.774, Medicare--Supplementary Medical Insurance 

Program) 

Dated: April 14, 2011

 ___________________________________

Donald M. Berwick,

Administrator,

Centers for Medicare & Medicaid Services.

Approved: April 19, 2011

 __________________________________

Kathleen Sebelius,

Secretary. 

BILLING CODE 4120-01-P
110

Note: The following Addendums will not be published in the Code of Federal 

Regulations.

ADDENDUM A: FY 2012 WAGE INDEX FOR URBAN AREAS 

CBSA 

Code

Urban Area1

(Constituent Counties)

Wage 

Index2

10180 Abilene, TX

Callahan County, TX

Jones County, TX

Taylor County, TX

0.8287

10380 Aguadilla-Isabela-San Sebastián, PR

Aguada Municipio, PR

Aguadilla Municipio, PR

Añasco Municipio, PR

Isabela Municipio, PR

Lares Municipio, PR

Moca Municipio, PR

Rincón Municipio, PR

San Sebastián Municipio, PR

0.3992

10420 Akron, OH

Portage County, OH

Summit County, OH

0.9156

10500 Albany, GA

Baker County, GA

Dougherty County, GA

Lee County, GA

Terrell County, GA

Worth County, GA

0.9356

10580 Albany-Schenectady-Troy, NY

Albany County, NY

Rensselaer County, NY

Saratoga County, NY

Schenectady County, NY

Schoharie County, NY

0.8960

10740 Albuquerque, NM

Bernalillo County, NM

Sandoval County, NM

Torrance County, NM

Valencia County, NM

0.9791
111

10780 Alexandria, LA

Grant Parish, LA

Rapides Parish, LA

0.8278

10900 Allentown-Bethlehem-Easton, PA-NJ

Warren County, NJ

Carbon County, PA

Lehigh County, PA

Northampton County, PA

0.9520

11020 Altoona, PA

Blair County, PA

0.8925

11100 Amarillo, TX

Armstrong County, TX

Carson County, TX

Potter County, TX

Randall County, TX

0.8950

11180 Ames, IA

Story County, IA

1.0323

11260 Anchorage, AK

Anchorage Municipality, AK

Matanuska-Susitna Borough, AK

1.2388

11300 Anderson, IN

Madison County, IN

0.9518

11340 Anderson, SC

Anderson County, SC

0.8999

11460 Ann Arbor, MI

Washtenaw County, MI

1.0483

11500 Anniston-Oxford, AL

Calhoun County, AL

0.8199

11540 Appleton, WI

Calumet County, WI

Outagamie County, WI

0.9693

11700 Asheville, NC

Buncombe County, NC

Haywood County, NC

Henderson County, NC

Madison County, NC

0.9320

12020 Athens-Clarke County, GA

Clarke County, GA

Madison County, GA

Oconee County, GA

Oglethorpe County, GA

1.0001
112

12060 Atlanta-Sandy Springs-Marietta, GA

Barrow County, GA

Bartow County, GA

Butts County, GA

Carroll County, GA

Cherokee County, GA

Clayton County, GA

Cobb County, GA

Coweta County, GA

Dawson County, GA

DeKalb County, GA

Douglas County, GA

Fayette County, GA

Forsyth County, GA

Fulton County, GA

Gwinnett County, GA

Haralson County, GA

Heard County, GA

Henry County, GA

Jasper County, GA

Lamar County, GA

Meriwether County, GA

Newton County, GA

Paulding County, GA

Pickens County, GA

Pike County, GA

Rockdale County, GA

Spalding County, GA

Walton County, GA

0.9887

12100 Atlantic City-Hammonton, NJ

Atlantic County, NJ

1.1523

12220 Auburn-Opelika, AL

Lee County, AL

0.8000

12260 Augusta-Richmond County, GA-SC

Burke County, GA

Columbia County, GA

McDuffie County, GA

Richmond County, GA

Aiken County, SC

Edgefield County, SC

0.9876
113

12420 Austin

-Round Rock-San Marcos, TX

Bastrop County, TX

Caldwell County, TX

Hays County, TX

Travis County, TX

Williamson County, TX

0.9851

12540 Bakersfield-Delano, CA

Kern County, CA

1.2122

12580 Baltimore-Towson, MD

Anne Arundel County, MD

Baltimore County, MD

Carroll County, MD

Harford County, MD

Howard County, MD

Queen Anne's County, MD

Baltimore City, MD

1.0618

12620 Bangor, ME

Penobscot County, ME

1.0123

12700 Barnstable Town, MA

Barnstable County, MA

1.3277

12940 Baton Rouge, LA

Ascension Parish, LA

East Baton Rouge Parish, LA

East Feliciana Parish, LA

Iberville Parish, LA

Livingston Parish, LA

Pointe Coupee Parish, LA

St. Helena Parish, LA

West Baton Rouge Parish, LA

West Feliciana Parish, LA

0.8887

12980 Battle Creek, MI

Calhoun County, MI

0.9998

13020 Bay City, MI

Bay County, MI

0.9548

13140 Beaumont-Port Arthur, TX

Hardin County, TX

Jefferson County, TX

Orange County, TX

0.8789

13380 Bellingham, WA

Whatcom County, WA

1.1794

13460 Bend, OR

Deschutes County, OR

1.1775
114

13644 Bethesda-Rockville-Frederick, MD

Frederick County, MD

Montgomery County, MD

1.0898

13740 Billings, MT

Carbon County, MT

Yellowstone County, MT

0.8981

13780 Binghamton, NY

Broome County, NY

Tioga County, NY

0.9028

13820 Birmingham-Hoover, AL

Bibb County, AL

Blount County, AL

Chilton County, AL

Jefferson County, AL

St. Clair County, AL

Shelby County, AL

Walker County, AL

0.8916

13900 Bismarck, ND

Burleigh County, ND

Morton County, ND

0.8000

13980 Blacksburg-Christiansburg-Radford, VA

Giles County, VA

Montgomery County, VA

Pulaski County, VA

Radford City, VA

0.8609

14020 Bloomington, IN

Greene County, IN

Monroe County, IN

Owen County, IN

0.9308

14060 Bloomington-Normal, IL

McLean County, IL

0.9773

14260 Boise City-Nampa, ID

Ada County, ID

Boise County, ID

Canyon County, ID

Gem County, ID

Owyhee County, ID

0.9602

14484 Boston-Quincy, MA

Norfolk County, MA

Plymouth County, MA

Suffolk County, MA

1.2610

14500 Boulder, CO

Boulder County, CO

1.0422
115

14540 Bowling Green, KY

Edmonson County, KY

Warren County, KY

0.8973

14740 Bremerton-Silverdale, WA

Kitsap County, WA

1.1045

14860 Bridgeport-Stamford-Norwalk, CT

Fairfield County, CT

1.2992

15180 Brownsville-Harlingen, TX

Cameron County, TX

0.9498

15260 Brunswick, GA

Brantley County, GA

Glynn County, GA

McIntosh County, GA

0.9535

15380 Buffalo-Niagara Falls, NY

Erie County, NY

Niagara County, NY

0.9868

15500 Burlington, NC

Alamance County, NC

0.9177

15540 Burlington-South Burlington, VT

Chittenden County, VT

Franklin County, VT

Grand Isle County, VT

1.0299

15764 Cambridge-Newton-Framingham, MA

Middlesex County, MA

1.1649

15804 Camden, NJ

Burlington County, NJ

Camden County, NJ

Gloucester County, NJ

1.0754

15940 Canton-Massillon, OH

Carroll County, OH

Stark County, OH

0.9059

15980 Cape Coral-Fort Myers, FL

Lee County, FL

0.9521

16020 Cape Girardeau-Jackson, MO-IL

Alexander County, IL

Bollinger County, MO

Cape Girardeau County, MO

0.9301

16180 Carson City, NV

Carson City, NV

1.0836

16220 Casper, WY

Natrona County, WY

0.9997
116

16300 Cedar Rapids, IA

Benton County, IA

Jones County, IA

Linn County, IA

0.9157

16580 Champaign-Urbana, IL

Champaign County, IL

Ford County, IL

Piatt County, IL

1.0598

16620 Charleston, WV

Boone County, WV

Clay County, WV

Kanawha County, WV

Lincoln County, WV

Putnam County, WV

0.8175

16700 Charleston-North Charleston-Summerville, SC

Berkeley County, SC

Charleston County, SC

Dorchester County, SC

0.9685

16740 Charlotte-Gastonia-Rock Hill, NC-SC

Anson County, NC

Cabarrus County, NC

Gaston County, NC

Mecklenburg County, NC

Union County, NC

York County, SC

0.9754

16820 Charlottesville, VA

Albemarle County, VA

Fluvanna County, VA

Greene County, VA

Nelson County, VA

Charlottesville City, VA

0.9673

16860 Chattanooga, TN-GA

Catoosa County, GA

Dade County, GA

Walker County, GA

Hamilton County, TN

Marion County, TN

Sequatchie County, TN

0.9142

16940 Cheyenne, WY

Laramie County, WY

0.9725
117

16974 Chicago-Joliet-Naperville, IL

Cook County, IL

DeKalb County, IL

DuPage County, IL

Grundy County, IL

Kane County, IL

Kendall County, IL

McHenry County, IL

Will County, IL

1.0968

17020 Chico, CA

Butte County, CA

1.1942

17140 Cincinnati-Middletown, OH-KY-IN

Dearborn County, IN

Franklin County, IN

Ohio County, IN

Boone County, KY

Bracken County, KY

Campbell County, KY

Gallatin County, KY

Grant County, KY

Kenton County, KY

Pendleton County, KY

Brown County, OH

Butler County, OH

Clermont County, OH

Hamilton County, OH

Warren County, OH

1.0043

17300 Clarksville, TN-KY

Christian County, KY

Trigg County, KY

Montgomery County, TN

Stewart County, TN

0.8168

17420 Cleveland, TN

Bradley County, TN

Polk County, TN

0.8005

17460 Cleveland-Elyria-Mentor, OH

Cuyahoga County, OH

Geauga County, OH

Lake County, OH

Lorain County, OH

Medina County, OH

0.9371

17660 Coeur d'Alene, ID

Kootenai County, ID

0.9696
118

17780 College Station-Bryan, TX

Brazos County, TX

Burleson County, TX

Robertson County, TX

0.9928

17820 Colorado Springs, CO

El Paso County, CO

Teller County, CO

0.9817

17860 Columbia, MO

Boone County, MO

Howard County, MO

0.8575

17900 Columbia, SC

Calhoun County, SC

Fairfield County, SC

Kershaw County, SC

Lexington County, SC

Richland County, SC

Saluda County, SC

0.9042

17980 Columbus, GA-AL

Russell County, AL

Chattahoochee County, GA

Harris County, GA

Marion County, GA

Muscogee County, GA

0.9347

18020 Columbus, IN

Bartholomew County, IN

0.9768

18140 Columbus, OH

Delaware County, OH

Fairfield County, OH

Franklin County, OH

Licking County, OH

Madison County, OH

Morrow County, OH

Pickaway County, OH

Union County, OH

1.0500

18580 Corpus Christi, TX

Aransas County, TX

Nueces County, TX

San Patricio County, TX

0.8889

18700 Corvallis, OR

Benton County, OR

1.0825

18880 Crestview-Fort Walton Beach-Destin, FL

Okaloosa County, FL

0.9155
119

19060 Cumberland, MD-WV

Allegany County, MD

Mineral County, WV

0.8476

19124 Dallas-Plano-Irving, TX

Collin County, TX

Dallas County, TX

Delta County, TX

Denton County, TX

Ellis County, TX

Hunt County, TX

Kaufman County, TX

Rockwall County, TX

1.0209

19140 Dalton, GA

Murray County, GA

Whitfield County, GA

0.8928

19180 Danville, IL

Vermilion County, IL

1.0036

19260 Danville, VA

Pittsylvania County, VA

Danville City, VA

0.8457

19340 Davenport-Moline-Rock Island, IA-IL

Henry County, IL

Mercer County, IL

Rock Island County, IL

Scott County, IA

0.8698

19380 Dayton, OH

Greene County, OH

Miami County, OH

Montgomery County, OH

Preble County, OH

0.9464

19460 Decatur, AL

Lawrence County, AL

Morgan County, AL

0.8000

19500 Decatur, IL

Macon County, IL

0.8197

19660 Deltona-Daytona Beach-Ormond Beach, FL

Volusia County, FL

0.9046
120

19740 Denver-Aurora-Broomfield, CO

Adams County, CO

Arapahoe County, CO

Broomfield County, CO

Clear Creek County, CO

Denver County, CO

Douglas County, CO

Elbert County, CO

Gilpin County, CO

Jefferson County, CO

Park County, CO

1.1098

19780 Des Moines-West Des Moines, IA

Dallas County, IA

Guthrie County, IA

Madison County, IA

Polk County, IA

Warren County, IA

0.9962

19804 Detroit-Livonia-Dearborn, MI

Wayne County, MI

1.0043

20020 Dothan, AL

Geneva County, AL

Henry County, AL

Houston County, AL

0.8000

20100 Dover, DE

Kent County, DE

1.0273

20220 Dubuque, IA

Dubuque County, IA

0.9085

20260 Duluth, MN-WI

Carlton County, MN

St. Louis County, MN

Douglas County, WI

1.0939

20500 Durham-Chapel Hill, NC

Chatham County, NC

Durham County, NC

Orange County, NC

Person County, NC

1.0006

20740 Eau Claire, WI

Chippewa County, WI

Eau Claire County, WI

0.9981

20764 Edison-New Brunswick, NJ

Middlesex County, NJ

Monmouth County, NJ

Ocean County, NJ

Somerset County, NJ

1.1396
121

20940 El Centro, CA

Imperial County, CA

0.9586

21060 Elizabethtown, KY

Hardin County, KY

Larue County, KY

0.8748

21140 Elkhart-Goshen, IN

Elkhart County, IN

0.9800

21300 Elmira, NY

Chemung County, NY

0.8744

21340 El Paso, TX

El Paso County, TX

0.8775

21500 Erie, PA

Erie County, PA

0.8656

21660 Eugene-Springfield, OR

Lane County, OR

1.1787

21780 Evansville, IN-KY

Gibson County, IN

Posey County, IN

Vanderburgh County, IN

Warrick County, IN

Henderson County, KY

Webster County, KY

0.8732

21820 Fairbanks, AK

Fairbanks North Star Borough, AK

1.1473

21940 Fajardo, PR

Ceiba Municipio, PR

Fajardo Municipio, PR

Luquillo Municipio, PR

0.4465

22020 Fargo, ND-MN

Cass County, ND

Clay County, MN

0.8350

22140 Farmington, NM

San Juan County, NM

0.9670

22180 Fayetteville, NC

Cumberland County, NC

Hoke County, NC

0.9653

22220 Fayetteville-Springdale-Rogers, AR-MO

Benton County, AR

Madison County, AR

Washington County, AR

McDonald County, MO

0.8921

22380 Flagstaff, AZ

Coconino County, AZ

1.2884
122

22420 Flint, MI

Genesee County, MI

1.1903

22500 Florence, SC

Darlington County, SC

Florence County, SC

0.8544

22520 Florence-Muscle Shoals, AL

Colbert County, AL

Lauderdale County, AL

0.8433

22540 Fond du Lac, WI

Fond du Lac County, WI

0.9550

22660 Fort Collins-Loveland, CO

Larimer County, CO

1.0243

22744 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL

Broward County, FL

1.0520

22900 Fort Smith, AR-OK

Crawford County, AR

Franklin County, AR

Sebastian County, AR

Le Flore County, OK

Sequoyah County, OK

0.8000

23060 Fort Wayne, IN

Allen County, IN

Wells County, IN

Whitley County, IN

0.9694

23104 Fort Worth-Arlington, TX

Johnson County, TX

Parker County, TX

Tarrant County, TX

Wise County, TX

0.9810

23420 Fresno, CA

Fresno County, CA

1.1827

23460 Gadsden, AL

Etowah County, AL

0.8000

23540 Gainesville, FL

Alachua County, FL

Gilchrist County, FL

0.9485

23580 Gainesville, GA

Hall County, GA

0.9550

23844 Gary, IN

Jasper County, IN

Lake County, IN

Newton County, IN

Porter County, IN

0.9406
123

24020 Glens Falls, NY

Warren County, NY

Washington County, NY

0.8808

24140 Goldsboro, NC

Wayne County, NC

0.9388

24220 Grand Forks, ND-MN

Polk County, MN

Grand Forks County, ND

0.8000

24300 Grand Junction, CO

Mesa County, CO

1.0199

24340 Grand Rapids-Wyoming, MI

Barry County, MI

Ionia County, MI

Kent County, MI

Newaygo County, MI

0.9494

24500 Great Falls, MT

Cascade County, MT

0.8583

24540 Greeley, CO

Weld County, CO

0.9833

24580 Green Bay, WI

Brown County, WI

Kewaunee County, WI

Oconto County, WI

0.9926

24660 Greensboro-High Point, NC

Guilford County, NC

Randolph County, NC

Rockingham County, NC

0.9197

24780 Greenville, NC

Greene County, NC

Pitt County, NC

0.9702

24860 Greenville-Mauldin-Easley, SC

Greenville County, SC

Laurens County, SC

Pickens County, SC

0.9986

25020 Guayama, PR

Arroyo Municipio, PR

Guayama Municipio, PR

Patillas Municipio, PR

0.4239

25060 Gulfport-Biloxi, MS

Hancock County, MS

Harrison County, MS

Stone County, MS

0.9192
124

25180 Hagerstown-Martinsburg, MD-WV

Washington County, MD

Berkeley County, WV

Morgan County, WV

0.9582

25260 Hanford-Corcoran, CA

Kings County, CA

1.1602

25420 Harrisburg-Carlisle, PA

Cumberland County, PA

Dauphin County, PA

Perry County, PA

0.9625

25500 Harrisonburg, VA

Rockingham County, VA

Harrisonburg City, VA

0.9483

25540 Hartford-West Hartford-East Hartford, CT

Hartford County, CT

Middlesex County, CT

Tolland County, CT

1.1314

25620 Hattiesburg, MS

Forrest County, MS

Lamar County, MS

Perry County, MS

0.8000

25860 Hickory-Lenoir-Morganton, NC

Alexander County, NC

Burke County, NC

Caldwell County, NC

Catawba County, NC

0.9001

25980 Hinesville-Fort Stewart, GA3

Liberty County, GA

Long County, GA

0.9275

26100 Holland-Grand Haven, MI

Ottawa County, MI

0.8938

26180 Honolulu, HI

Honolulu County, HI

1.2225

26300 Hot Springs, AR

Garland County, AR

0.9475

26380 Houma-Bayou Cane-Thibodaux, LA

Lafourche Parish, LA

Terrebonne Parish, LA

0.8130
125

26420 Houston-Sugar Land-Baytown, TX

Austin County, TX

Brazoria County, TX

Chambers County, TX

Fort Bend County, TX

Galveston County, TX

Harris County, TX

Liberty County, TX

Montgomery County, TX

San Jacinto County, TX

Waller County, TX

1.0172

26580 Huntington-Ashland, WV-KY-OH

Boyd County, KY

Greenup County, KY

Lawrence County, OH

Cabell County, WV

Wayne County, WV

0.9270

26620 Huntsville, AL

Limestone County, AL

Madison County, AL

0.9517

26820 Idaho Falls, ID

Bonneville County, ID

Jefferson County, ID

1.0005

26900 Indianapolis-Carmel, IN

Boone County, IN

Brown County, IN

Hamilton County, IN

Hancock County, IN

Hendricks County, IN

Johnson County, IN

Marion County, IN

Morgan County, IN

Putnam County, IN

Shelby County, IN

1.0015

26980 Iowa City, IA

Johnson County, IA

Washington County, IA

0.9999

27060 Ithaca, NY

Tompkins County, NY

1.0191

27100 Jackson, MI

Jackson County, MI

0.9479
126

27140 Jackson, MS

Copiah County, MS

Hinds County, MS

Madison County, MS

Rankin County, MS

Simpson County, MS

0.8327

27180 Jackson, TN

Chester County, TN

Madison County, TN

0.8702

27260 Jacksonville, FL

Baker County, FL

Clay County, FL

Duval County, FL

Nassau County, FL

St. Johns County, FL

0.9199

27340 Jacksonville, NC

Onslow County, NC

0.8084

27500 Janesville, WI

Rock County, WI

0.9749

27620 Jefferson City, MO

Callaway County, MO

Cole County, MO

Moniteau County, MO

Osage County, MO

0.8733

27740 Johnson City, TN

Carter County, TN

Unicoi County, TN

Washington County, TN

0.8392

27780 Johnstown, PA

Cambria County, PA

0.8377

27860 Jonesboro, AR

Craighead County, AR

Poinsett County, AR

0.8032

27900 Joplin, MO

Jasper County, MO

Newton County, MO

0.8505

28020 Kalamazoo-Portage, MI

Kalamazoo County, MI

Van Buren County, MI

1.0657

28100 Kankakee-Bradley, IL

Kankakee County, IL

1.0995
127

28140 Kansas City, MO-KS

Franklin County, KS

Johnson County, KS

Leavenworth County, KS

Linn County, KS

Miami County, KS

Wyandotte County, KS

Bates County, MO

Caldwell County, MO

Cass County, MO

Clay County, MO

Clinton County, MO

Jackson County, MO

Lafayette County, MO

Platte County, MO

Ray County, MO

0.9994

28420 Kennewick-Pasco-Richland, WA

Benton County, WA

Franklin County, WA

1.0330

28660 Killeen-Temple-Fort Hood, TX

Bell County, TX

Coryell County, TX

Lampasas County, TX

0.9110

28700 Kingsport-Bristol-Bristol, TN-VA

Hawkins County, TN

Sullivan County, TN

Bristol City, VA

Scott County, VA

Washington County, VA

0.8000

28740 Kingston, NY

Ulster County, NY

0.9397

28940 Knoxville, TN

Anderson County, TN

Blount County, TN

Knox County, TN

Loudon County, TN

Union County, TN

0.8120

29020 Kokomo, IN

Howard County, IN

Tipton County, IN

0.9454

29100 La Crosse, WI-MN

Houston County, MN

La Crosse County, WI

1.0150
128

29140 Lafayette, IN

Benton County, IN

Carroll County, IN

Tippecanoe County, IN

0.9618

29180 Lafayette, LA

Lafayette Parish, LA

St. Martin Parish, LA

0.8790

29340 Lake Charles, LA

Calcasieu Parish, LA

Cameron Parish, LA

0.8486

29404 Lake County-Kenosha County, IL-WI

Lake County, IL

Kenosha County, WI

1.1163

29420 Lake Havasu City - Kingman, AZ

Mohave County, AZ

1.0598

29460 Lakeland-Winter Haven, FL

Polk County, FL

0.8746

29540 Lancaster, PA

Lancaster County, PA

0.9675

29620 Lansing-East Lansing, MI

Clinton County, MI

Eaton County, MI

Ingham County, MI

1.0663

29700 Laredo, TX

Webb County, TX

0.8194

29740 Las Cruces, NM

Dona Ana County, NM

0.9625

29820 Las Vegas-Paradise, NV

Clark County, NV

1.2528

29940 Lawrence, KS

Douglas County, KS

0.8835

30020 Lawton, OK

Comanche County, OK

0.8579

30140 Lebanon, PA

Lebanon County, PA

0.8084

30300 Lewiston, ID-WA

Nez Perce County, ID

Asotin County, WA

0.9690

30340 Lewiston-Auburn, ME

Androscoggin County, ME

0.9218
129

30460 Lexington-Fayette, KY

Bourbon County, KY

Clark County, KY

Fayette County, KY

Jessamine County, KY

Scott County, KY

Woodford County, KY

0.9129

30620 Lima, OH

Allen County, OH

0.9600

30700 Lincoln, NE

Lancaster County, NE

Seward County, NE

0.9958

30780 Little Rock-North Little Rock-Conway AR

Faulkner County, AR

Grant County, AR

Lonoke County, AR

Perry County, AR

Pulaski County, AR

Saline County, AR

0.8849

30860 Logan, UT-ID

Franklin County, ID

Cache County, UT

0.9106

30980 Longview, TX

Gregg County, TX

Rusk County, TX

Upshur County, TX

0.8866

31020 Longview, WA

Cowlitz County, WA

1.0661

31084 Los Angeles-Long Beach-Glendale, CA

Los Angeles County, CA

1.2560

31140 Louisville-Jefferson County, KY-IN

Clark County, IN

Floyd County, IN

Harrison County, IN

Washington County, IN

Bullitt County, KY

Henry County, KY

Jefferson County, KY

Meade County, KY

Nelson County, KY

Oldham County, KY

Shelby County, KY

Spencer County, KY

Trimble County, KY

0.9211
130

31180 Lubbock, TX

Crosby County, TX

Lubbock County, TX

0.9161

31340 Lynchburg, VA

Amherst County, VA

Appomattox County, VA

Bedford County, VA

Campbell County, VA

Bedford City, VA

Lynchburg City, VA

0.9002

31420 Macon, GA

Bibb County, GA

Crawford County, GA

Jones County, GA

Monroe County, GA

Twiggs County, GA

0.9528

31460 Madera-Chowchilla, CA

Madera County, CA

0.8269

31540 Madison, WI

Columbia County, WI

Dane County, WI

Iowa County, WI

1.1694

31700 Manchester-Nashua, NH

Hillsborough County, NH

1.0219

31740 Manhattan, KS

Geary County, KS

Pottawatomie County, KS

Riley County, KS

0.8125

31860 Mankato-North Mankato, MN

Blue Earth County, MN

Nicollet County, MN

0.9405

31900 Mansfield, OH

Richland County, OH

0.9234

32420 Mayagüez, PR

Hormigueros Municipio, PR

Mayagüez Municipio, PR

0.4186

32580 McAllen-Edinburg-Mission, TX

Hidalgo County, TX

0.9150

32780 Medford, OR

Jackson County, OR

1.0418
131

32820 Memphis, TN-MS-AR

Crittenden County, AR

DeSoto County, MS

Marshall County, MS

Tate County, MS

Tunica County, MS

Fayette County, TN

Shelby County, TN

Tipton County, TN

0.9596

32900 Merced, CA

Merced County, CA

1.2797

33124 Miami-Miami Beach-Kendall, FL

Miami-Dade County, FL

1.0487

33140 Michigan City-La Porte, IN

LaPorte County, IN

0.9806

33260 Midland, TX

Midland County, TX

1.0055

33340 Milwaukee-Waukesha-West Allis, WI

Milwaukee County, WI

Ozaukee County, WI

Washington County, WI

Waukesha County, WI

1.0544

33460 Minneapolis-St. Paul-Bloomington, MN-WI

Anoka County, MN

Carver County, MN

Chisago County, MN

Dakota County, MN

Hennepin County, MN

Isanti County, MN

Ramsey County, MN

Scott County, MN

Sherburne County, MN

Washington County, MN

Wright County, MN

Pierce County, WI

St. Croix County, WI

1.1538

33540 Missoula, MT

Missoula County, MT

0.9237

33660 Mobile, AL

Mobile County, AL

0.8242

33700 Modesto, CA

Stanislaus County, CA

1.2533
132

33740 Monroe, LA

Ouachita Parish, LA

Union Parish, LA

0.8276

33780 Monroe, MI

Monroe County, MI

0.8992

33860 Montgomery, AL

Autauga County, AL

Elmore County, AL

Lowndes County, AL

Montgomery County, AL

0.8741

34060 Morgantown, WV

Monongalia County, WV

Preston County, WV

0.8425

34100 Morristown, TN

Grainger County, TN

Hamblen County, TN

Jefferson County, TN

0.8000

34580 Mount Vernon-Anacortes, WA

Skagit County, WA

1.0730

34620 Muncie, IN

Delaware County, IN

0.8497

34740 Muskegon-Norton Shores, MI

Muskegon County, MI

1.0157

34820 Myrtle Beach-North Myrtle Beach-Conway, SC

Horry County, SC

0.9048

34900 Napa, CA

Napa County, CA

1.5122

34940 Naples-Marco Island, FL

Collier County, FL

1.0042

34980 Nashville-Davidson--Murfreesboro-Franklin, TN

Cannon County, TN

Cheatham County, TN

Davidson County, TN

Dickson County, TN

Hickman County, TN

Macon County, TN

Robertson County, TN

Rutherford County, TN

Smith County, TN

Sumner County, TN

Trousdale County, TN

Williamson County, TN

Wilson County, TN

0.9792
133

35004 Nassau-Suffolk, NY

Nassau County, NY

Suffolk County, NY

1.2751

35084 Newark-Union, NJ-PA

Essex County, NJ

Hunterdon County, NJ

Morris County, NJ

Sussex County, NJ

Union County, NJ

Pike County, PA

1.1866

35300 New Haven-Milford, CT

New Haven County, CT

1.1923

35380 New Orleans-Metairie-Kenner, LA

Jefferson Parish, LA

Orleans Parish, LA

Plaquemines Parish, LA

St. Bernard Parish, LA

St. Charles Parish, LA

St. John the Baptist Parish, LA

St. Tammany Parish, LA

0.9391

35644 New York-White Plains-Wayne, NY-NJ

Bergen County, NJ

Hudson County, NJ

Passaic County, NJ

Bronx County, NY

Kings County, NY

New York County, NY

Putnam County, NY

Queens County, NY

Richmond County, NY

Rockland County, NY

Westchester County, NY

1.3414

35660 Niles-Benton Harbor, MI

Berrien County, MI

0.9186

35840 North Port-Bradenton-Sarasota, FL

Manatee County, FL

Sarasota County, FL

0.9817

35980 Norwich-New London, CT

New London County, CT

1.1612

36084 Oakland-Fremont-Hayward, CA

Alameda County, CA

Contra Costa County, CA

1.6934

36100 Ocala, FL

Marion County, FL

0.8768
134

36140 Ocean City, NJ

Cape May County, NJ

1.1265

36220 Odessa, TX

Ector County, TX

0.9770

36260 Ogden-Clearfield, UT

Davis County, UT

Morgan County, UT

Weber County, UT

0.9595

36420 Oklahoma City, OK

Canadian County, OK

Cleveland County, OK

Grady County, OK

Lincoln County, OK

Logan County, OK

McClain County, OK

Oklahoma County, OK

0.9192

36500 Olympia, WA

Thurston County, WA

1.1668

36540 Omaha-Council Bluffs, NE-IA

Harrison County, IA

Mills County, IA

Pottawattamie County, IA

Cass County, NE

Douglas County, NE

Sarpy County, NE

Saunders County, NE

Washington County, NE

0.9923

36740 Orlando-Kissimmee-Sanford, FL

Lake County, FL

Orange County, FL

Osceola County, FL

Seminole County, FL

0.9488

36780 Oshkosh-Neenah, WI

Winnebago County, WI

0.9905

36980 Owensboro, KY

Daviess County, KY

Hancock County, KY

McLean County, KY

0.8667

37100 Oxnard-Thousand Oaks-Ventura, CA

Ventura County, CA

1.2816

37340 Palm Bay-Melbourne-Titusville, FL

Brevard County, FL

0.9537

37380 Palm Coast, FL

Flagler County, FL

0.8703
135

37460 Panama City-Lynn Haven-Panama City Beach, FL

Bay County, FL

0.8236

37620 Parkersburg-Marietta-Vienna, WV-OH

Washington County, OH

Pleasants County, WV

Wirt County, WV

Wood County, WV

0.8000

37700 Pascagoula, MS

George County, MS

Jackson County, MS

0.8593

37764 Peabody, MA

Essex County, MA

1.1368

37860 Pensacola-Ferry Pass-Brent, FL

Escambia County, FL

Santa Rosa County, FL

0.8546

37900 Peoria, IL

Marshall County, IL

Peoria County, IL

Stark County, IL

Tazewell County, IL

Woodford County, IL

0.9473

37964 Philadelphia, PA

Bucks County, PA

Chester County, PA

Delaware County, PA

Montgomery County, PA

Philadelphia County, PA

1.1186

38060 Phoenix-Mesa-Glendale, AZ

Maricopa County, AZ

Pinal County, AZ

1.1019

38220 Pine Bluff, AR

Cleveland County, AR

Jefferson County, AR

Lincoln County, AR

0.8296

38300 Pittsburgh, PA

Allegheny County, PA

Armstrong County, PA

Beaver County, PA

Butler County, PA

Fayette County, PA

Washington County, PA

Westmoreland County, PA

0.8910

38340 Pittsfield, MA

Berkshire County, MA

1.0739
136

38540 Pocatello, ID

Bannock County, ID

Power County, ID

0.9844

38660 Ponce, PR

Juana Díaz Municipio, PR

Ponce Municipio, PR

Villalba Municipio, PR

0.4975

38860 Portland-South Portland-Biddeford, ME

Cumberland County, ME

Sagadahoc County, ME

York County, ME

1.0250

38900 Portland-Vancouver-Hillsboro, OR-WA

Clackamas County, OR

Columbia County, OR

Multnomah County, OR

Washington County, OR

Yamhill County, OR

Clark County, WA

Skamania County, WA

1.1883

38940 Port St. Lucie, FL

Martin County, FL

St. Lucie County, FL

1.1103

39100 Poughkeepsie-Newburgh-Middletown, NY

Dutchess County, NY

Orange County, NY

1.1756

39140 Prescott, AZ

Yavapai County, AZ

1.2668

39300 Providence-New Bedford-Fall River, RI-MA

Bristol County, MA

Bristol County, RI

Kent County, RI

Newport County, RI

Providence County, RI

Washington County, RI

1.1094

39340 Provo-Orem, UT

Juab County, UT

Utah County, UT

0.9651

39380 Pueblo, CO

Pueblo County, CO

0.9030

39460 Punta Gorda, FL

Charlotte County, FL

0.9069

39540 Racine, WI

Racine County, WI

1.0955
137

39580 Raleigh-Cary, NC

Franklin County, NC

Johnston County, NC

Wake County, NC

1.0159

39660 Rapid City, SD

Meade County, SD

Pennington County, SD

1.0812

39740 Reading, PA

Berks County, PA

0.9220

39820 Redding, CA

Shasta County, CA

1.4635

39900 Reno-Sparks, NV

Storey County, NV

Washoe County, NV

1.0788

40060 Richmond, VA

Amelia County, VA

Caroline County, VA

Charles City County, VA

Chesterfield County, VA

Cumberland County, VA

Dinwiddie County, VA

Goochland County, VA

Hanover County, VA

Henrico County, VA

King and Queen County, VA

King William County, VA

Louisa County, VA

New Kent County, VA

Powhatan County, VA

Prince George County, VA

Sussex County, VA

Colonial Heights City, VA

Hopewell City, VA

Petersburg City, VA

Richmond City, VA

1.0003

40140 Riverside-San Bernardino-Ontario, CA

Riverside County, CA

San Bernardino County, CA

1.1980

40220 Roanoke, VA

Botetourt County, VA

Craig County, VA

Franklin County, VA

Roanoke County, VA

Roanoke City, VA

0.9140
138

Salem City, VA

40340 Rochester, MN

Dodge County, MN

Olmsted County, MN

Wabasha County, MN

1.1330

40380 Rochester, NY

Livingston County, NY

Monroe County, NY

Ontario County, NY

Orleans County, NY

Wayne County, NY

0.8900

40420 Rockford, IL

Boone County, IL

Winnebago County, IL

1.0389

40484 Rockingham County-Strafford County, NH

Rockingham County, NH

Strafford County, NH

1.0381

40580 Rocky Mount, NC

Edgecombe County, NC

Nash County, NC

0.9354

40660 Rome, GA

Floyd County, GA

0.8941

40900 Sacramento--Arden-Arcade--Roseville, CA

El Dorado County, CA

Placer County, CA

Sacramento County, CA

Yolo County, CA

1.4551

40980 Saginaw-Saginaw Township North, MI

Saginaw County, MI

0.9037

41060 St. Cloud, MN

Benton County, MN

Stearns County, MN

1.1433

41100 St. George, UT

Washington County, UT

0.9457

41140 St. Joseph, MO-KS

Doniphan County, KS

Andrew County, MO

Buchanan County, MO

DeKalb County, MO

1.0667
139

41180 St. Louis, MO-IL

Bond County, IL

Calhoun County, IL

Clinton County, IL

Jersey County, IL

Macoupin County, IL

Madison County, IL

Monroe County, IL

St. Clair County, IL

Crawford County, MO

Franklin County, MO

Jefferson County, MO

Lincoln County, MO

St. Charles County, MO

St. Louis County, MO

Warren County, MO

Washington County, MO

St. Louis City, MO

0.9412

41420 Salem, OR

Marion County, OR

Polk County, OR

1.1528

41500 Salinas, CA

Monterey County, CA

1.6242

41540 Salisbury, MD

Somerset County, MD

Wicomico County, MD

0.9324

41620 Salt Lake City, UT

Salt Lake County, UT

Summit County, UT

Tooele County, UT

0.9594

41660 San Angelo, TX

Irion County, TX

Tom Green County, TX

0.8597

41700 San Antonio-New Braunfels, TX

Atascosa County, TX

Bandera County, TX

Bexar County, TX

Comal County, TX

Guadalupe County, TX

Kendall County, TX

Medina County, TX

Wilson County, TX

0.9317

41740 San Diego-Carlsbad-San Marcos, CA

San Diego County, CA

1.2403
140

41780 Sandusky, OH

Erie County, OH

0.8994

41884 San Francisco-San Mateo-Redwood City, CA

Marin County, CA

San Francisco County, CA

San Mateo County, CA

1.6291

41900 San Germán-Cabo Rojo, PR

Cabo Rojo Municipio, PR

Lajas Municipio, PR

Sabana Grande Municipio, PR

San Germán Municipio, PR

0.5244

41940 San Jose-Sunnyvale-Santa Clara, CA

San Benito County, CA

Santa Clara County, CA

1.7295

41980 San Juan-Caguas-Guaynabo, PR

Aguas Buenas Municipio, PR

Aibonito Municipio, PR

Arecibo Municipio, PR

Barceloneta Municipio, PR

Barranquitas Municipio, PR

Bayamón Municipio, PR

Caguas Municipio, PR

Camuy Municipio, PR

Canóvanas Municipio, PR

Carolina Municipio, PR

Cataño Municipio, PR

Cayey Municipio, PR

Ciales Municipio, PR

Cidra Municipio, PR

Comerío Municipio, PR

Corozal Municipio, PR

Dorado Municipio, PR

Florida Municipio, PR

Guaynabo Municipio, PR

Gurabo Municipio, PR

Hatillo Municipio, PR

Humacao Municipio, PR

Juncos Municipio, PR

Las Piedras Municipio, PR

Loíza Municipio, PR

Manatí Municipio, PR

Maunabo Municipio, PR

Morovis Municipio, PR

Naguabo Municipio, PR

0.4940
141

Naranjito Municipio, PR

Orocovis Municipio, PR

Quebradillas Municipio, PR

Río Grande Municipio, PR

San Juan Municipio, PR

San Lorenzo Municipio, PR

Toa Alta Municipio, PR

Toa Baja Municipio, PR

Trujillo Alto Municipio, PR

Vega Alta Municipio, PR

Vega Baja Municipio, PR

Yabucoa Municipio, PR

42020 San Luis Obispo-Paso Robles, CA

San Luis Obispo County, CA

1.3373

42044 Santa Ana-Anaheim-Irvine, CA 

Orange County, CA

1.2593

42060 Santa Barbara-Santa Maria-Goleta, CA

Santa Barbara County, CA

1.2331

42100 Santa Cruz-Watsonville, CA

Santa Cruz County, CA

1.7333

42140 Santa Fe, NM

Santa Fe County, NM

1.1231

42220 Santa Rosa-Petaluma, CA

Sonoma County, CA

1.6715

42340 Savannah, GA

Bryan County, GA

Chatham County, GA

Effingham County, GA

0.9223

42540 Scranton--Wilkes-Barre, PA

Lackawanna County, PA

Luzerne County, PA

Wyoming County, PA

0.8530

42644 Seattle-Bellevue-Everett, WA

King County, WA

Snohomish County, WA

1.1966

42680 Sebastian-Vero Beach, FL 0.9419
142

Indian River County, FL

43100 Sheboygan, WI

Sheboygan County, WI

0.9560

43300 Sherman-Denison, TX

Grayson County, TX

0.8572

43340 Shreveport-Bossier City, LA

Bossier Parish, LA

Caddo Parish, LA

De Soto Parish, LA

0.8838

43580 Sioux City, IA-NE-SD

Woodbury County, IA

Dakota County, NE

Dixon County, NE

Union County, SD

0.9413

43620 Sioux Falls, SD

Lincoln County, SD

McCook County, SD

Minnehaha County, SD

Turner County, SD

0.9629

43780 South Bend-Mishawaka, IN-MI

St. Joseph County, IN

Cass County, MI

1.0301

43900 Spartanburg, SC

Spartanburg County, SC

0.9716

44060 Spokane, WA

Spokane County, WA

1.0946

44100 Springfield, IL

Menard County, IL

Sangamon County, IL

0.9454

44140 Springfield, MA

Franklin County, MA

Hampden County, MA

Hampshire County, MA

1.0614

44180 Springfield, MO

Christian County, MO

Dallas County, MO

Greene County, MO

Polk County, MO

Webster County, MO

0.8668

44220 Springfield, OH

Clark County, OH

0.9561

44300 State College, PA

Centre County, PA

0.9090
143

44600 Steubenville-Weirton, OH-WV

Jefferson County, OH

Brooke County, WV

Hancock County, WV

0.8000

44700 Stockton, CA

San Joaquin County, CA

1.3092

44940 Sumter, SC

Sumter County, SC

0.8139

45060 Syracuse, NY

Madison County, NY

Onondaga County, NY

Oswego County, NY

1.0256

45104 Tacoma, WA 

Pierce County, WA

1.1745

45220 Tallahassee, FL

Gadsden County, FL

Jefferson County, FL

Leon County, FL

Wakulla County, FL

0.9118

45300 Tampa-St. Petersburg-Clearwater, FL

Hernando County, FL

Hillsborough County, FL

Pasco County, FL

Pinellas County, FL

0.9375

45460 Terre Haute, IN

Clay County, IN

Sullivan County, IN

Vermillion County, IN

Vigo County, IN

0.9531

45500 Texarkana, TX-Texarkana, AR

Miller County, AR

Bowie County, TX

0.8023

45780 Toledo, OH

Fulton County, OH

Lucas County, OH

Ottawa County, OH

Wood County, OH

0.9766

45820 Topeka, KS

Jackson County, KS

Jefferson County, KS

Osage County, KS

Shawnee County, KS

Wabaunsee County, KS

0.9269
144

45940 Trenton-Ewing, NJ

Mercer County, NJ

1.0510

46060 Tucson, AZ

Pima County, AZ

0.9816

46140 Tulsa, OK

Creek County, OK

Okmulgee County, OK

Osage County, OK

Pawnee County, OK

Rogers County, OK

Tulsa County, OK

Wagoner County, OK

0.9105

46220 Tuscaloosa, AL

Greene County, AL

Hale County, AL

Tuscaloosa County, AL

0.9156

46340 Tyler, TX

Smith County, TX

0.8351

46540 Utica-Rome, NY

Herkimer County, NY

Oneida County, NY

0.8771

46660 Valdosta, GA

Brooks County, GA

Echols County, GA

Lanier County, GA

Lowndes County, GA

0.8222

46700 Vallejo-Fairfield, CA

Solano County, CA

1.5460

47020 Victoria, TX

Calhoun County, TX

Goliad County, TX

Victoria County, TX

0.8510

47220 Vineland-Millville-Bridgeton, NJ

Cumberland County, NJ

1.0907
145

47260 Virginia Beach-Norfolk-Newport News, VA-NC

Currituck County, NC

Gloucester County, VA

Isle of Wight County, VA

James City County, VA

Mathews County, VA

Surry County, VA

York County, VA

Chesapeake City, VA

Hampton City, VA

Newport News City, VA

Norfolk City, VA

Poquoson City, VA

Portsmouth City, VA

Suffolk City, VA

Virginia Beach City, VA

Williamsburg City, VA

0.9279

47300 Visalia-Porterville, CA

Tulare County, CA

1.1119

47380 Waco, TX

McLennan County, TX

0.8701

47580 Warner Robins, GA

Houston County, GA

0.8312

47644 Warren-Troy-Farmington Hills, MI

Lapeer County, MI

Livingston County, MI

Macomb County, MI

Oakland County, MI

St. Clair County, MI

0.9990
146

47894 Washington-Arlington-Alexandria, DC-VA-MD-WV

District of Columbia, DC

Calvert County, MD

Charles County, MD

Prince George's County, MD

Arlington County, VA

Clarke County, VA

Fairfax County, VA

Fauquier County, VA

Loudoun County, VA

Prince William County, VA

Spotsylvania County, VA

Stafford County, VA

Warren County, VA

Alexandria City, VA

Fairfax City, VA

Falls Church City, VA

Fredericksburg City, VA

Manassas City, VA

Manassas Park City, VA

Jefferson County, WV

1.1103

47940 Waterloo-Cedar Falls, IA

Black Hawk County, IA

Bremer County, IA

Grundy County, IA

0.8762

48140 Wausau, WI

Marathon County, WI

0.9902

48300 Wenatchee-East Wenatchee, WA

Chelan County, WA

Douglas County, WA

0.9956

48424 West Palm Beach-Boca Raton-Boynton Beach, FL

Palm Beach County, FL

1.0286

48540 Wheeling, WV-OH

Belmont County, OH

Marshall County, WV

Ohio County, WV

0.7676

48620 Wichita, KS

Butler County, KS

Harvey County, KS

Sedgwick County, KS

Sumner County, KS

0.9213
147

48660 Wichita Falls, TX

Archer County, TX

Clay County, TX

Wichita County, TX

0.9905

48700 Williamsport, PA

Lycoming County, PA

0.8000

48864 Wilmington, DE-MD-NJ

New Castle County, DE

Cecil County, MD

Salem County, NJ

1.0955

48900 Wilmington, NC

Brunswick County, NC

New Hanover County, NC

Pender County, NC

0.9528

49020 Winchester, VA-WV

Frederick County, VA

Winchester City, VA

Hampshire County, WV

1.0356

49180 Winston-Salem, NC

Davie County, NC

Forsyth County, NC

Stokes County, NC

Yadkin County, NC

0.9256

49340 Worcester, MA

Worcester County, MA

1.1402

49420 Yakima, WA

Yakima County, WA

1.0424

49500 Yauco, PR

Guánica Municipio, PR

Guayanilla Municipio, PR

Peñuelas Municipio, PR

Yauco Municipio, PR

0.4066

49620 York-Hanover, PA

York County, PA

1.0337

49660 Youngstown-Warren-Boardman, OH-PA

Mahoning County, OH

Trumbull County, OH

Mercer County, PA

0.8931

49700 Yuba City, CA

Sutter County, CA

Yuba County, CA

1.1434

49740 Yuma, AZ

Yuma County, AZ

0.9612
148

1This column lists each CBSA area name and each county or 

county equivalent, in the CBSA area. Counties not listed in 

this Table are considered to be rural areas. Wage index 

values for rural areas are found in Addendum (B).

2Wage index values are based on FY 2007 hospital cost report 

data before reclassification. These data form the basis for 

the pre-floor, pre-reclassified hospital wage index. The 

budget neutrality adjustment factor (BNAF) or the hospital 

floor is then applied to the pre-floor, pre-reclassified 

hospital wage index to derive the hospice wage index. Wage 

index values greater than or equal to 0.8 are subject to a 

BNAF. The hospice floor calculation is as follows: wage 

index values below 0.8 are adjusted to be the greater or a) 

the 40 percent reduced BNAF OR b) the minimum of the prefloor, pre-reclassified hospital wage index value x 1.15, or 

0.8000. 

For the FY 2012 hospice wage index, the BNAF was reduced by 

a total of 40 percent.

3Because there are no hospitals in this CBSA, the wage index 

value is calculated by taking the average of all other urban 

CBSAs in Georgia. 
149

ADDENDUM B: FY 2012 WAGE INDEX FOR RURAL AREAS 

CBSA 

Code

Nonurban Area Wage 

Index

1 Alabama 0.8000

2 Alaska 1.3073

3 Arizona 0.9417

4 Arkansas 0.8000

5 California 1.2483

6 Colorado 1.0285

7 Connecticut 1.1522

8 Delaware 1.0103

9

District of Columbia1

------

10 Florida 0.8707

11 Georgia 0.8000

12 Hawaii 1.1586

13 Idaho 0.8000

14 Illinois 0.8639

15 Indiana 0.8688

16 Iowa 0.8848

17 Kansas 0.8264

18 Kentucky 0.8107

19 Louisiana 0.8000

20 Maine 0.8892

21 Maryland 0.9500

22 Massachusetts2 1.2186

23 Michigan 0.8858

24 Minnesota 0.9358

25 Mississippi 0.8000

26 Missouri 0.8000

27 Montana 0.8819

28 Nebraska 0.9227
150

29 Nevada 0.9681

30 New Hampshire 1.0569

31 New Jersey1------

32 New Mexico 0.9227

33 New York 0.8475

34 North Carolina 0.8655

35 North Dakota 0.7856

36 Ohio 0.8864

37 Oklahoma 0.8139

38 Oregon 1.0384

39 Pennsylvania 0.8781

40 Puerto Rico30.4654

41 Rhode Island1------

42 South Carolina 0.8711

43 South Dakota 0.8838

44 Tennessee 0.8165

45 Texas 0.8083

46 Utah 0.8955

47 Vermont 0.9931

48 Virgin Islands 0.8276

49 Virginia 0.8119

50 Washington 1.0545

51 West Virginia 0.8000

52 Wisconsin 0.9512

53 Wyoming 0.9866

65 Guam 0.9952

1There are no rural areas in this State or District

2There are no hospitals in the rural areas of Massachusetts, 

so the wage index value used is the average of the 

contiguous Counties.

3Wage index values are obtained using the methodology 

described in this proposed rule.