26806 Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 

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 July 8, 2011. 

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, 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. 

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 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, PreReclassified, 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 

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 


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b. Proposed Quality Measures for the 

Quality Reporting Program for Hospices 

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 

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 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 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 CBSA-based 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 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, prereclassified hospital wage index when 

deriving the hospice wage index. 


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26808 Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 

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 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 prefloor, 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 an 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 prereclassified 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 

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, prereclassified 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 × 1.045422 = 0.4175). 

Pre-floor, pre-reclassified hospital 

wage index value below 0.8 multiplied 

by the hospice floor: (0.3994 × 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 nonlabor portion of the payment rates is as 

follows: for 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, prereclassified hospital wage index was 

adopted for use in deriving the hospice 

wage index, it was decided not to take 

into account IPPS 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 prefloor, 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, prereclassified hospital wage index value to 

use as a reasonable proxy for these 

areas. Consequently, in subsequent 

fiscal years, we applied the average prefloor, 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 


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Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 26809 

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, prereclassified 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, prereclassified 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, prereclassified 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 prefloor, pre-reclassified hospital wage 

data, is easy to evaluate, is easy to 

update from year-to-year, 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 prefloor, pre-reclassified rural hospital 

wage index for FY 2008. We noted in 

the FY 2008 final hospice wage index 

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, prereclassified 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 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 pre-floor, 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 pre-floor, prereclassified 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 multicampus 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 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 multicampus 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), ChicagoNaperville-Joliet, 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 


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26810 Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 

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 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 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 perbeneficiary ‘‘cap amount.’’ The Act 

established the per-beneficiary 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 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. 

• Option 2: In this option, we 

described an approach which would 

defer across-the-board 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 patientby-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 their aggregate cap, and therefore 

don’t want to change. One commenter 


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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 multiyear 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 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 openended 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 reopening 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 reopening 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-bypatient 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 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 payas-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 

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 noncancer 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 


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calculation. Another commenter 

suggested we allow hospices to carry 

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 multi-year 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 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. 

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. 

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, pre-reclassified 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 prefloor, pre-reclassified 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, prereclassified 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, pre-reclassified 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 Rico. In August 2007 (72 FR 

50217), we adopted a methodology for 

imputing rural pre-floor, pre-reclassified 

hospital wage index values for areas 

where no hospital wage data are 

available as an acceptable proxy; that 


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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 prefloor, pre-reclassified hospital wage 

index value available for Puerto Rico, 

which is 0.4047. This pre-floor, prereclassified 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 prefloor, pre-reclassified hospital wage 

index data for this calculation. 

As noted above, for FY 2012, the 

hospice wage index values will be based 

solely on the adoption of the CBSAbased labor market definitions and the 

hospital wage index. We continue to use 

the most recent pre-floor and prereclassified 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 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, prereclassified hospital wage index values 

less than 0.8. Currently, the hospice 

floor calculation has 4 steps. First, prefloor, 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, prereclassified 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, prereclassified hospital wage index value is 

multiplied 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, prereclassified 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 prefloor, 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 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 


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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. 

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 Medicare contractors will 

recalculate that year’s cap determination 

using the patient-by-patient 

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. 

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 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. 


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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-bypatient 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 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-bypatient 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 twopronged approach is responsive to the 

commenters who do 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 

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 acrossthe-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 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-by-patient 

proportional methodology to elect the 

streamlined methodology for cap years 

2012 and beyond could result in overVerDate Mar<15>2010 17:18 May 06, 2011 Jkt 223001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 E:\FR\FM\09MYP2.SGM 09MYP2

srobinson on DSKHWCL6B1PROD with PROPOSALS2
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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 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-by-patient 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-bypatient proportional methodology by 

either: 

a. Electing to change to the patient-bypatient 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 

patient-by-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 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 re-opening 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 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 ‘‘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 


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Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 26817 

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-byPatient 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-bypatient 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 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 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-bypatient 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 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 faceto-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-to-face 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 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 


srobinson on DSKHWCL6B1PROD with PROPOSALS2
26818 Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 

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 faceto-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 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-toface 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 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-toface 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 long-stay 

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 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 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-to-face encounter 

provision might not be feasible in rural 

areas where there were physician 

shortages. In recommending that nonVerDate Mar<15>2010 17:18 May 06, 2011 Jkt 223001 PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 E:\FR\FM\09MYP2.SGM 09MYP2

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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 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-toface 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 faceto-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 

face-to-face encounter which were 

mandated by the Affordable Care Act of 

2010. A commenter asked how the faceto-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 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 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 


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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 

face-to-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 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-toface 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 timeframe 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-toface 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-to-face 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 

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 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 endstage 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 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 


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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 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 multiyear effort. 

Other considerations in selecting 

measures include: Alignment with other 

Medicare and Medicaid quality 

reporting programs as well as other 

private sector 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://ww.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-filesystemaction/hospice/1_6.pdf. 

We are investigating expanding our 

proposed measures to adopt some of 

these 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 hospice-related 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 

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, 


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implement, and maintain an effective, 

ongoing, hospice-wide 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 

(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 NQFendorsed 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 

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 NQFendorsed 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, 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 

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 


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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 hospice quality 

reporting cycle for the proposed NQFendorsed 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 calendaryear 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. 

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 

http://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-IRFHospice-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 

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 

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-filesystemaction/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 


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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 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 

Accountability 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 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 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 


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must 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) through 418.58(e). These 

conditions of participation require that 

hospices must develop, implement, and 

maintain an effective, ongoing, hospicewide, 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 

CMS-prepared 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 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 

E-mail: OIRA_submission@omb.eop.gov. 

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. 

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. 


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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 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 phaseout 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 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, pre-reclassified 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-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. 


srobinson on DSKHWCL6B1PROD with PROPOSALS2
Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 26827 

TABLE 1—ANTICIPATED IMPACT ON MEDICARE HOSPICE PAYMENTS OF UPDATING THE PRE-FLOOR, 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 

Number of 

routine 

home care 

days in 

thousands 

Percent 

change in 

hospice payments due to 

FY2012 

wage index 

change 

Percent 

change in 

hospice 

payments 

due to wage 

index 

change, and 

additional 

15% reduction in BNAF 

Percent 

change in 

hospice 

payments 

due to wage 

index 

change, additional 15% 

reduction in 

BNAF, and 

market basket update 

(1) (2) (3) (4) (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 

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. 

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 


srobinson on DSKHWCL6B1PROD with PROPOSALS2
26828 Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 

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 

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 

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 

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 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 


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Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 26829 

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 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. 

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 

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. 

TABLE 2—ACCOUNTING STATEMENT: 

CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM FY 2011 TO FY 

2012 

[In $millions] 

Category Transfers 

Annualized Monetized 

Transfers.

$¥80. * 


srobinson on DSKHWCL6B1PROD with PROPOSALS2
26830 Federal Register / Vol. 76, No. 89 / Monday, May 9, 2011 / Proposed Rules 

TABLE 2—ACCOUNTING STATEMENT: 

CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM FY 2011 TO FY 

2012—Continued 

[In $millions] 

Category Transfers 

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 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; seehttp://

ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=

ecfr&sid=2465b064ba6965cc1fbd2

eae60854b11&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 homebased 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 

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 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 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. 


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List of Subjects in 42 CFR Part 418 

Health facilities, Hospice care, 

Medicare, Reporting and recordkeeping 

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 

3rd 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-toface 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 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: 

* * * * * 

(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— 

(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-bypatient 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 patientby-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: 

(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 


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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-bypatient 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. 

(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. 

Note: The following Addendums will not 

be published in the Code of Federal 

Regulations. 

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[FR Doc. 2011–10689 Filed 4–28–11; 4:15 pm] 

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