[Federal Register Volume 83, Number 134 (Thursday, July 12, 2018)]
[Proposed Rules]
[Pages 32340-32522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14443]



[[Page 32339]]

Vol. 83

Thursday,

No. 134

July 12, 2018

Part II





Department of Health and Human Services





-----------------------------------------------------------------------





Centers for Medicare & Medicaid Services





-----------------------------------------------------------------------





42 CFR Parts 409, 424, 484, et al.





Medicare and Medicaid Programs; CY 2019 Home Health Prospective Payment 
System Rate Update and CY 2020 Case-Mix Adjustment Methodology 
Refinements; Home Health Value-Based Purchasing Model; Home Health 
Quality Reporting Requirements; Home Infusion Therapy Requirements; and 
Training Requirements for Surveyors of National Accrediting 
Organizations; Proposed Rule

Federal Register / Vol. 83 , No. 134 / Thursday, July 12, 2018 / 
Proposed Rules

[[Page 32340]]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 409, 424, 484, 486, and 488

[CMS-1689-P]
RIN 0938-AT29


Medicare and Medicaid Programs; CY 2019 Home Health Prospective 
Payment System Rate Update and CY 2020 Case-Mix Adjustment Methodology 
Refinements; Home Health Value-Based Purchasing Model; Home Health 
Quality Reporting Requirements; Home Infusion Therapy Requirements; and 
Training Requirements for Surveyors of National Accrediting 
Organizations

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule would update the home health prospective 
payment system (HH PPS) payment rates, including the national, 
standardized 60-day episode payment rates, the national per-visit 
rates, and the non-routine medical supply (NRS) conversion factor, 
effective for home health episodes of care ending on or after January 
1, 2019. It also proposes updates to the HH PPS case-mix weights for 
calendar year (CY) 2019 using the most current, complete data available 
at the time of rulemaking; discusses our efforts to monitor the 
potential impacts of the rebasing adjustments that were implemented in 
CYs 2014 through 2017; proposes a rebasing of the HH market basket 
(which includes a decrease in the labor-related share); proposes the 
methodology used to determine rural add-on payments for CYs 2019 
through 2022, as required by section 50208 of the Bipartisan Budget Act 
of 2018 hereinafter referred to as the ``BBA of 2018''; proposes 
regulations text changes regarding certifying and recertifying patient 
eligibility for Medicare home health services; and proposes to define 
``remote patient monitoring'' and recognize the cost associated as an 
allowable administrative cost. Additionally, it proposes case-mix 
methodology refinements to be implemented for home health services 
beginning on or after January 1, 2020, including a change in the unit 
of payment from 60-day episodes of care to 30-day periods of care, as 
required by section 51001 of the BBA of 2018; includes information on 
the implementation of temporary transitional payments for home infusion 
therapy services for CYs 2019 and 2020, as required by section 50401 of 
the BBA of 2018; solicits comments regarding payment for home infusion 
therapy services for CY 2021 and subsequent years; proposes health and 
safety standards for home infusion therapy; and proposes an 
accreditation and oversight process for home infusion therapy 
suppliers. This rule proposes changes to the Home Health Value-Based 
Purchasing (HHVBP) Model to remove two OASIS-based measures, replace 
three OASIS-based measures with two new proposed composite measures, 
rescore the maximum number of improvement points, and reweight the 
measures in the applicable measures set. Also, the Home Health Quality 
Reporting Program provisions include a discussion of the Meaningful 
Measures Initiative and propose the removal of seven measures to 
further the priorities of this initiative. In addition, the HH QRP 
offers a discussion on social risk factors and an update on 
implementation efforts for certain provisions of the IMPACT Act. This 
proposed rule clarifies the regulatory text to note that not all OASIS 
data is required for the HH QRP. Finally, it would require that 
accrediting organization surveyors take CMS-provided training.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on August 31, 2018.

ADDRESSES: In commenting, please refer to file code CMS-1689-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three 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 ``Submit a 
comment'' instructions.
    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-1689-P, P.O. Box 8013, 
Baltimore, MD 21244-8013. 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-1689-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: For general information about the Home 
Health Prospective Payment System (HH PPS), send your inquiry via email 
to: <a href="/cdn-cgi/l/email-protection#a0e8cfcdc5c8c5c1ccd4c8f0cfccc9c3d9e0c3cdd38ec8c8d38ec7cfd6"><span class="__cf_email__" data-cfemail="d79fb8bab2bfb2b6bba3bf87b8bbbeb4ae97b4baa4f9bfbfa4f9b0b8a1">[email protected]</span></a>.
    For general information about home infusion payment, send your 
inquiry via email to: <a href="/cdn-cgi/l/email-protection#e8a087858da1868e9d9b818786b88784818b91a88b859bc680809bc68f879e"><span class="__cf_email__" data-cfemail="3c7453515975525a494f5553526c5350555f457c5f514f1254544f125b534a">[email protected]</span></a>.
    For information about the Home Health Value-Based Purchasing 
(HHVBP) Model, send your inquiry via email to: 
<a href="/cdn-cgi/l/email-protection#d29a9a849082a3a7b7a1a6bbbdbca192b1bfa1fcbabaa1fcb5bda4"><span class="__cf_email__" data-cfemail="1058584652406165756364797f7e6350737d633e7878633e777f66">[email protected]</span></a>.
    For information about the Home Health Quality Reporting Program (HH 
QRP) contact: Joan Proctor, (410) 786-0949.
    For information about home infusion therapy health and safety 
standards, contact: Sonia Swancy, (410) 786-8445 or CAPT Jacqueline 
Leach, (410) 786-4282.
    For information about health infusion therapy accreditation and 
oversight, contact: Caroline Gallaher (410) 786-8705.

SUPPLEMENTARY INFORMATION: 
    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 
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to 
view public comments.

Table of Contents

I. Executive Summary
    A. Purpose
    B. Summary of the Major Provisions
    C. Summary of Costs and Benefits
    D. Improving Patient Outcomes and Reducing Burden Through 
Meaningful Measures
II. Background
    A. Statutory Background
    B. Current System for Payment of Home Health Services
    C. Updates to the Home Health Prospective Payment System
    D. Advancing Health Information Exchange
III. Payment Under the Home Health Prospective Payment System (HH 
PPS)
    A. Monitoring for Potential Impacts--Affordable Care Act 
Rebasing Adjustments
    B. Proposed CY 2019 HH PPS Case-Mix Weights

[[Page 32341]]

    C. Proposed CY 2019 Home Health Payment Rate Update
    D. Proposed Rural Add-On Payments for CYs 2019 Through 2022
    E. Proposed Payments for High-Cost Outliers Under the HH PPS
    F. Proposed Implementation of the Patient-Driven Groupings Model 
(PDGM) for CY 2020
    G. Proposed Regulations Text Changes Regarding Certifying and 
Recertifying Patient Eligibility for Medicare Home Health Services
    H. The Role of Remote Patient Monitoring Under the Medicare Home 
Health Benefit
IV. Home Health Value-Based Purchasing (HHVBP) Model
    A. Background
    B. Quality Measures
    C. Performance Scoring Methodology
    D. Update on the Public Display of Total Performance Scores
V. Home Health Quality Reporting Program (HH QRP)
    A. Background and Statutory Authority
    B. General Considerations Used for the Selection of Quality 
Measures for the HH QRP
    C. Proposed Removal Factors for Previously Adopted HH QRP 
Measures
    D. Quality Measures Currently Adopted for the HH QRP
    E. Proposed Removal of HH QRP Measures Beginning With the CY 
2021 HH QRP
    F. IMPACT Act Implementation Update
    G. Form, Manner, and Timing of OASIS Data Submission
    H. Proposed Policies Regarding Public Display for the HH QRP
    I. HHCAHPS
VI. Medicare Coverage of Home Infusion Therapy Services
    A. General Background
    B. Proposed Health and Safety Standards for Home Infusion 
Therapy
    C. Payment for Home Infusion Therapy Services
    D. Approval and Oversight of Accrediting Organizations for Home 
Infusion Therapy (HIT) Suppliers
VII. Changes to the Accreditation Requirements for Certain Medicare 
Certified Providers and Suppliers
    A. Background
    B. Proposed Changes to Certain Requirements for Medicare-
Certified Providers and Suppliers at Part 488
VIII. Requests for Information
    A. Request for Information on Promoting Interoperability and 
Electronic Healthcare Information Exchange Through Possible 
Revisions to the CMS Patient Health and Safety Requirements for 
Hospitals and Other Medicare- and Medicaid-Participating Providers 
and Suppliers
    B. Request for Information on Price Transparency: Improving 
Beneficiary Access to Home Health Agency Charge Information
IX. Collection of Information Requirements
    A. Wage Estimates
    B. ICRs Regarding the OASIS
    C. ICRs Regarding Home Infusion Therapy
    D. ICRs Regarding the Approval and Oversight of Accrediting 
Organizations for Home Infusion Therapy
X. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. Anticipated Effects
    D. Detailed Economic Analysis
    E. Alternatives Considered
    F. Accounting Statement and Tables
    G. Regulatory Reform Analysis Under E.O. 13771
    H. Conclusion
Regulation Text

I. Executive Summary

A. Purpose

1. Home Health Prospective Payment System (HH PPS)
    This proposed rule would update the payment rates for home health 
agencies (HHAs) for calendar year (CY) 2019, as required under section 
1895(b) of the Social Security Act (the Act). This proposed rule would 
also update the case-mix weights under section 1895(b)(4)(A)(i) and 
(b)(4)(B) of the Act for CY 2019. For home health services beginning on 
or after January 1, 2020, this rule proposes case-mix methodology 
refinements, which eliminate the use of therapy thresholds for case-mix 
adjustment purposes; and proposes to change the unit of payment from a 
60-day episode of care to a 30-day period of care, as mandated by 
section 51001 of the Bipartisan Budget Act of 2018 (Pub. L. 115-123) 
(hereinafter referred to as the ``BBA of 2018''). This proposed rule 
also: Proposes the methodology used to determine rural add-on payments 
for CYs 2019 through 2022, as required by section 50208 of the BBA of 
2018; proposes regulations text changes regarding certifying and 
recertifying patient eligibility for Medicare home health services 
under sections 1814(a) and 1835(a) of the Act; and proposes to define 
``remote patient monitoring'' under the Medicare home health benefit 
and to include the costs of such monitoring as an allowable 
administrative cost. Lastly, this rule proposes changes to the Home 
Health Value Based Purchasing (HHVBP) Model under the authority of 
section 1115A of the Act, and the Home Health Quality Reporting Program 
(HH QRP) requirements under the authority of section 1895(b)(3)(B)(v) 
of the Act.
2. Home Infusion Therapy Services
    This proposed rule would establish a transitional payment for home 
infusion therapy services for CYs 2019 and 2020, as required by section 
50401 of the BBA of 2018. In addition, this rule proposes health and 
safety standards for home infusion therapy, proposes an accreditation 
and oversight process for qualified home infusion therapy suppliers, 
and solicits comments regarding payment for the home infusion therapy 
services benefit for CY 2021 and subsequent years, as required by 
section 5012 of the 21st Century Cures Act (Pub. L. 114-255).
3. Safety Standards for Home Infusion Therapy Services
    This proposed rule would establish health and safety standards for 
qualified home infusion therapy suppliers as required by Section 5012 
of the 21st Century Cures Act. These proposed standards would establish 
a foundation for ensuring patient safety and quality care by 
establishing requirements for the plan of care to be initiated and 
updated by a physician; 7-day-a-week, 24-hour-a-day access to services 
and remote monitoring; and patient education and training regarding 
their home infusion therapy care.

B. Summary of the Major Provisions

1. Home Health Prospective Payment System (HH PPS)
    Section III.A. of this rule discusses our efforts to monitor for 
potential impacts due to the rebasing adjustments implemented in CY 
2014 through CY 2017, as mandated by section 3131(a) of the Patient 
Protection and Affordable Care Act of 2010 (Pub. L. 111-148, enacted 
March 23, 2010) as amended by the Health Care and Education 
Reconciliation Act of 2010 (Pub. L. 111-152, enacted March 30, 2010), 
collectively referred to as the ``Affordable Care Act''. In the CY 2015 
HH PPS final rule (79 FR 66072), we finalized our proposal to 
recalibrate the case-mix weights every year with the most current and 
complete data available at the time of rulemaking. In section III.B of 
this rule, we are recalibrating the HH PPS case-mix weights, using the 
most current cost and utilization data available, in a budget-neutral 
manner. In section III.C., we propose to rebase the home health market 
basket and update the payment rates under the HH PPS by the home health 
payment update percentage of 2.1 percent (using the proposed 2016-based 
Home Health Agency (HHA) market basket update of 2.8 percent, minus 0.7 
percentage point for multifactor productivity) as required by section 
1895(b)(3)(B)(vi)(I) of the Act. Also in section III.C. of this 
proposed rule, we propose to decrease the labor-related share from 78.5 
to 76.1 percent of total costs on account of the rebasing of the home 
health market basket. Lastly, in

[[Page 32342]]

section III.C. of this rule, we propose to update the CY 2019 home 
health wage index using FY 2015 hospital cost report data. In section 
III.D. of this proposed rule, we are proposing a new methodology for 
applying rural add-on payments for CYs 2019 through 2022, as required 
by section 50208 of the BBA of 2018. In section III.E. of this rule, we 
are proposing to reduce the fixed-dollar loss ratio from 0.55 to 0.51 
for CY 2019 in order to increase outlier payments as a percentage of 
total payments so that this percentage is closer to, but no more than, 
2.5 percent.
    In the CY 2018 HH PPS proposed rule, CMS proposed an alternative 
case-mix model, called the Home Health Groupings Model (HHGM). 
Ultimately the HHGM, including a proposed change in the unit of payment 
from 60 days to 30 days, was not finalized in the CY 2018 HH PPS final 
rule in order to allow CMS additional time to consider public comments 
for potential refinements to the model and other alternative case-mix 
models (82 FR 51676). In section III.F. of this proposed rule, we are 
again proposing to implement case-mix methodology refinements and a 
change in the unit of payment from a 60-day episode of care to a 30-day 
period of care; however, these changes would be effective January 1, 
2020 and would be implemented in a budget neutral manner, as required 
by section 51001 of the BBA of 2018. Since the proposed case-mix 
methodology refinements represent a more patient-driven approach to 
payment we are renaming the proposed case-mix adjustment methodology 
refinements, formerly known as the Home Health Groupings Model or 
``HHGM'', as the ``Patient-Driven Groupings Model'' or PDGM. The 
proposed PDGM relies more heavily on clinical characteristics and other 
patient information to place patients into meaningful payment 
categories and eliminates the use of therapy service thresholds, as 
required by section 51001(a)(3) of the BBA of 2018, that are currently 
used to case-mix adjust payments under the HH PPS. There is also a 
proposal regarding how CMS would determine whether 30-day periods of 
care are subject to a Low-Utilization Payment Adjustment (LUPA). The 
LUPA add-on policy, the partial episode payment adjustment policy, and 
the methodology used to calculate payments for high-cost outliers would 
remain unchanged except for occurring on a 30-day basis rather than a 
60-day basis.
    In section III.G. of this proposed rule, we are proposing 
regulation text changes at 42 CFR 424.22(b)(2) to eliminate the 
requirement that the certifying physician must estimate how much longer 
skilled services will be needed as part of the recertification 
statement. In addition, in section III.G of this rule, consistent with 
section 51002 of the BBA of 2018, we are proposing to align the 
regulations text at 42 CFR 424.22(c) with current subregulatory 
guidance to allow medical record documentation from the HHA to be used 
to support the basis for certification and/or recertification of home 
health eligibility, if certain requirements are met.
    In section III.H. of this proposed rule, we propose to define 
``remote patient monitoring'' under the Medicare home health benefit as 
the collection of physiologic data (for example, ECG, blood pressure, 
glucose monitoring) digitally stored and/or transmitted by the patient 
and/or caregiver to the HHA. Additionally in this section of the rule, 
we propose changes to the regulations at 42 CFR 409.46 to include costs 
of remote patient monitoring as allowable administrative costs.
2. Home Health Value Based Purchasing
    In section IV of this proposed rule, we are proposing changes to 
the Home Health Value Based Purchasing (HHVBP) Model implemented 
January 1, 2016. We are proposing, beginning with performance year (PY) 
4, to: Remove two Outcome and Assessment Information Set (OASIS) based 
measures, Influenza Immunization Received for Current Flu Season and 
Pneumococcal Polysaccharide Vaccine Ever Received, from the set of 
applicable measures; replace three OASIS-based measures (Improvement in 
Ambulation-Locomotion, Improvement in Bed Transferring, and Improvement 
in Bathing) with two proposed composite measures on total normalized 
composite change in self-care and mobility; change how we calculate the 
Total Performance Scores by changing the weighting methodology for the 
OASIS-based, claims-based, and HHCAHPS measures; and change the scoring 
methodology by reducing the maximum amount of improvement points an HHA 
could earn, from 10 points to 9 points. While we are not making a 
specific proposal at this time, we are also providing an update on the 
progress towards developing public reporting of performance under the 
HHVBP Model and seeking comment on what information should be made 
publicly available.
3. Home Health Quality Reporting Program
    In section V. of this proposed rule, we are proposing to update our 
policy for removing previously adopted Home Health (HH) Quality 
Reporting Program (QRP) measures and to adopt eight measure removal 
factors to align with other QRPs, to remove seven measures beginning 
with the CY 2021 HH QRP, and to update our regulations to clarify that 
not all OASIS data is required for the HH QRP. We are also providing an 
update on the implementation of certain provisions of the IMPACT Act, 
and a discussion of accounting for social risk factors in the HH QRP. 
Finally, we are proposing to increase the number of years of data used 
to calculate the Medicare Spending per Beneficiary measure for purposes 
of display from 1 year to 2 years.
4. Home Infusion Therapy
    In section VI.A. of this proposed rule, we discuss general 
background of home infusion therapy services and how that will relate 
to the implementation of the new home infusion benefit. In section 
VI.B. of this proposed rule, we are proposing to add a new subpart I 
under the regulations at 42 CFR part 486 to incorporate health and 
safety requirements for home infusion therapy suppliers. The proposed 
regulations would provide a framework for CMS to approve home infusion 
therapy accreditation organizations. Proposed subpart I would include 
General Provisions (Scope and Purpose, and Definitions) and Standards 
for Home Infusion Therapy (Plan of Care and Required Services). In 
section VI.C. of this proposed rule, we include information on 
temporary transitional payments for home infusion therapy services for 
CYs 2019 and 2020 as mandated by section 50401 of the BBA of 2018, and 
solicits comments on the proposed regulatory definition of ``Infusion 
Drug Administration Calendar Day''. Also in section VI.C. of this 
proposed rule, we solicit comments regarding payment for home infusion 
therapy services for CY 2021 and subsequent years as required by 
section 5012(d) of the 21st Century Cures Act.
    In section VI.D. of this proposed rule, we discuss the requirements 
set forth in section 1861(iii)(3)(D)(III) of the Act, which mandates 
that suppliers of home infusion therapy receive accreditation from a 
CMS-approved Accrediting Organization (AO) in order to receive Medicare 
payment. The Secretary must designate AOs to accredit suppliers 
furnishing Home Infusion therapy (HIT) not later than January 1, 2021. 
Qualified

[[Page 32343]]

HIT suppliers are required to receive accreditation before receiving 
Medicare payment for services provided to Medicare beneficiaries.
    At this time, no regulations exist to address the following 
elements of CMS' approval and oversight of the AOs that accredit 
suppliers of Home Infusion Therapy: (1) The required components to be 
included in a Home Infusion Therapy AO's initial or renewal 
accreditation program application; (2) regulations related to CMS' 
review and approval of the Home Infusion Therapy AOs application for 
approval of its accreditation program; and (3) the ongoing monitoring 
and oversight of CMS-approved Home Infusion Therapy AOs. Therefore in 
this rule, we propose to establish a set of regulations that will 
govern the CMS approval and oversight process for all HIT AOs.
    We also propose to modify the regulations for oversight for AOs 
that accredit any Medicare-certified providers and suppliers at 42 CFR 
488.5 by adding a requirement that the AOs must include a statement 
with their application acknowledging that all AO surveyors are required 
to complete the relevant program specific CMS online trainings 
initially, and thereafter, consistent with requirements established by 
CMS for state and federal surveyors. We would also add another 
requirement at Sec.  488.5 that would require the AOs for Medicare 
certified providers and suppliers to provide a written statement with 
their application stating that if a fully accredited and facility 
deemed to be in good-standing provides written notification that they 
wish to voluntarily withdraw from the AO's CMS-approved accreditation 
program, the AO must continue the facility's current accreditation 
until the effective date of withdrawal identified by the facility or 
the expiration date of the term of accreditation, whichever comes 
first.

C. Summary of Costs, Transfers, and Benefits

                               Table 1--Summary of Costs, Transfers, and Benefits
----------------------------------------------------------------------------------------------------------------
        Provision description           Costs and cost savings         Transfers                 Benefits
----------------------------------------------------------------------------------------------------------------
CY 2019 HH PPS Payment Rate Update...  .......................  The overall economic     To ensure home health
                                                                 impact of the HH PPS     payments are
                                                                 payment rate update is   consistent with
                                                                 an estimated $400        statutory payment
                                                                 million (2.1 percent)    authority for CY 2019.
                                                                 in increased payments
                                                                 to HHAs in CY 2019.
CY 2019 Temporary Transitional         .......................  The overall economic     To ensure temporary
 Payments for Home Infusion Therapy                              impact of the            transitional payments
 Services.                                                       temporary transitional   for home infusion
                                                                 payment for home         therapy are consistent
                                                                 infusion therapy         with statutory
                                                                 services is an           authority for CY 2019.
                                                                 estimated $60 million
                                                                 in increased payments
                                                                 to home infusion
                                                                 therapy suppliers in
                                                                 CY 2019.
CY 2019 HHVBP Model..................  .......................  The overall economic
                                                                 impact of the HHVBP
                                                                 Model provision for CY
                                                                 2018 through 2022 is
                                                                 an estimated $378
                                                                 million in total
                                                                 savings from a
                                                                 reduction in
                                                                 unnecessary
                                                                 hospitalizations and
                                                                 SNF usage as a result
                                                                 of greater quality
                                                                 improvements in the HH
                                                                 industry (none of
                                                                 which is attributable
                                                                 to the changes
                                                                 proposed in this
                                                                 proposed rule). As for
                                                                 payments to HHAs,
                                                                 there are no aggregate
                                                                 increases or decreases
                                                                 expected to be applied
                                                                 to the HHAs competing
                                                                 in the model.
CY 2020 OASIS Changes................  The overall economic     .......................  A reduction in burden
                                        impact of the HH QRP                              to HHAs of
                                        and the case-mix                                  approximately 73 hours
                                        adjustment methodology                            annually for a savings
                                        changes is annual                                 of approximately
                                        savings to HHAs of an                             $5,150 annually per
                                        estimated $60 million.                            HHA.
CY 2020 Case-Mix Adjustment            .......................  The overall economic     To ensure home health
 Methodology Changes, Including a                                impact of the proposed   payments are
 Change in the Unit of Service from                              case-mix adjustment      consistent with
 60 to 30 days.                                                  methodology changes,     statutory payment
                                                                 including a change in    authority for CY 2020.
                                                                 the unit of service
                                                                 from 60 to 30 days,
                                                                 for CY 2020 results in
                                                                 no estimated dollar
                                                                 impact to HHAs, as
                                                                 section 51001(a) of
                                                                 the BBA of 2018
                                                                 requires such change
                                                                 to be implemented in a
                                                                 budget-neutral manner.

[[Page 32344]]

 
Accreditation for Home Infusion        .......................  The cost related to an
 Therapy suppliers.                                              AO obtaining CMS
                                                                 approval of a home
                                                                 infusion therapy
                                                                 accreditation program
                                                                 is estimated to be
                                                                 $8,014.50 per each AO,
                                                                 for AOs that have
                                                                 previously submitted
                                                                 an accreditation
                                                                 application to CMS.
                                                                 The cost across the
                                                                 potential 6 home
                                                                 infusion therapy AOs
                                                                 would be $48,087.
                                                                The cost related to
                                                                 each home infusion
                                                                 therapy AO for
                                                                 obtaining CMS approval
                                                                 of a home infusion
                                                                 therapy accreditation
                                                                 program is estimated
                                                                 to be $12,453 per each
                                                                 AO, for AOs that have
                                                                 not previously
                                                                 submitted an
                                                                 accreditation
                                                                 application to CMS.
                                                                 The cost across the
                                                                 potential 6 home
                                                                 infusion therapy AOs
                                                                 would be $74,718.
                                                                We further estimate
                                                                 that each home
                                                                 infusion therapy AO
                                                                 would incur an
                                                                 estimated cost burden
                                                                 in the amount of
                                                                 $23,258 for compliance
                                                                 with the proposed home
                                                                 infusion therapy AO
                                                                 approval and oversight
                                                                 regulations at Sec.
                                                                 Sec.   488.1010
                                                                 through 488.1050
                                                                 (including the filing
                                                                 of an application).
                                                                 The cost across the 6
                                                                 potential home
                                                                 infusion therapy AOs
                                                                 would be $139,548.
----------------------------------------------------------------------------------------------------------------

D. Improving Patient Outcomes and Reducing Burden Through Meaningful 
Measures

    Regulatory reform and reducing regulatory burden are high 
priorities for us. To reduce the regulatory burden on the healthcare 
industry, lower health care costs, and enhance patient care, in October 
2017, we launched the Meaningful Measures Initiative.\1\ This 
initiative is one component of our agency-wide Patients Over Paperwork 
Initiative \2\ which is aimed at evaluating and streamlining 
regulations with a goal to reduce unnecessary cost and burden, increase 
efficiencies, and improve beneficiary experience. The Meaningful 
Measures Initiative is aimed at identifying the highest priority areas 
for quality measurement and quality improvement in order to assess the 
core quality of care issues that are most vital to advancing our work 
to improve patient outcomes. The Meaningful Measures Initiative 
represents a new approach to quality measures that fosters operational 
efficiencies, and will reduce costs including, the collection and 
reporting burden while producing quality measurement that is more 
focused on meaningful outcomes.
---------------------------------------------------------------------------

    \1\ Meaningful Measures web page: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
    \2\ See Remarks by Administrator Seema Verma at the Health Care 
Payment Learning and Action Network (LAN) Fall Summit, as prepared 
for delivery on October 30, 2017 https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheet-items/2017-10-30.html.
---------------------------------------------------------------------------

    The Meaningful Measures Framework has the following objectives:
    <bullet> Address high-impact measure areas that safeguard public 
health;
    <bullet> Patient-centered and meaningful to patients;
    <bullet> Outcome-based where possible;
    <bullet> Fulfill each program's statutory requirements;
    <bullet> Minimize the level of burden for health care providers 
(for example, through a preference for EHR-based measures where 
possible, such as electronic clinical quality measures);
    <bullet> Provide significant opportunity for improvement;
    <bullet> Address measure needs for population based payment through 
alternative payment models; and
    <bullet> Align across programs and/or with other payers.
    In order to achieve these objectives, we have identified 19 
Meaningful Measures areas and mapped them to six overarching quality 
priorities as shown in Table 2:

    Table 2--Meaningful Measures Framework Domains and Measure Areas
------------------------------------------------------------------------
            Quality priority                 Meaningful measure area
------------------------------------------------------------------------
Making Care Safer by Reducing Harm       Healthcare-Associated
 Caused in the Delivery of Care.          Infections.
                                         Preventable Healthcare Harm.

[[Page 32345]]

 
Strengthen Person and Family Engagement  Care is Personalized and
 as Partners in Their Care.               Aligned with Patient's Goals.
                                         End of Life Care according to
                                          Preferences.
                                         Patient's Experience of Care.
                                         Patient Reported Functional
                                          Outcomes.
Promote Effective Communication and      Medication Management.
 Coordination of Care.                   Admissions and Readmissions to
                                          Hospitals.
                                         Transfer of Health Information
                                          and Interoperability.
Promote Effective Prevention and         Preventive Care.
 Treatment of Chronic Disease.           Management of Chronic
                                          Conditions.
                                         Prevention, Treatment, and
                                          Management of Mental Health.
                                         Prevention and Treatment of
                                          Opioid and Substance Use
                                          Disorders.
                                         Risk Adjusted Mortality.
Work with Communities to Promote Best    Equity of Care.
 Practices of Healthy Living.            Community Engagement.
Make Care Affordable...................  Appropriate Use of Healthcare.
                                         Patient-focused Episode of
                                          Care.
                                         Risk Adjusted Total Cost of
                                          Care.
------------------------------------------------------------------------

    By including Meaningful Measures in our programs, we believe that 
we can also address the following cross-cutting measure criteria:
    <bullet> Eliminating disparities;
    <bullet> Tracking measurable outcomes and impact;
    <bullet> Safeguarding public health;
    <bullet> Achieving cost savings;
    <bullet> Improving access for rural communities; and
    <bullet> Reducing burden.
    We believe that the Meaningful Measures Initiative will improve 
outcomes for patients, their families, and health care providers while 
reducing burden and costs for clinicians and providers and promoting 
operational efficiencies.

II. Background

A. Statutory Background

1. Home Health Prospective Payment System
a. Background
    The Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33, enacted 
August 5, 1997), significantly changed the way Medicare pays for 
Medicare home health services. Section 4603 of the BBA mandated the 
development of the HH PPS. Until the implementation of the HH PPS on 
October 1, 2000, HHAs received payment under a retrospective 
reimbursement system.
    Section 4603(a) of the BBA mandated the development of a HH PPS for 
all Medicare-covered home health services provided under a plan of care 
(POC) that were paid on a reasonable cost basis by adding section 1895 
of the Act, entitled ``Prospective Payment For Home Health Services.'' 
Section 1895(b)(1) of the Act requires the Secretary to establish a HH 
PPS for all costs of home health services paid under Medicare. Section 
1895(b)(2) of the Act requires that, in defining a prospective payment 
amount, the Secretary will consider an appropriate unit of service and 
the number, type, and duration of visits provided within that unit, 
potential changes in the mix of services provided within that unit and 
their cost, and a general system design that provides for continued 
access to quality services.
    Section 1895(b)(3)(A) of the Act requires the following: (1) The 
computation of a standard prospective payment amount that includes all 
costs for HH services covered and paid for on a reasonable cost basis, 
and that such amounts be initially based on the most recent audited 
cost report data available to the Secretary (as of the effective date 
of the 2000 final rule), and (2) the standardized prospective payment 
amount be adjusted to account for the effects of case-mix and wage 
levels among HHAs.
    Section 1895(b)(3)(B) of the Act requires the standard prospective 
payment amounts be annually updated by the home health applicable 
percentage increase. Section 1895(b)(4) of the Act governs the payment 
computation. Sections 1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act 
require the standard prospective payment amount to be adjusted for 
case-mix and geographic differences in wage levels. Section 
1895(b)(4)(B) of the Act requires the establishment of an appropriate 
case-mix change adjustment factor for significant variation in costs 
among different units of services.
    Similarly, section 1895(b)(4)(C) of the Act requires the 
establishment of wage adjustment factors that reflect the relative 
level of wages, and wage-related costs applicable to home health 
services furnished in a geographic area compared to the applicable 
national average level. Under section 1895(b)(4)(C) of the Act, the 
wage-adjustment factors used by the Secretary may be the factors used 
under section 1886(d)(3)(E) of the Act.
    Section 1895(b)(5) of the Act gives the Secretary the option to 
make additions or adjustments to the payment amount otherwise paid in 
the case of outliers due to unusual variations in the type or amount of 
medically necessary care. Section 3131(b)(2) of the Affordable Care Act 
revised section 1895(b)(5) of the Act so that total outlier payments in 
a given year would not exceed 2.5 percent of total payments projected 
or estimated. The provision also made permanent a 10 percent agency-
level outlier payment cap.
    In accordance with the statute, as amended by the BBA, we published 
a final rule in the July 3, 2000 Federal Register (65 FR 41128) to 
implement the HH PPS legislation. The July 2000 final rule established 
requirements for the new HH PPS for home health services as required by 
section 4603 of the BBA, as subsequently amended by section 5101 of the 
Omnibus Consolidated and Emergency Supplemental Appropriations Act for 
Fiscal Year 1999 (OCESAA), (Pub. L. 105-277, enacted October 21, 1998); 
and by sections 302, 305, and 306 of the Medicare, Medicaid, and SCHIP 
Balanced Budget Refinement Act of 1999, (BBRA) (Pub. L. 106-113, 
enacted November 29, 1999). The requirements include the implementation 
of a HH PPS for home health services, consolidated billing 
requirements, and a number of other related changes. The HH PPS 
described in that rule replaced the retrospective reasonable cost-based 
system that was used by Medicare for the payment of home health 
services under Part A and Part B. For a complete and full

[[Page 32346]]

description of the HH PPS as required by the BBA, see the July 2000 HH 
PPS final rule (65 FR 41128 through 41214).
    Section 5201(c) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 
109-171, enacted February 8, 2006) added new section 1895(b)(3)(B)(v) 
to the Act, requiring HHAs to submit data for purposes of measuring 
health care quality, and linking the quality data submission to the 
annual applicable payment percentage increase. This data submission 
requirement is applicable for CY 2007 and each subsequent year. If an 
HHA does not submit quality data, the home health market basket 
percentage increase is reduced by 2 percentage points. In the November 
9, 2006 Federal Register (71 FR 65884, 65935), we published a final 
rule to implement the pay-for-reporting requirement of the DRA, which 
was codified at Sec.  484.225(h) and (i) in accordance with the 
statute. The pay-for-reporting requirement was implemented on January 
1, 2007.
    The Affordable Care Act made additional changes to the HH PPS. One 
of the changes in section 3131 of the Affordable Care Act is the 
amendment to section 421(a) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173, 
enacted on December 8, 2003) as amended by section 5201(b) of the DRA. 
Section 421(a) of the MMA, as amended by section 3131 of the Affordable 
Care Act, requires that the Secretary increase, by 3 percent, the 
payment amount otherwise made under section 1895 of the Act, for HH 
services furnished in a rural area (as defined in section 1886(d)(2)(D) 
of the Act) with respect to episodes and visits ending on or after 
April 1, 2010, and before January 1, 2016.
    Section 210 of the Medicare Access and CHIP Reauthorization Act of 
2015 (Pub. L. 114-10) (MACRA) amended section 421(a) of the MMA to 
extend the 3 percent rural add-on payment for home health services 
provided in a rural area (as defined in section 1886(d)(2)(D) of the 
Act) through January 1, 2018. In addition, section 411(d) of MACRA 
amended section 1895(b)(3)(B) of the Act such that CY 2018 home health 
payments be updated by a 1 percent market basket increase. This year, 
section 50208(a)(1) of the BBA of 2018 again extended the rural add-on 
through the end of 2018. In addition, this section of the BBA of 2018 
made some important changes to the rural add-on for CYs 2019 through 
2022, to be discussed below.
b. Current System for Payment of Home Health Services
    Generally, Medicare currently makes payment under the HH PPS on the 
basis of a national, standardized 60-day episode payment rate that is 
adjusted for the applicable case-mix and wage index. The national, 
standardized 60-day episode rate includes the six home health 
disciplines (skilled nursing, home health aide, physical therapy, 
speech-language pathology, occupational therapy, and medical social 
services). Payment for non-routine supplies (NRS) is not part of the 
national, standardized 60-day episode rate, but is computed by 
multiplying the relative weight for a particular NRS severity level by 
the NRS conversion factor. Payment for durable medical equipment 
covered under the HH benefit is made outside the HH PPS payment system. 
To adjust for case-mix, the HH PPS uses a 153-category case-mix 
classification system to assign patients to a home health resource 
group (HHRG). The clinical severity level, functional severity level, 
and service utilization are computed from responses to selected data 
elements in the OASIS assessment instrument and are used to place the 
patient in a particular HHRG. Each HHRG has an associated case-mix 
weight which is used in calculating the payment for an episode. Therapy 
service use is measured by the number of therapy visits provided during 
the episode and can be categorized into nine visit level categories (or 
thresholds): 0 to 5; 6; 7 to 9; 10; 11 to 13; 14 to 15; 16 to 17; 18 to 
19; and 20 or more visits.
    For episodes with four or fewer visits, Medicare pays national per-
visit rates based on the discipline(s) providing the services. An 
episode consisting of four or fewer visits within a 60-day period 
receives what is referred to as a low-utilization payment adjustment 
(LUPA). Medicare also adjusts the national standardized 60-day episode 
payment rate for certain intervening events that are subject to a 
partial episode payment adjustment (PEP adjustment). For certain cases 
that exceed a specific cost threshold, an outlier adjustment may also 
be available.
c. Updates to the Home Health Prospective Payment System
    As required by section 1895(b)(3)(B) of the Act, we have 
historically updated the HH PPS rates annually in the Federal Register. 
The August 29, 2007 final rule with comment period set forth an update 
to the 60-day national episode rates and the national per-visit rates 
under the HH PPS for CY 2008. The CY 2008 HH PPS final rule included an 
analysis performed on CY 2005 home health claims data, which indicated 
a 12.78 percent increase in the observed case-mix since 2000. Case-mix 
represents the variations in conditions of the patient population 
served by the HHAs. Subsequently, a more detailed analysis was 
performed on the 2005 case-mix data to evaluate if any portion of the 
12.78 percent increase was associated with a change in the actual 
clinical condition of home health patients. We identified 8.03 percent 
of the total case-mix change as real, and therefore, decreased the 
12.78 percent of total case-mix change by 8.03 percent to get a final 
nominal case-mix increase measure of 11.75 percent (0.1278 * (1-0.0803) 
= 0.1175).
    To account for the changes in case-mix that were not related to an 
underlying change in patient health status, we implemented a reduction, 
over 4 years, to the national, standardized 60-day episode payment 
rates. That reduction was to be 2.75 percent per year for 3 years 
beginning in CY 2008 and 2.71 percent for the fourth year in CY 2011. 
In the CY 2011 HH PPS final rule (76 FR 68532), we updated our analyses 
of case-mix change and finalized a reduction of 3.79 percent, instead 
of 2.71 percent, for CY 2011 and deferred finalizing a payment 
reduction for CY 2012 until further study of the case-mix change data 
and methodology was completed.
    In the CY 2012 HH PPS final rule (76 FR 68526), we updated the 60-
day national episode rates and the national per-visit rates. In 
addition, as discussed in the CY 2012 HH PPS final rule (76 FR 68528), 
our analysis indicated that there was a 22.59 percent increase in 
overall case-mix from 2000 to 2009 and that only 15.76 percent of that 
overall observed case-mix percentage increase was due to real case-mix 
change. As a result of our analysis, we identified a 19.03 percent 
nominal increase in case-mix. At that time, to fully account for the 
19.03 percent nominal case-mix growth identified from 2000 to 2009, we 
finalized a 3.79 percent payment reduction in CY 2012 and a 1.32 
percent payment reduction for CY 2013.
    In the CY 2013 HH PPS final rule (77 FR 67078), we implemented the 
1.32 percent reduction to the payment rates for CY 2013 finalized the 
previous year, to account for nominal case-mix growth from 2000 through 
2010. When taking into account the total measure of case-mix change 
(23.90 percent) and the 15.97 percent of total case-mix change 
estimated as real from 2000 to 2010, we obtained a final nominal case-
mix change measure of 20.08 percent from

[[Page 32347]]

2000 to 2010 (0.2390 * (1 - 0.1597) = 0.2008). To fully account for the 
remainder of the 20.08 percent increase in nominal case-mix beyond that 
which was accounted for in previous payment reductions, we estimated 
that the percentage reduction to the national, standardized 60-day 
episode rates for nominal case-mix change would be 2.18 percent. 
Although we considered proposing a 2.18 percent reduction to account 
for the remaining increase in measured nominal case-mix, we finalized 
the 1.32 percent payment reduction to the national, standardized 60-day 
episode rates in the CY 2012 HH PPS final rule (76 FR 68532). Section 
3131(a) of the Affordable Care Act added new section 1895(b)(3)(A)(iii) 
to the Act, which required that, beginning in CY 2014, we apply an 
adjustment to the national, standardized 60-day episode rate and other 
amounts that reflect factors such as changes in the number of visits in 
an episode, the mix of services in an episode, the level of intensity 
of services in an episode, the average cost of providing care per 
episode, and other relevant factors. Additionally, we were required to 
phase in any adjustment over a 4-year period in equal increments, not 
to exceed 3.5 percent of the payment amount (or amounts) as of the date 
of enactment of the Affordable Care Act in 2010, and fully implement 
the rebasing adjustments by CY 2017. Therefore, in the CY 2014 HH PPS 
final rule (78 FR 72256) for each year, CY 2014 through CY 2017, we 
finalized a fixed-dollar reduction to the national, standardized 60-day 
episode payment rate of $80.95 per year, increases to the national per-
visit payment rates per year, and a decrease to the NRS conversion 
factor of 2.82 percent per year. We also finalized three separate LUPA 
add-on factors for skilled nursing, physical therapy, and speech-
language pathology and removed 170 diagnosis codes from assignment to 
diagnosis groups in the HH PPS Grouper. In the CY 2015 HH PPS final 
rule (79 FR 66032), we implemented the second year of the 4-year phase-
in of the rebasing adjustments to the HH PPS payment rates and made 
changes to the HH PPS case-mix weights. In addition, we simplified the 
face-to-face encounter regulatory requirements and the therapy 
reassessment timeframes.
    In the CY 2016 HH PPS final rule (80 FR 68624), we implemented the 
third year of the 4-year phase-in of the rebasing adjustments to the 
national, standardized 60-day episode payment amount, the national per-
visit rates and the NRS conversion factor (as discussed previously). In 
the CY 2016 HH PPS final rule, we also recalibrated the HH PPS case-mix 
weights, using the most current cost and utilization data available, in 
a budget-neutral manner and finalized reductions to the national, 
standardized 60-day episode payment rate in CY 2016, CY 2017, and CY 
2018 of 0.97 percent in each year to account for estimated case-mix 
growth unrelated to increases in patient acuity (that is, nominal case-
mix growth) between CY 2012 and CY 2014. Finally, section 421(a) of the 
MMA, as amended by section 210 of the MACRA, extended the payment 
increase of 3 percent for HH services provided in rural areas (as 
defined in section 1886(d)(2)(D) of the Act) to episodes or visits 
ending before January 1, 2018.
    In the CY 2017 HH PPS final rule (81 FR 76702), we implemented the 
last year of the 4-year phase-in of the rebasing adjustments to the 
national, standardized 60-day episode payment amount, the national per-
visit rates and the NRS conversion factor (as outlined previously). We 
also finalized changes to the methodology used to calculate outlier 
payments under the authority of section 1895(b)(5) of the Act. Lastly, 
in accordance with section 1834(s) of the Act, as added by section 
504(a) of the Consolidated Appropriations Act, 2016 (Pub. L. 114-113, 
enacted December 18, 2015), we implemented changes in payment for 
furnishing Negative Pressure Wound Therapy (NPWT) using a disposable 
device for patients under a home health plan of care for which payment 
would otherwise be made under section 1895(b) of the Act.
2. Home Infusion Therapy
    Section 5012 of the 21st Century Cures Act (``the Cures Act'') 
(Pub. L. 114-255), which amended sections 1861(s)(2) and 1861(iii) of 
the Act, established a new Medicare home infusion therapy benefit. The 
Medicare home infusion therapy benefit covers the professional services 
including nursing services furnished in accordance with the plan of 
care, patient training and education (not otherwise covered under the 
durable medical equipment benefit), remote monitoring, and monitoring 
services for the provision of home infusion therapy and home infusion 
drugs furnished by a qualified home infusion therapy supplier. This 
benefit will ensure consistency in coverage for home infusion benefits 
for all Medicare beneficiaries. Section 50401 of the BBA of 2018 
amended section 1834(u) of the Act by adding a new paragraph (7) that 
establishes a home infusion therapy services temporary transitional 
payment for eligible home infusion suppliers for certain items and 
services furnished in coordination with the furnishing of transitional 
home infusion drugs beginning January 1, 2019. This temporary payment 
covers the cost of the same items and services, as defined in section 
1861(iii)(2)(A) and (B) of the Act, related to the administration of 
home infusion drugs. The temporary transitional payment would begin on 
January 1, 2019 and end the day before the full implementation of the 
home infusion therapy benefit on January 1, 2021, as required by 
section 5012 of the 21st Century Cures Act.
    Home infusion therapy is a treatment option for patients with a 
wide range of acute and chronic conditions, ranging from bacterial 
infections to more complex conditions such as late-stage heart failure 
and immune deficiencies. Home infusion therapy affords a patient 
independence and better quality of life, because it is provided in the 
comfort of the patient's home at a time that best fits his or her 
needs. This is significant, because generally patients can return to 
their daily activities after they receive their infusion treatments 
and, in many cases, they can continue their activities while receiving 
their treatments. In addition, home infusion therapy can provide 
improved safety and better outcomes. The home has been shown to be a 
safe setting for patients to receive infusion therapy.\3\ Additionally, 
patients receiving treatment outside of the hospital setting may be at 
lower risk of hospital-acquired infections, which can be more difficult 
to treat because of multi-drug resistance than those that are 
community-acquired. This is particularly important for vulnerable 
patients such as those who are immunocompromised, as hospital-acquired 
infections are increasingly caused by antibiotic-resistant pathogens.
---------------------------------------------------------------------------

    \3\ Bhole, M.V., Burton, J., & Chapel, H.M., (2008). Self-
infusion programs for immunoglobulin replacement at home: 
Feasibility, safety and efficacy. Immunology and Allergy Clinics of 
North America, 28(4), 821-832. doi:10.1016/j.iac.2008.06.005.
    Souayah, N., Hasan, A., Khan, H., et al. (2011). The safety 
profile of home infusion of intravenous immunoglobulin in patients 
with neuroimmunologic disorders. Journal of Clinical Neuromuscular 
Disease, 12(supp 4), S1-10. doi: 10.1097/CND.0b013e3182212589.
---------------------------------------------------------------------------

    Infusion therapy typically means that a drug is administered 
intravenously, but the term may also refer to situations where drugs 
are provided through other non-oral routes, such as intramuscular 
injections and epidural routes (into the membranes surrounding the 
spinal cord). Diseases that may require infusion therapy include 
infections that are unresponsive to oral antibiotics, cancer and 
cancer-related pain,

[[Page 32348]]

dehydration, and gastrointestinal diseases or disorders which prevent 
normal functioning of the gastrointestinal system. Other conditions 
treated with specialty infusion therapies may include some forms of 
cancers, congestive heart failure, Crohn's Disease, hemophilia, 
hepatitis, immune deficiencies, multiple sclerosis and rheumatoid 
arthritis. Infusion therapy originates with a prescription order from a 
physician or another qualified prescriber who is overseeing the care of 
the patient. The prescription order is sent to a home infusion therapy 
supplier, which is a state-licensed pharmacy, physician, or other 
provider of services or suppliers licensed by the state.
    A 2010 Government Accountability Office (GAO) report (10-426) found 
that most health insurers rely on credentialing, accreditation, or both 
to help ensure that plan members receive quality home infusion services 
from their network suppliers.\4\ Home infusion AOs conduct on-site 
surveys to evaluate all components of the service, including medical 
equipment, nursing, and pharmacy. Accreditation standards can include 
such requirements as the CMS Conditions of Participation for home 
health services, other Federal government regulations, and industry 
best practices. All of the accreditation standards evaluate a range of 
provider competencies, such as having a complete plan of care, response 
to adverse events, and implementation of a quality improvement plan.
---------------------------------------------------------------------------

    \4\ https://www.gao.gov/assets/310/305261.pdf.
---------------------------------------------------------------------------

    Sections 1861(iii)(3)(D)(III) and 1834(u)(5) of the Act, as amended 
by section 5012 of the Cures Act requires that, in order to participate 
in Medicare, home infusion therapy suppliers must select a CMS-approved 
AO and undergo an accreditation review process to demonstrate that the 
home infusion therapy program meets the accreditation organization's 
standards. Section 1861(iii) of the Act, as amended by section 5012 of 
the Cures Act, sets forth standards in three areas: (1) Ensuring that 
all patients have a plan of care established and updated by a physician 
that sets out the care and prescribed infusion therapy necessary to 
meet the patient-specific needs, (2) having procedures to ensure that 
remote monitoring services associated with administering infusion drugs 
in a patient's home are provided, and (3) having procedures to ensure 
that patients receive education and training on the effective use of 
medications and equipment in the home.

D. Advancing Health Information Exchange

    The Department of Health and Human Services (HHS) has a number of 
initiatives designed to encourage and support the adoption of 
interoperable health information technology and to promote nationwide 
health information exchange to improve health care. The Office of the 
National Coordinator for Health Information Technology (ONC) and CMS 
work collaboratively to advance interoperability across settings of 
care, including post-acute care.
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(Pub. L. 113-185) (IMPACT Act) requires assessment data to be 
standardized and interoperable to allow for exchange of the data among 
post-acute providers and other providers. To further interoperability 
in post-acute care, CMS is developing a Data Element Library to serve 
as a publically available centralized, authoritative resource for 
standardized data elements and their associated mappings to health IT 
standards. These interoperable data elements can reduce provider burden 
by allowing the use and reuse of healthcare data, support provider 
exchange of electronic health information for care coordination, 
person-centered care, and support real-time, data driven, clinical 
decision making. Once available, standards in the Data Element Library 
can be referenced on the CMS website and in the ONC Interoperability 
Standards Advisory (ISA).
    The 2018 Interoperability Standards Advisory (ISA) is available at: 
https://www.healthit.gov/standards-advisory.
    Most recently, the 21st Century Cures Act (Pub. L. 114-255), 
enacted in 2016, requires HHS to take new steps to enable the 
electronic sharing of health information ensuring interoperability for 
providers and settings across the care continuum. Specifically, 
Congress directed ONC to ``develop or support a trusted exchange 
framework, including a common agreement among health information 
networks nationally.'' This framework (https://beta.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement) 
outlines a common set of principles for trusted exchange and minimum 
terms and conditions for trusted exchange in order to enable 
interoperability across disparate health information networks. In 
another important provision, Congress defined ``information blocking'' 
as practices likely to interfere with, prevent, or materially 
discourage access, exchange, or use of electronic health information, 
and established new authority for HHS to discourage these practices. We 
invite providers to learn more about these important developments and 
how they are likely to affect HHAs.

III. Proposed Provisions for Payment Under the Home Health Prospective 
Payment System (HH PPS)

A. Monitoring for Potential Impacts--Affordable Care Act Rebasing 
Adjustments

1. Analysis of FY 2016 HHA Cost Report Data
    As part of our efforts in monitoring the potential impacts of the 
rebasing adjustments finalized in the CY 2014 HH PPS final rule (78 FR 
72293), we continue to update our analysis of home health cost report 
and claims data. Previous years' cost report and claims data analyses 
and results can be found in the CY 2018 HH PPS proposed rule (82 FR 
35277-35278). For this proposed rule, we analyzed the 2016 HHA cost 
report data (the most recent, complete data available at the time of 
this proposed rule) and 2016 HHA claims data to obtain the average 
number of visits per episode that match to the year of cost report data 
analyzed. To determine the 2016 average cost per visit per discipline, 
we applied the same trimming methodology outlined in the CY 2014 HH PPS 
proposed rule (78 FR 40284) and weighted the costs per visit from the 
2016 cost reports by size, facility type, and urban/rural location so 
the costs per visit were nationally representative according to 2016 
claims data. The 2016 average number of visits was taken from 2016 
claims data. We estimated the cost of a 60-day episode in CY 2016 to be 
$2,538.54 using 2016 cost report data (Table 2). However, the national, 
standardized 60-day episode payment amount in CY 2016 was $2,965.12. 
The difference between the 60-day episode payment rate and average cost 
per episode of care for CY 2016 was 16.8 percent.

[[Page 32349]]



                                    Table 2--2016 Estimated Cost per Episode
----------------------------------------------------------------------------------------------------------------
                                   2016 Average    2016 Average    2016 Average    2016 Average
           Discipline                costs per     NRS costs per  cost + NRS per     number of      2016 60-Day
                                       visit           visit           visit          visits       episode costs
----------------------------------------------------------------------------------------------------------------
Skilled Nursing.................         $132.83           $3.41         $136.24            8.81       $1,200.27
Physical Therapy................          156.04            3.41          159.45            5.58          889.73
Occupational Therapy............          153.53            3.41          156.94            1.56          244.83
Speech Pathology................          170.06            3.41          173.47            0.32           55.51
Medical Social Services.........          219.73            3.41          223.14            0.14           31.24
Home Health Aides...............           60.50            3.41           63.91            1.83          116.96
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............  ..............           18.24        2,538.54
----------------------------------------------------------------------------------------------------------------
Source: Medicare cost reports pulled in March 2018 and Medicare claims data from 2015 and 2016 for episodes
  (excluding low-utilization payment adjusted episodes and partial-episode-payment adjusted episodes), linked to
  OASIS assessments for episodes ending in CY 2016.

2. Analysis of CY 2017 HHA Claims Data
    In the CY 2014 HH PPS final rule (78 FR 72256), some commenters 
expressed concern that the rebasing of the HH PPS payment rates would 
result in HHA closures and would therefore diminish access to home 
health services. In addition to examining more recent cost report data, 
for this proposed rule we examined home health claims data from all 
four years during which rebasing adjustments were made (CY 2014, CY 
2015, CY 2016, and CY 2017), the first calendar year of the HH PPS (CY 
2001), and claims data for the year prior to the implementation of the 
rebasing adjustments (CY 2013). Preliminary analysis of CY 2017 home 
health claims data indicates that the number of episodes decreased by 
5.3 percent and the number of home health users that received at least 
one episode of care decreased by 3.2 percent from 2016 to 2017, while 
the number of FFS beneficiaries decreased 0.1 percent from 2016 to 
2017. Between 2013 and 2014 there appears to be a net decrease in the 
number of HHAs billing Medicare for home health services of 1.6 
percent, a continued decrease of 1.7 percent from 2014 to 2015, a 
decrease of 3.4 percent from 2015 to 2016, and a decrease of 4.4 
percent from 2016 to 2017. We note that in CY 2016 there were 2.9 HHAs 
per 10,000 FFS beneficiaries and 2.8 HHAs per 10,000 FFS beneficiaries 
in CY 2017, which remains markedly higher than the 1.9 HHAs per 10,000 
FFS beneficiaries close to the inception of the HH PPS in 2001 (the HH 
PPS was implemented on October 1, 2000). The number of home health 
users, as a percentage of FFS beneficiaries, has decreased from 9.0 
percent in 2013 to 8.4 percent in 2017.

                                          Table 3--Home Health Statistics, CY 2001 and CY 2013 Through CY 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2001            2013            2014            2015            2016            2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of episodes......................................       3,896,502       6,708,923       6,451,283       6,340,932       6,294,234       5,963,780
Beneficiaries receiving at least 1 episode (Home Health        2,412,318       3,484,579       3,381,635       3,365,512       3,350,174       3,242,346
 Users).................................................
Part A and/or B FFS beneficiaries.......................      34,899,167      38,505,609      38,506,534      38,506,534      38,555,150      38,509,031
Episodes per Part A and/or B FFS beneficiaries..........            0.11            0.17            0.17            0.17            0.16            0.15
Home health users as a percentage of Part A and/or B FFS            6.9%            9.0%            8.8%            8.8%            8.7%            8.4%
 beneficiaries..........................................
HHAs providing at least 1 episode.......................           6,511          11,889          11,693          11,381          11,102          10,612
HHAs per 10,000 Part A and/or B FFS beneficiaries.......             1.9             3.1             3.0             3.0             2.9             2.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)--Accessed on May 14, 2014 and August 19, 2014 for CY 2013
  data; accessed on May 7, 2015 for CY 2001 and CY 2014 data; accessed on April 7, 2016 for CY 2015 data; accessed on March 20, 2017 for CY 2016 data;
  accessed on March 8, 2018 for CY 2017 data; and Medicare enrollment information obtained from the CCW Master Beneficiary Summary File. Beneficiaries
  are the total number of beneficiaries in a given year with at least 1 month of Part A and/or Part B Fee-for-Service coverage without having any months
  of Medicare Advantage coverage.
Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50 States and
  District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ``0''
  (``Non-payment/zero claims'') and ``2'' (``Interim--first claim'') are excluded. If a beneficiary is treated by providers from multiple states within
  a year the beneficiary is counted within each state's unique number of beneficiaries served.

    In addition to examining home health claims data from all four 
years of the implementation of rebasing adjustments required by the 
Affordable Care Act, we examined trends in home health utilization for 
all years starting in CY 2001 and up through CY 2017. Figure 1, 
displays the average number of visits per 60-day episode of care and 
the average payment per visit. While the average payment per visit has 
steadily increased from approximately $116 in CY 2001 to $170 for CY 
2017, the average total number of visits per 60-day episode of care has 
declined, most notably between CY 2009 (21.7 visits per episode) and CY 
2010 (19.8 visits per episode), which was the first year that the 10 
percent agency-level cap on HHA outlier payments was implemented. The 
average of total visits per episode has steadily decreased from 21.7 in 
2009 to 17.9 in 2017.
BILLING CODE 4120-01-P

[[Page 32350]]

<GRAPHIC><TIFF>TP12JY18.000

BILLING CODE 4120-01-C
    Figure 2 displays the average number of visits by discipline type 
for a 60-day episode of care and shows that while the number of therapy 
visits per 60-day episode of care has increased steadily, the number of 
skilled nursing and home health aide visits have decreased between CY 
2009 and CY 2017. The results of the Report to Congress, ``Medicare 
Home Health Study: An Investigation on Access to Care and Payment for 
Vulnerable Patient Populations'', required by section 3131(d) of the 
Affordable Care Act, suggests that the current home health payment 
system may discourage HHAs from serving patients with clinically 
complex and/or poorly controlled chronic conditions who do not qualify 
for therapy but require a large number of skilled nursing visits.\5\ 
The home health study results seem to be consistent with the recent 
trend in the decreased number of visits per episode of care driven by 
decreases in skilled nursing and home health aide services evident in 
Figures 1 and 2.
---------------------------------------------------------------------------

    \5\ Report to Congress Medicare Home Health Study: An 
Investigation on Access to Care and Payment for Vulnerable Patient 
Populations (2014). Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/HH-Report-to-Congress.pdf.

---------------------------------------------------------------------------

[[Page 32351]]

<GRAPHIC><TIFF>TP12JY18.001

    As part of our monitoring efforts, we also examined the trends in 
episode timing and service use over time. Specifically, we examined the 
percentage of early episodes with 0 to 19 therapy visits, late episodes 
with 0 to 19 therapy visits, and episodes with 20+ therapy visits from 
CY 2008 to CY 2017. In CY 2008, we implemented refinements to the HH 
PPS case-mix system. As part of those refinements, we added additional 
therapy thresholds and differentiated between early and late episodes 
for those episodes with less than 20+ therapy visits. Early episodes 
are defined as the 1st or 2nd episode in a sequence of adjacent covered 
episodes. Late episodes are defined as the 3rd and subsequent episodes 
in a sequence of adjacent covered episodes. Table 4 shows that the 
percentage of early and late episodes from CY 2008 to CY 2017 has 
remained relatively stable over time. There has been a decrease in the 
percentage of early episodes with 0 to 19 therapy visits from 65.9 
percent in CY 2008 to 61.3 percent in CY 2017 and a slight increase in 
the percentage of late episodes with 0 to 19 therapy visits from 29.5 
percent in CY 2008 to 31.2 percent in CY 2017. In 2015, the case-mix 
weights for the third and later episodes of care with 0 to 19 therapy 
visits decreased as a result of the CY 2015 recalibration of the case-
mix weights. Despite the decreases in the case-mix weights for the 
later episodes, the percentage of late episodes with 0 to 19 therapy 
visits did not change substantially. However, episode timing is not a 
variable in the determination of the case-mix weights for those 
episodes with 20+ therapy visits and the percentage of episodes with 
20+ therapy visits has increased from 4.6 percent in CY 2008 to 7.6 
percent in CY 2017.

[[Page 32352]]



                                        Table 4--Home Health Episodes by Episode Timing, CY 2008 Through CY 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of      % of early    Number of late     % of late
                                                          early episodes     episodes        episodes        episodes        Number of     % of episodes
                  Year                     All episodes     (excluding      (excluding      (excluding      (excluding     episodes with     with 20+
                                                           episodes with   episodes with   episodes with   episodes with    20+ visits        visits
                                                            20+ visits)     20+ visits)     20+ visits)     20+ visits)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2008....................................       5,423,037       3,571,619            65.9       1,600,587            29.5         250,831             4.6
2009....................................       6,530,200       3,701,652            56.7       2,456,308            37.6         372,240             5.7
2010....................................       6,877,598       3,872,504            56.3       2,586,493            37.6         418,601             6.1
2011....................................       6,857,885       3,912,982            57.1       2,564,859            37.4         380,044             5.5
2012....................................       6,767,576       3,955,207            58.4       2,458,734            36.3         353,635             5.2
2013....................................       6,733,146       4,023,486            59.8       2,347,420            34.9         362,240             5.4
2014....................................       6,616,875       3,980,151            60.2       2,263,638            34.2         373,086             5.6
2015....................................       6,644,922       4,008,279            60.3       2,205,052            33.2         431,591             6.5
2016....................................       6,294,232       3,802,254            60.4       2,053,972            32.6         438,006             7.0
2017....................................       5,963,778       3,655,636            61.3       1,857,840            31.2         450,302             7.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)--Accessed on March 6, 2018.
Note(s): Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ``0'' (``Non-payment/zero
  claims'') and ``2'' (``Interim--first claim'') are excluded.

    We also examined trends in admission source for home health 
episodes over time. Specifically, we examined the admission source for 
the ``first or only'' episodes of care (first episodes in a sequence of 
adjacent episodes of care or the only episode of care) from CY 2008 
through CY 2017 (Figure 3). The percentage of first or only episodes 
with an acute admission source, defined as episodes with an inpatient 
hospital stay within the 14 days prior to a home health episode, has 
decreased from 38.6 percent in CY 2008 to 34.8 percent in CY 2017. The 
percentage of first or only episodes with a post-acute admission 
source, defined as episodes which had a stay at a skilled nursing 
facility (SNF), inpatient rehabilitation facility (IRF), or long term 
care hospital (LTCH) within 14 days prior to the home health episode, 
has slightly increased from 16.4 percent in CY 2008 to 17.6 percent in 
CY 2017. The percentage of first or only episodes with a community 
admission source, defined as episodes which did not have an acute or 
post-acute stay in the 14 days prior to the home health episode, 
increased from 37.4 percent in CY 2008 to 41.5 percent in CY 2017. Our 
findings on the trends in admission source show a similar pattern with 
MedPAC's as outlined in their 2015 Report to the Congress.\6\ MedPAC 
concluded that there has been tremendous growth in the use of home 
health for patients residing in the community (that is, episodes not 
preceded by a prior hospitalization) and that these episodes have more 
than doubled since 2001. However, MedPAC examined admission source 
trends from 2002 up through 2013 and included first and subsequent 
episodes of care, whereas CMS analysis, as described above, included 
``first or only'' episodes of care. Nonetheless, both analyses show a 
trend of increasing episodes of care without a preceding inpatient 
stay. MedPAC suggests there is significant potential for overuse, 
particularly since Medicare does not currently require any cost sharing 
for home health care.
---------------------------------------------------------------------------

    \6\ Medicare Payment Advisory Commission (MedPAC). ``Home Health 
Care Services.'' Report to the Congress: Medicare Payment Policy. 
Washington, DC, March 2015. P. 214. Accessed on 3/28/2017 at: http://www.medpac.gov/docs/default-source/reports/chapter-9-home-health-care-services-march-2015-report-.pdf?sfvrsn=0.

---------------------------------------------------------------------------

[[Page 32353]]

<GRAPHIC><TIFF>TP12JY18.002

    We will continue to monitor for potential impacts due to the 
rebasing adjustments required by section 3131(a) of the Affordable Care 
Act and other policy changes in the future. Independent effects of any 
one policy may be difficult to discern in years where multiple policy 
changes occur in any given year.

B. Proposed CY 2019 HH PPS Case-Mix Weights

    In the CY 2015 HH PPS final rule (79 FR 66072), we finalized a 
policy to annually recalibrate the HH PPS case-mix weights--adjusting 
the weights relative to one another--using the most current, complete 
data available. To recalibrate the HH PPS case-mix weights for CY 2018, 
we will use the same methodology finalized in the CY 2008 HH PPS final 
rule (72 FR 49762), the CY 2012 HH PPS final rule (76 FR 68526), and 
the CY 2015 HH PPS final rule (79 FR 66032). Annual recalibration of 
the HH PPS case-mix weights ensures that the case-mix weights reflect, 
as accurately as possible, current home health resource use and changes 
in utilization patterns.
    To generate the proposed CY 2019 HH PPS case-mix weights, we used 
CY 2017 home health claims data (as of March 2, 2018) with linked OASIS 
data. These data are the most current and complete data available at 
this time. We will use CY 2017 home health claims data (as of June 30, 
2018 or later) with linked OASIS data to generate the CY 2019 HH PPS 
case-mix weights in the CY 2019 HH PPS final rule. The process we used 
to calculate the HH PPS case-mix weights are outlined below.
    Step 1: Re-estimate the four-equation model to determine the 
clinical and functional points for an episode using wage-weighted 
minutes of care as our dependent variable for resource use. The wage-
weighted minutes of care are determined using the CY 2016 Bureau of 
Labor Statistics national hourly wage plus fringe rates for the six 
home health disciplines and the minutes per visit from the claim. The 
points for each of the variables for each leg of the model, updated 
with CY 2017 home health claims data, are shown in Table 5. The points 
for the clinical variables are added together to determine an episode's 
clinical score. The points for the functional variables are added 
together to determine an episode's functional score.
BILLING CODE 4120-01-P

[[Page 32354]]

<GRAPHIC><TIFF>TP12JY18.014


[[Page 32355]]


<GRAPHIC><TIF1>TP12JY18.015


[[Page 32356]]


<GRAPHIC><TIF2>TP12JY18.016

BILLING CODE 4120-01-C
    In updating the four-equation model for CY 2019, using 2017 home 
health claims data (the last update to the four-equation model for CY 
2018 used CY 2016 home health claims data), there were few changes to 
the point values for the variables in the four-equation model. These 
relatively minor changes reflect the change in the relationship between 
the grouper variables and resource use between CY 2016 and CY 2017. The 
CY 2019 four-equation model resulted in 113 point-giving variables 
being used in the model (as compared to the 119 variables for the CY 
2018 recalibration, which can be found in Table 2 of the CY 2018 HH PPS 
final rule (82 FR 51684)). There were 7 variables that were added to 
the model and 13 variables that were dropped from the model due to the 
absence of additional resources associated with the variable. Of the 
variables that were in both the four-equation model for CY 2019 and the 
four-equation model for CY 2018, the points for 10 variables increased 
in the CY 2019 four-equation model and the points for 67 variables 
decreased in the CY 2019 4-equation model. There were 29 variables with 
the same point values.
    Step 2: Re-defining the clinical and functional thresholds so they 
are reflective of the new points associated with the CY 2019 four-
equation model. After estimating the points for each of the variables 
and summing the clinical and functional points for each episode, we 
look at the distribution of the clinical score and functional score, 
breaking the episodes into different steps. The categorizations for the 
steps are as follows:
    <bullet> Step 1: First and second episodes, 0-13 therapy visits.
    <bullet> Step 2.1: First and second episodes, 14-19 therapy visits.
    <bullet> Step 2.2: Third episodes and beyond, 14-19 therapy visits.
    <bullet> Step 3: Third episodes and beyond, 0-13 therapy visits.
    <bullet> Step 4: Episodes with 20+ therapy visits.
    We then divide the distribution of the clinical score for episodes 
within a step such that a third of episodes are classified as low 
clinical score, a third of episodes are classified as medium clinical 
score, and a third of episodes are classified as high clinical score. 
The same approach is then done looking at the functional score. It was 
not always possible to evenly divide the episodes within each step into 
thirds due to many episodes being clustered around one particular 
score.\7\ Also, we looked at the average resource use associated with 
each clinical and functional score and used that as a guide for setting 
our thresholds. We grouped scores with similar average resource use 
within the same level (even if it meant that more or less than a third 
of episodes were placed within a level). The new thresholds, based off 
the CY 2019 four-equation model points are shown in Table 6.
---------------------------------------------------------------------------

    \7\ For Step 1, 41% of episodes were in the medium functional 
level (All with score 13).
    For Step 2.1, 86.7% of episodes were in the low functional level 
(Most with scores 6 to 7).
    For Step 2.2, 81.5% of episodes were in the low functional level 
(Most with score 0).
    For Step 3, 46.7% of episodes were in the medium functional 
level (Most with score 9).
    For Step 4, 29.9% of episodes were in the medium functional 
level (Most with score 6).

                                                                  Table 6--Proposed CY 2019 Clinical and Functional Thresholds
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          1st and 2nd Episodes                                       3rd+ Episodes                            All Episodes
                                                        ----------------------------------------------------------------------------------------------------------------------------------------
                                                           0 to 13  therapy visits    14 to 19  therapy visits    0 to 13  therapy visits    14 to 19  therapy visits     20+ therapy  visits
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Grouping Step                                            1.........................  2.........................  3........................  4........................  5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Equations used to calculate points                       1.........................  2.........................  3........................  4........................  (2&4)
(see Table 2)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dimension                           Severity Level       ..........................  ..........................  .........................  .........................  .........................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Clinical..........................  C1.................  0 to 1....................  0 to 1....................  0 to 1...................  0 to 1...................  0 to 3.
                                    C2.................  2 to 3....................  2 to 7....................  2........................  2 to 9...................  4 to 16.
                                    C3.................  4+........................  8+........................  3+.......................  10+......................  17+.
Functional........................  F1.................  0 to 12...................  0 to 7....................  0 to 6...................  0 to 2...................  0 to 2.
                                    F2.................  13........................  8 to 12...................  7 to 10..................  3 to 7...................  3 to 6.
                                    F3.................  14+.......................  13+.......................  11+......................  8+.......................  7+.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Step 3: Once the clinical and functional thresholds are determined 
and each episode is assigned a clinical and functional level, the 
payment regression is estimated with an episode's wage-weighted minutes 
of care as the dependent variable. Independent variables in the model 
are indicators for the step of the episode as well as the clinical and 
functional levels within each step of the episode. Like the four-
equation model, the payment regression model is also estimated with 
robust standard errors that are clustered at the beneficiary level. 
Table 7 shows the regression coefficients for the variables in the 
payment regression model updated with CY 2017 home

[[Page 32357]]

health claims data. The R-squared value for the payment regression 
model is 0.5508 (an increase from 0.5095 for the CY 2018 
recalibration).

                    Table 7--Payment Regression Model
------------------------------------------------------------------------
                                                              Payment
                                                            regression
                                                              from 4-
                                                          equation model
                                                            for CY 2019
------------------------------------------------------------------------
Step 1, Clinical Score Medium...........................          $21.81
Step 1, Clinical Score High.............................           54.06
Step 1, Functional Score Medium.........................           70.54
Step 1, Functional Score High...........................           99.78
Step 2.1, Clinical Score Medium.........................           50.90
Step 2.1, Clinical Score High...........................          118.77
Step 2.1, Functional Score Medium.......................           25.36
Step 2.1, Functional Score High.........................           31.96
Step 2.2, Clinical Score Medium.........................           48.03
Step 2.2, Clinical Score High...........................          187.73
Step 2.2, Functional Score Medium.......................           50.06
Step 2.2, Functional Score High.........................            0.00
Step 3, Clinical Score Medium...........................           18.05
Step 3, Clinical Score High.............................           83.67
Step 3, Functional Score Medium.........................           56.10
Step 3, Functional Score High...........................           81.90
Step 4, Clinical Score Medium...........................           70.97
Step 4, Clinical Score High.............................          245.97
Step 4, Functional Score Medium.........................            4.60
Step 4, Functional Score High...........................           17.77
Step 2.1, 1st and 2nd Episodes, 14 to 19 Therapy Visits.          515.04
Step 2.2, 3rd+ Episodes, 14 to 19 Therapy Visits........          510.26
Step 3, 3rd+ Episodes, 0-13 Therapy Visits..............          -60.34
Step 4, All Episodes, 20+ Therapy Visits................          895.79
Intercept...............................................          375.32
------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before
  December 31, 2017 (as of March 2, 2018) for which we had a linked
  OASIS assessment.

    Step 4: We use the coefficients from the payment regression model 
to predict each episode's wage-weighted minutes of care (resource use). 
We then divide these predicted values by the mean of the dependent 
variable (that is, the average wage-weighted minutes of care across all 
episodes used in the payment regression). This division constructs the 
weight for each episode, which is simply the ratio of the episode's 
predicted wage-weighted minutes of care divided by the average wage-
weighted minutes of care in the sample. Each episode is then aggregated 
into one of the 153 home health resource groups (HHRGs) and the ``raw'' 
weight for each HHRG was calculated as the average of the episode 
weights within the HHRG.
    Step 5: The raw weights associated with 0 to 5 therapy visits are 
then increased by 3.75 percent, the weights associated with 14-15 
therapy visits are decreased by 2.5 percent, and the weights associated 
with 20+ therapy visits are decreased by 5 percent. These adjustments 
to the case-mix weights were finalized in the CY 2012 HH PPS final rule 
(76 FR 68557) and were done to address MedPAC's concerns that the HH 
PPS overvalues therapy episodes and undervalues non-therapy episodes 
and to better align the case-mix weights with episode costs estimated 
from cost report data.\8\
---------------------------------------------------------------------------

    \8\ Medicare Payment Advisory Commission (MedPAC), Report to the 
Congress: Medicare Payment Policy. March 2011, P. 176.
---------------------------------------------------------------------------

    Step 6: After the adjustments in step 5 are applied to the raw 
weights, the weights are further adjusted to create an increase in the 
payment weights for the therapy visit steps between the therapy 
thresholds. Weights with the same clinical severity level, functional 
severity level, and early/later episode status were grouped together. 
Then within those groups, the weights for each therapy step between 
thresholds are gradually increased. We do this by interpolating between 
the main thresholds on the model (from 0-5 to 14-15 therapy visits, and 
from 14-15 to 20+ therapy visits). We use a linear model to implement 
the interpolation so the payment weight increase for each step between 
the thresholds (such as the increase between 0-5 therapy visits and 6 
therapy visits and the increase between 6 therapy visits and 7-9 
therapy visits) are constant. This interpolation is identical to the 
process finalized in the CY 2012 HH PPS final rule (76 FR 68555).
    Step 7: The interpolated weights are then adjusted so that the 
average case-mix for the weights is equal to 1.0000.\9\ This last step 
creates the proposed CY 2019 case-mix weights shown in Table 8.
---------------------------------------------------------------------------

    \9\ When computing the average, we compute a weighted average, 
assigning a value of one to each normal episode and a value equal to 
the episode length divided by 60 for PEPs.

[[Page 32358]]



                               Table 8--Proposed Cy 2019 Case-Mix Payment Weights
----------------------------------------------------------------------------------------------------------------
                                                                     Clinical and  functional        Proposed
          Pay group                       Description             levels  (1 = low;  2 = medium;  weights for CY
                                                                             3 = high)                 2019
----------------------------------------------------------------------------------------------------------------
10111........................  1st and 2nd Episodes, 0 to 5       C1F1S1                                  0.5459
                                Therapy Visits.
10112........................  1st and 2nd Episodes, 6 Therapy    C1F1S2                                  0.6801
                                Visits.
10113........................  1st and 2nd Episodes, 7 to 9       C1F1S3                                  0.8143
                                Therapy Visits.
10114........................  1st and 2nd Episodes, 10 Therapy   C1F1S4                                  0.9485
                                Visits.
10115........................  1st and 2nd Episodes, 11 to 13     C1F1S5                                  1.0828
                                Therapy Visits.
10121........................  1st and 2nd Episodes, 0 to 5       C1F2S1                                  0.6485
                                Therapy Visits.
10122........................  1st and 2nd Episodes, 6 Therapy    C1F2S2                                  0.7691
                                Visits.
10123........................  1st and 2nd Episodes, 7 to 9       C1F2S3                                  0.8897
                                Therapy Visits.
10124........................  1st and 2nd Episodes, 10 Therapy   C1F2S4                                  1.0104
                                Visits.
10125........................  1st and 2nd Episodes, 11 to 13     C1F2S5                                  1.1310
                                Therapy Visits.
10131........................  1st and 2nd Episodes, 0 to 5       C1F3S1                                  0.6910
                                Therapy Visits.
10132........................  1st and 2nd Episodes, 6 Therapy    C1F3S2                                  0.8049
                                Visits.
10133........................  1st and 2nd Episodes, 7 to 9       C1F3S3                                  0.9189
                                Therapy Visits.
10134........................  1st and 2nd Episodes, 10 Therapy   C1F3S4                                  1.0328
                                Visits.
10135........................  1st and 2nd Episodes, 11 to 13     C1F3S5                                  1.1467
                                Therapy Visits.
10211........................  1st and 2nd Episodes, 0 to 5       C2F1S1                                  0.5776
                                Therapy Visits.
10212........................  1st and 2nd Episodes, 6 Therapy    C2F1S2                                  0.7194
                                Visits.
10213........................  1st and 2nd Episodes, 7 to 9       C2F1S3                                  0.8612
                                Therapy Visits.
10214........................  1st and 2nd Episodes, 10 Therapy   C2F1S4                                  1.0030
                                Visits.
10215........................  1st and 2nd Episodes, 11 to 13     C2F1S5                                  1.1448
                                Therapy Visits.
10221........................  1st and 2nd Episodes, 0 to 5       C2F2S1                                  0.6802
                                Therapy Visits.
10222........................  1st and 2nd Episodes, 6 Therapy    C2F2S2                                  0.8084
                                Visits.
10223........................  1st and 2nd Episodes, 7 to 9       C2F2S3                                  0.9366
                                Therapy Visits.
10224........................  1st and 2nd Episodes, 10 Therapy   C2F2S4                                  1.0648
                                Visits.
10225........................  1st and 2nd Episodes, 11 to 13     C2F2S5                                  1.1930
                                Therapy Visits.
10231........................  1st and 2nd Episodes, 0 to 5       C2F3S1                                  0.7227
                                Therapy Visits.
10232........................  1st and 2nd Episodes, 6 Therapy    C2F3S2                                  0.8442
                                Visits.
10233........................  1st and 2nd Episodes, 7 to 9       C2F3S3                                  0.9657
                                Therapy Visits.
10234........................  1st and 2nd Episodes, 10 Therapy   C2F3S4                                  1.0872
                                Visits.
10235........................  1st and 2nd Episodes, 11 to 13     C2F3S5                                  1.2087
                                Therapy Visits.
10311........................  1st and 2nd Episodes, 0 to 5       C3F1S1                                  0.6245
                                Therapy Visits.
10312........................  1st and 2nd Episodes, 6 Therapy    C3F1S2                                  0.7755
                                Visits.
10313........................  1st and 2nd Episodes, 7 to 9       C3F1S3                                  0.9264
                                Therapy Visits.
10314........................  1st and 2nd Episodes, 10 Therapy   C3F1S4                                  1.0774
                                Visits.
10315........................  1st and 2nd Episodes, 11 to 13     C3F1S5                                  1.2284
                                Therapy Visits.
10321........................  1st and 2nd Episodes, 0 to 5       C3F2S1                                  0.7271
                                Therapy Visits.
10322........................  1st and 2nd Episodes, 6 Therapy    C3F2S2                                  0.8645
                                Visits.
10323........................  1st and 2nd Episodes, 7 to 9       C3F2S3                                  1.0019
                                Therapy Visits.
10324........................  1st and 2nd Episodes, 10 Therapy   C3F2S4                                  1.1392
                                Visits.
10325........................  1st and 2nd Episodes, 11 to 13     C3F2S5                                  1.2766
                                Therapy Visits.
10331........................  1st and 2nd Episodes, 0 to 5       C3F3S1                                  0.7696
                                Therapy Visits.
10332........................  1st and 2nd Episodes, 6 Therapy    C3F3S2                                  0.9003
                                Visits.
10333........................  1st and 2nd Episodes, 7 to 9       C3F3S3                                  1.0310
                                Therapy Visits.
10334........................  1st and 2nd Episodes, 10 Therapy   C3F3S4                                  1.1617
                                Visits.
10335........................  1st and 2nd Episodes, 11 to 13     C3F3S5                                  1.2923
                                Therapy Visits.
21111........................  1st and 2nd Episodes, 14 to 15     C1F1S1                                  1.2170
                                Therapy Visits.
21112........................  1st and 2nd Episodes, 16 to 17     C1F1S2                                  1.3756
                                Therapy Visits.
21113........................  1st and 2nd Episodes, 18 to 19     C1F1S3                                  1.5342
                                Therapy Visits.
21121........................  1st and 2nd Episodes, 14 to 15     C1F2S1                                  1.2516
                                Therapy Visits.
21122........................  1st and 2nd Episodes, 16 to 17     C1F2S2                                  1.4008
                                Therapy Visits.
21123........................  1st and 2nd Episodes, 18 to 19     C1F2S3                                  1.5499
                                Therapy Visits.
21131........................  1st and 2nd Episodes, 14 to 15     C1F3S1                                  1.2607
                                Therapy Visits.
21132........................  1st and 2nd Episodes, 16 to 17     C1F3S2                                  1.4126
                                Therapy Visits.
21133........................  1st and 2nd Episodes, 18 to 19     C1F3S3                                  1.5646
                                Therapy Visits.
21211........................  1st and 2nd Episodes, 14 to 15     C2F1S1                                  1.2866
                                Therapy Visits.
21212........................  1st and 2nd Episodes, 16 to 17     C2F1S2                                  1.4535
                                Therapy Visits.
21213........................  1st and 2nd Episodes, 18 to 19     C2F1S3                                  1.6204
                                Therapy Visits.
21221........................  1st and 2nd Episodes, 14 to 15     C2F2S1                                  1.3212
                                Therapy Visits.
21222........................  1st and 2nd Episodes, 16 to 17     C2F2S2                                  1.4786
                                Therapy Visits.
21223........................  1st and 2nd Episodes, 18 to 19     C2F2S3                                  1.6361
                                Therapy Visits.
21231........................  1st and 2nd Episodes, 14 to 15     C2F3S1                                  1.3302
                                Therapy Visits.
21232........................  1st and 2nd Episodes, 16 to 17     C2F3S2                                  1.4905
                                Therapy Visits.
21233........................  1st and 2nd Episodes, 18 to 19     C2F3S3                                  1.6508
                                Therapy Visits.
21311........................  1st and 2nd Episodes, 14 to 15     C3F1S1                                  1.3793
                                Therapy Visits.
21312........................  1st and 2nd Episodes, 16 to 17     C3F1S2                                  1.5930
                                Therapy Visits.
21313........................  1st and 2nd Episodes, 18 to 19     C3F1S3                                  1.8067
                                Therapy Visits.
21321........................  1st and 2nd Episodes, 14 to 15     C3F2S1                                  1.4140
                                Therapy Visits.
21322........................  1st and 2nd Episodes, 16 to 17     C3F2S2                                  1.6182
                                Therapy Visits.

[[Page 32359]]

 
21323........................  1st and 2nd Episodes, 18 to 19     C3F2S3                                  1.8224
                                Therapy Visits.
21331........................  1st and 2nd Episodes, 14 to 15     C3F3S1                                  1.4230
                                Therapy Visits.
21332........................  1st and 2nd Episodes, 16 to 17     C3F3S2                                  1.6300
                                Therapy Visits.
21333........................  1st and 2nd Episodes, 18 to 19     C3F3S3                                  1.8371
                                Therapy Visits.
22111........................  3rd+ Episodes, 14 to 15 Therapy    C1F1S1                                  1.2104
                                Visits.
22112........................  3rd+ Episodes, 16 to 17 Therapy    C1F1S2                                  1.3713
                                Visits.
22113........................  3rd+ Episodes, 18 to 19 Therapy    C1F1S3                                  1.5321
                                Visits.
22121........................  3rd+ Episodes, 14 to 15 Therapy    C1F2S1                                  1.2789
                                Visits.
22122........................  3rd+ Episodes, 16 to 17 Therapy    C1F2S2                                  1.4189
                                Visits.
22123........................  3rd+ Episodes, 18 to 19 Therapy    C1F2S3                                  1.5589
                                Visits.
22131........................  3rd+ Episodes, 14 to 15 Therapy    C1F3S1                                  1.2789
                                Visits.
22132........................  3rd+ Episodes, 16 to 17 Therapy    C1F3S2                                  1.4248
                                Visits.
22133........................  3rd+ Episodes, 18 to 19 Therapy    C1F3S3                                  1.5706
                                Visits.
22211........................  3rd+ Episodes, 14 to 15 Therapy    C2F1S1                                  1.2761
                                Visits.
22212........................  3rd+ Episodes, 16 to 17 Therapy    C2F1S2                                  1.4465
                                Visits.
22213........................  3rd+ Episodes, 18 to 19 Therapy    C2F1S3                                  1.6169
                                Visits.
22221........................  3rd+ Episodes, 14 to 15 Therapy    C2F2S1                                  1.3445
                                Visits.
22222........................  3rd+ Episodes, 16 to 17 Therapy    C2F2S2                                  1.4942
                                Visits.
22223........................  3rd+ Episodes, 18 to 19 Therapy    C2F2S3                                  1.6438
                                Visits.
22231........................  3rd+ Episodes, 14 to 15 Therapy    C2F3S1                                  1.3445
                                Visits.
22232........................  3rd+ Episodes, 16 to 17 Therapy    C2F3S2                                  1.5000
                                Visits.
22233........................  3rd+ Episodes, 18 to 19 Therapy    C2F3S3                                  1.6555
                                Visits.
22311........................  3rd+ Episodes, 14 to 15 Therapy    C3F1S1                                  1.4670
                                Visits.
22312........................  3rd+ Episodes, 16 to 17 Therapy    C3F1S2                                  1.6515
                                Visits.
22313........................  3rd+ Episodes, 18 to 19 Therapy    C3F1S3                                  1.8360
                                Visits.
22321........................  3rd+ Episodes, 14 to 15 Therapy    C3F2S1                                  1.5355
                                Visits.
22322........................  3rd+ Episodes, 16 to 17 Therapy    C3F2S2                                  1.6992
                                Visits.
22323........................  3rd+ Episodes, 18 to 19 Therapy    C3F2S3                                  1.8629
                                Visits.
22331........................  3rd+ Episodes, 14 to 15 Therapy    C3F3S1                                  1.5355
                                Visits.
22332........................  3rd+ Episodes, 16 to 17 Therapy    C3F3S2                                  1.7050
                                Visits.
22333........................  3rd+ Episodes, 18 to 19 Therapy    C3F3S3                                  1.8746
                                Visits.
30111........................  3rd+ Episodes, 0 to 5 Therapy      C1F1S1                                  0.4581
                                Visits.
30112........................  3rd+ Episodes, 6 Therapy Visits..  C1F1S2                                  0.6086
30113........................  3rd+ Episodes, 7 to 9 Therapy      C1F1S3                                  0.7591
                                Visits.
30114........................  3rd+ Episodes, 10 Therapy Visits.  C1F1S4                                  0.9095
30115........................  3rd+ Episodes, 11 to 13 Therapy    C1F1S5                                  1.0600
                                Visits.
30121........................  3rd+ Episodes, 0 to 5 Therapy      C1F2S1                                  0.5397
                                Visits.
30122........................  3rd+ Episodes, 6 Therapy Visits..  C1F2S2                                  0.6876
30123........................  3rd+ Episodes, 7 to 9 Therapy      C1F2S3                                  0.8354
                                Visits.
30124........................  3rd+ Episodes, 10 Therapy Visits.  C1F2S4                                  0.9832
30125........................  3rd+ Episodes, 11 to 13 Therapy    C1F2S5                                  1.1310
                                Visits.
30131........................  3rd+ Episodes, 0 to 5 Therapy      C1F3S1                                  0.5772
                                Visits.
30132........................  3rd+ Episodes, 6 Therapy Visits..  C1F3S2                                  0.7176
30133........................  3rd+ Episodes, 7 to 9 Therapy      C1F3S3                                  0.8579
                                Visits.
30134........................  3rd+ Episodes, 10 Therapy Visits.  C1F3S4                                  0.9982
30135........................  3rd+ Episodes, 11 to 13 Therapy    C1F3S5                                  1.1385
                                Visits.
30211........................  3rd+ Episodes, 0 to 5 Therapy      C2F1S1                                  0.4844
                                Visits.
30212........................  3rd+ Episodes, 6 Therapy Visits..  C2F1S2                                  0.6427
30213........................  3rd+ Episodes, 7 to 9 Therapy      C2F1S3                                  0.8011
                                Visits.
30214........................  3rd+ Episodes, 10 Therapy Visits.  C2F1S4                                  0.9594
30215........................  3rd+ Episodes, 11 to 13 Therapy    C2F1S5                                  1.1178
                                Visits.
30221........................  3rd+ Episodes, 0 to 5 Therapy      C2F2S1                                  0.5660
                                Visits.
30222........................  3rd+ Episodes, 6 Therapy Visits..  C2F2S2                                  0.7217
30223........................  3rd+ Episodes, 7 to 9 Therapy      C2F2S3                                  0.8774
                                Visits.
30224........................  3rd+ Episodes, 10 Therapy Visits.  C2F2S4                                  1.0331
30225........................  3rd+ Episodes, 11 to 13 Therapy    C2F2S5                                  1.1888
                                Visits.
30231........................  3rd+ Episodes, 0 to 5 Therapy      C2F3S1                                  0.6035
                                Visits.
30232........................  3rd+ Episodes, 6 Therapy Visits..  C2F3S2                                  0.7517
30233........................  3rd+ Episodes, 7 to 9 Therapy      C2F3S3                                  0.8999
                                Visits.
30234........................  3rd+ Episodes, 10 Therapy Visits.  C2F3S4                                  1.0481
30235........................  3rd+ Episodes, 11 to 13 Therapy    C2F3S5                                  1.1963
                                Visits.
30311........................  3rd+ Episodes, 0 to 5 Therapy      C3F1S1                                  0.5798
                                Visits.
30312........................  3rd+ Episodes, 6 Therapy Visits..  C3F1S2                                  0.7573
30313........................  3rd+ Episodes, 7 to 9 Therapy      C3F1S3                                  0.9347
                                Visits.
30314........................  3rd+ Episodes, 10 Therapy Visits.  C3F1S4                                  1.1122
30315........................  3rd+ Episodes, 11 to 13 Therapy    C3F1S5                                  1.2896
                                Visits.
30321........................  3rd+ Episodes, 0 to 5 Therapy      C3F2S1                                  0.6614
                                Visits.
30322........................  3rd+ Episodes, 6 Therapy Visits..  C3F2S2                                  0.8362

[[Page 32360]]

 
30323........................  3rd+ Episodes, 7 to 9 Therapy      C3F2S3                                  1.0110
                                Visits.
30324........................  3rd+ Episodes, 10 Therapy Visits.  C3F2S4                                  1.1858
30325........................  3rd+ Episodes, 11 to 13 Therapy    C3F2S5                                  1.3607
                                Visits.
30331........................  3rd+ Episodes, 0 to 5 Therapy      C3F3S1                                  0.6989
                                Visits.
30332........................  3rd+ Episodes, 6 Therapy Visits..  C3F3S2                                  0.8662
30333........................  3rd+ Episodes, 7 to 9 Therapy      C3F3S3                                  1.0336
                                Visits.
30334........................  3rd+ Episodes, 10 Therapy Visits.  C3F3S4                                  1.2009
30335........................  3rd+ Episodes, 11 to 13 Therapy    C3F3S5                                  1.3682
                                Visits.
40111........................  All Episodes, 20+ Therapy Visits.  C1F1S1                                  1.6929
40121........................  All Episodes, 20+ Therapy Visits.  C1F2S1                                  1.6990
40131........................  All Episodes, 20+ Therapy Visits.  C1F3S1                                  1.7165
40211........................  All Episodes, 20+ Therapy Visits.  C2F1S1                                  1.7874
40221........................  All Episodes, 20+ Therapy Visits.  C2F2S1                                  1.7935
40231........................  All Episodes, 20+ Therapy Visits.  C2F3S1                                  1.8110
40311........................  All Episodes, 20+ Therapy Visits.  C3F1S1                                  2.0204
40321........................  All Episodes, 20+ Therapy Visits.  C3F2S1                                  2.0266
40331........................  All Episodes, 20+ Therapy Visits.  C3F3S1                                  2.0441
----------------------------------------------------------------------------------------------------------------

    To ensure the changes to the HH PPS case-mix weights are 
implemented in a budget neutral manner, we then apply a case-mix budget 
neutrality factor to the proposed CY 2019 national, standardized 60-day 
episode payment rate (see section III.C.3. of this proposed rule). The 
case-mix budget neutrality factor is calculated as the ratio of total 
payments when the CY 2019 HH PPS case-mix weights (developed using CY 
2017 home health claims data) are applied to CY 2017 utilization 
(claims) data to total payments when CY 2018 HH PPS case-mix weights 
(developed using CY 2016 home health claims data) are applied to CY 
2017 utilization data. This produces a case-mix budget neutrality 
factor for CY 2019 of 1.0163.

C. CY 2019 Home Health Payment Rate Update

1. Rebasing and Revising of the Home Health Market Basket
a. Background
    Section 1895(b)(3)(B) of the Act requires that the standard 
prospective payment amounts for CY 2019 be increased by a factor equal 
to the applicable home health market basket update for those HHAs that 
submit quality data as required by the Secretary. Effective for cost 
reporting periods beginning on or after July 1, 1980, we developed and 
adopted an HHA input price index (that is, the home health ``market 
basket''). Although ``market basket'' technically describes the mix of 
goods and services used to produce home health care, this term is also 
commonly used to denote the input price index derived from that market 
basket. Accordingly, the term ``home health market basket'' used in 
this document refers to the HHA input price index.
    The percentage change in the home health market basket reflects the 
average change in the price of goods and services purchased by HHAs in 
providing an efficient level of home health care services. We first 
used the home health market basket to adjust HHA cost limits by an 
amount that reflected the average increase in the prices of the goods 
and services used to furnish reasonable cost home health care. This 
approach linked the increase in the cost limits to the efficient 
utilization of resources. For a greater discussion on the home health 
market basket, see the notice with comment period published in the 
February 15, 1980 Federal Register (45 FR 10450, 10451), the notice 
with comment period published in the February 14, 1995 Federal Register 
(60 FR 8389, 8392), and the notice with comment period published in the 
July 1, 1996 Federal Register (61 FR 34344, 34347). Beginning with the 
FY 2002 HHA PPS payments, we used the home health market basket to 
update payments under the HHA PPS. We last rebased the home health 
market basket effective with the CY 2013 update (77 FR 67081).
    The home health market basket is a fixed-weight, Laspeyres-type 
price index. A Laspeyres-type price index measures the change in price, 
over time, of the same mix of goods and services purchased in the base 
period. Any changes in the quantity or mix of goods and services (that 
is, intensity) purchased over time are not measured.
    The index itself is constructed in three steps. First, a base 
period is selected (in this proposed rule, we are proposing to use 2016 
as the base period) and total base period expenditures are estimated 
for a set of mutually exclusive and exhaustive spending categories, 
with the proportion of total costs that each category represents being 
calculated. These proportions are called ``cost weights'' or 
``expenditure weights.'' Second, each expenditure category is matched 
to an appropriate price or wage variable, referred to as a ``price 
proxy.'' In almost every instance, these price proxies are derived from 
publicly available statistical series that are published on a 
consistent schedule (preferably at least on a quarterly basis). 
Finally, the expenditure weight for each cost category is multiplied by 
the level of its respective price proxy. The sum of these products 
(that is, the expenditure weights multiplied by their price index 
levels) for all cost categories yields the composite index level of the 
market basket in a given period. Repeating this step for other periods 
produces a series of market basket levels over time. Dividing an index 
level for a given period by an index level for an earlier period 
produces a rate of growth in the input price index over that timeframe.
    As noted previously, the market basket is described as a fixed-
weight index because it represents the change in price over time of a 
constant mix (quantity and intensity) of goods and services needed to 
provide HHA services. The effects on total expenditures resulting from 
changes in the mix of goods and services purchased

[[Page 32361]]

subsequent to the base period are not measured. For example, a HHA 
hiring more nurses to accommodate the needs of patients would increase 
the volume of goods and services purchased by the HHA, but would not be 
factored into the price change measured by a fixed-weight home health 
market basket. Only when the index is rebased would changes in the 
quantity and intensity be captured, with those changes being reflected 
in the cost weights. Therefore, we rebase the market basket 
periodically so that the cost weights reflect recent changes in the mix 
of goods and services that HHAs purchase (HHA inputs) to furnish 
inpatient care between base periods.
b. Rebasing and Revising the Home Health Market Basket
    We believe that it is desirable to rebase the home health market 
basket periodically so that the cost category weights reflect changes 
in the mix of goods and services that HHAs purchase in furnishing home 
health care. We based the cost category weights in the current home 
health market basket on CY 2010 data. We are proposing to rebase and 
revise the home health market basket to reflect 2016 Medicare cost 
report (MCR) data, the latest available and most complete data on the 
actual structure of HHA costs.
    The terms ``rebasing'' and ``revising,'' while often used 
interchangeably, denote different activities. The term ``rebasing'' 
means moving the base year for the structure of costs of an input price 
index (that is, in this exercise, we are proposing to move the base 
year cost structure from CY 2010 to CY 2016) without making any other 
major changes to the methodology. The term ``revising'' means changing 
data sources, cost categories, and/or price proxies used in the input 
price index.
    For this proposed rebasing and revising, we are rebasing the 
detailed wages and salaries and benefits cost weights to reflect 2016 
BLS Occupational Employment Statistics (OES) data on HHAs. The 2010-
based home health market basket used 2010 BLS OES data on HHAs. We are 
also proposing to break out the All Other (residual) cost category 
weight into more detailed cost categories, based on the 2007 Benchmark 
U.S. Department of Commerce, Bureau of Economic Analysis (BEA) Input-
Output (I-O) Table for HHAs. The 2010-based home health market basket 
used the 2002 I-O data. Finally, due to its small weight, we are 
proposing to eliminate the cost category `Postage' and include these 
expenses in the `All Other Services' cost weight.
c. Derivation of the Proposed 2016-Based Home Health Market Basket Cost 
Weights
    The major cost weights for this proposed revised and rebased home 
health market basket are derived from the Medicare Cost Reports (MCR; 
CMS Form 1728-94) data for freestanding HHAs whose cost reporting 
period began on or after October 1, 2015 and before October 1, 2016. Of 
the 2016 Medicare cost reports for freestanding HHAs, approximately 84 
percent of the reports had a begin date on January 1, 2016, 
approximately 6 percent had a begin date on July 1, 2016, and 
approximately 4 percent had a begin date on October 1, 2015. Using this 
methodology allowed our sample to include HHAs with varying cost report 
years including, but not limited to, the Federal fiscal or calendar 
year. We refer to the market basket as a calendar year market basket 
because the base period for all price proxies and weights are set to CY 
2016.
    We propose to maintain our policy of using data from freestanding 
HHAs, which account for over 90 percent of HHAs (82 FR 35383), because 
we have determined that they better reflect HHAs' actual cost 
structure. Expense data for hospital-based HHAs can be affected by the 
allocation of overhead costs over the entire institution.
    We are proposing to derive eight major expense categories (Wages 
and Salaries, Benefits, Contract Labor, Transportation, Professional 
Liability Insurance (PLI), Fixed Capital, Movable Capital, and a 
residual ``All Other'') from the 2016 Medicare HHA cost reports. Due to 
its small weight, we are proposing to eliminate the cost category 
`Postage' and include these expenses in the ``All Other (residual)'' 
cost weight. These major expense categories are based on those cost 
centers that are reimbursable under the HHA PPS, specifically Skilled 
Nursing Care, Physical Therapy, Occupational Therapy, Speech Pathology, 
Medical Social Services, Home Health Aide, and Supplies. These are the 
same cost centers that were used in the 2014 base payment rebasing (78 
FR 72276), which are described in the Abt Associates Inc. June 2013, 
Technical Paper, ``Analyses In Support of Rebasing and Updating 
Medicare Home Health Payment Rates'' (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/Analyses-in-Support-of-Rebasing-and-Updating-the-Medicare-Home-Health-Payment-Rates-Technical-Report.pdf). Total costs for the HHA PPS reimbursable 
services reflect overhead allocation. We provide detail on the 
calculations for each major expense category.
    (1) Wages and Salaries: Wages and Salaries costs reflect direct 
patient care wages and salaries costs as well as wages and salaries 
costs associated with Plant Operations and Maintenance, Transportation, 
and Administrative and General. Specifically, we are proposing to 
calculate Wages and Salaries by summing costs from Worksheet A, column 
1, lines 3 through 12 and subtracting line 5.03 (A&G Nonreimbursable 
costs).
    (2) Benefits: Benefits costs reflect direct patient care benefit 
costs as well as benefit costs associated with Plant Operations and 
Maintenance, Transportation, and Administrative and General. 
Specifically, we are proposing to calculate Benefits by summing costs 
from Worksheet A, column 2, lines 3 through 12 and subtracting line 
5.03 (A&G Nonreimbursable costs).
    (3) Direct Patient Care Contract Labor: Contract Labor costs 
reflect direct patient care contract labor. Specifically, we are 
proposing to calculate Contract Labor by summing costs from Worksheet 
A, column 4, lines 6 through 11.
    (4) Transportation: Transportation costs reflect direct patient 
care costs as well as transportation costs associated with Capital 
Expenses, Plant Operations and Maintenance, and Administrative and 
General. Specifically, we are proposing to calculate Transportation by 
summing costs from Worksheet A, column 3, lines 1 through 12 and 
subtracting line 5.03 (A&G Nonreimbursable costs).
    (5) Professional Liability Insurance: Professional Liability 
Insurance reflects premiums, paid losses, and self-insurance costs. 
Specifically we are proposing to calculate Professional Liability 
Insurance by summing costs from Worksheet S2, lines 27.01, 27.02 and 
27.03.
    (6) Fixed Capital: Fixed Capital-related costs reflect the portion 
of Medicare-allowable costs reported in ``Capital Related Buildings and 
Fixtures'' (Worksheet A, column 5, line 1). We calculate this Medicare 
allowable portion by first calculating a ratio for each provider that 
reflects fixed capital costs as a percentage of HHA reimbursable 
services. Specifically this ratio is calculated as the sum of costs 
from Worksheet B, column 1, lines 6 through 12 divided by the sum of 
costs from Worksheet B, column 1, line 1 minus lines 3 through 5. This 
percentage is then applied to the sum of the costs from Worksheet A, 
column 5, line 1.

[[Page 32362]]

    (7) Movable Capital: Movable Capital-related costs reflect the 
portion of Medicare-allowable costs reported in ``Capital Related 
Moveable Equipment'' (Worksheet A, column 5, line 2). We calculate this 
Medicare allowable portion by first calculating a ratio for each 
provider that reflects movable capital costs as a percentage of HHA 
reimbursable services. Specifically this ratio is calculated as the sum 
of costs from Worksheet B, column 2, lines 6 through 12 divided by the 
sum of costs from Worksheet B, column 2, line 2 minus lines 3 through 
5. This percentage is then applied to the sum of the costs from 
Worksheet A, column 5, line 2.
    (8) All Other (residual): The ``All Other'' cost weight is a 
residual, calculated by subtracting the major cost weight percentages 
(Wages and Salaries, Benefits, Direct Patient Care Contract Labor, 
Transportation, Professional Liability Insurance, Fixed Capital, and 
Movable Capital) from 1.
    As prescription drugs and DME are not payable under the HH PPS, we 
continue to exclude those items from the home health market basket. 
Totals within each of the major cost categories were edited to remove 
reports where the data were deemed unreasonable (for example, when 
total costs were not greater than zero). We then determined the 
proportion of total Medicare allowable costs that each category 
represents. For all of the major cost categories except the 
``residual'' All Other cost weight, we then removed those providers 
whose derived cost weights fall in the top and bottom five percent of 
provider-specific cost weights to ensure the removal of outliers. After 
the outliers were removed, we summed the costs for each category across 
all remaining providers. We then divided this by the sum of total 
Medicare allowable costs across all remaining providers to obtain a 
cost weight for the proposed 2016-based home health market basket for 
the given category.
    Table 9 shows the major cost categories and their respective cost 
weights as derived from the Medicare cost reports for this proposed 
rule.

Table 9--Major Cost Categories as Derived From the Medicare Cost Reports
------------------------------------------------------------------------
                                                          Proposed  2016
          Major cost categories             2010 based         based
------------------------------------------------------------------------
Wages and Salaries (including allocated             66.3            65.1
 direct patient care contract labor)....
Benefits (including allocated direct                12.2            10.9
 patient care contract labor)...........
Transportation..........................             2.5             2.6
Professional Liability Insurance                     0.4             0.3
 (Malpractice)..........................
Fixed Capital...........................             1.5             1.4
Moveable Capital........................             0.6             0.6
``All Other'' residual..................            16.5            19.0
------------------------------------------------------------------------
* Figures may not sum to 100.0 due to rounding.

    The decrease in the wages and salaries cost weight of 1.2 
percentage points and the decrease in the benefits cost weight of 1.3 
percentage points is attributable to both employed compensation and 
direct patient care contract labor costs as reported on the MCR data. 
Our analysis of the MCR data shows that the decrease in the 
compensation cost weight of 2.4 percentage points (calculated by 
combining wages and salaries and benefits) from 2010 to 2016 occurred 
among for-profit, nonprofit, and government providers and among 
providers serving only rural beneficiaries, only urban beneficiaries, 
or both rural and urban beneficiaries.
    Over the 2010 to 2016 time period, the average number of FTEs per 
provider decreased considerably. This corresponds with the HHA claims 
analysis published on page 35279 of the CY 2018 proposed rule (https://www.gpo.gov/fdsys/pkg/FR-2017-07-28/pdf/2017-15825.pdf), which shows 
that the number of visits per 60-day episode has decreased from 19.8 
visits in 2010 to 17.9 visits in 2016 for Medicare PPS. Medicare visits 
account for approximately 60 percent of total visits.
    The direct patient care contract labor costs are contract labor 
costs for skilled nursing, physical therapy, occupational therapy, 
speech therapy, and home health aide cost centers. We allocated these 
direct patient care contract labor costs to the Wages and Salaries and 
Benefits cost categories based on each provider's relative proportions 
of both employee wages and salaries and employee benefits costs. For 
example, the direct patient care contract labor costs that are 
allocated to wages and salaries is equal to: (A) The employee wages and 
salaries costs as a percent of the sum of employee wages and salaries 
costs and employee benefits costs times; and (B) direct patient care 
contract labor costs. Nondirect patient care contract labor costs (such 
as contract labor costs reported in the Administrative and General cost 
center of the MCR) are captured in the ``All Other'' residual cost 
weight and later disaggregated into more detail as described below. 
This is a similar methodology that was implemented for the 2010-based 
home health market basket.
    We further divide the ``All Other'' residual cost weight estimated 
from the 2016 Medicare cost report data into more detailed cost 
categories. To divide this cost weight we are proposing to use the 2007 
Benchmark I-O ``Use Tables/Before Redefinitions/Purchaser Value'' for 
NAICS 621600, Home Health Agencies, published by the BEA. These data 
are publicly available at http://www.bea.gov/industry/io_annual.htm. 
The BEA Benchmark I-O data are generally scheduled for publication 
every five years. The most recent data available at the time of 
rebasing was for 2007. The 2007 Benchmark I-O data are derived from the 
2007 Economic Census and are the building blocks for BEA's economic 
accounts. Therefore, they represent the most comprehensive and complete 
set of data on the economic processes or mechanisms by which output is 
produced and distributed.\10\ Besides Benchmark I-O estimates, BEA also 
produces Annual I-O estimates. While based on a similar methodology, 
the Annual I-O estimates reflect less comprehensive and less detailed 
data sources and are subject to revision when benchmark data become 
available. Instead of using the less detailed Annual I-O data, we are 
proposing to inflate the detailed 2007 Benchmark I-O data forward to 
2016 by applying the annual price changes from the respective price 
proxies to the appropriate market basket cost categories that are 
obtained from the 2007 Benchmark I-O data. We repeated this practice 
for each year. We then calculated the cost shares that each cost

[[Page 32363]]

category represents of the 2007 data inflated to 2016. These resulting 
2016 cost shares were applied to the ``All Other'' residual cost weight 
to obtain the detailed cost weights for the proposed 2016-based home 
health market basket. For example, the cost for Operations and 
Maintenance represents 8.0 percent of the sum of the ``All Other'' 2007 
Benchmark I-O HHA Expenditures inflated to 2016. Therefore, the 
Operations and Maintenance cost weight represents 8.0 percent of the 
proposed 2016-based home health market basket's ``All Other'' cost 
category (19.0 percent), yielding an Operations and Maintenance 
proposed cost weight of 1.5 percent in the proposed 2016-based home 
health market basket (0.080 x 19.0 percent = 1.5 percent). For the 
2010-based home health market basket, we used the same methodology 
utilizing the 2002 Benchmark I-O data (aged to 2010).
---------------------------------------------------------------------------

    \10\ http://www.bea.gov/papers/pdf/IOmanual_092906.pdf.
---------------------------------------------------------------------------

    Using this methodology, we are proposing to derive nine detailed 
cost categories from the proposed 2016-based home health market basket 
``All Other'' residual cost weight (19.0 percent). These categories 
are: (1) Operations and Maintenance; (2) Administrative Support; (3) 
Financial Services; (4) Medical Supplies; (5) Rubber and Plastics; (6) 
Telephone; (7) Professional Fees; (8) Other Products; and (9) Other 
Services. The 2010-based home health market basket included a separate 
cost category for Postage; however, due to its small weight for the 
2016-based home health market basket, we propose to eliminate the 
stand-alone cost category for Postage and include these expenses in the 
Other Services cost category.
    Table 10 lists the proposed 2016-based home health market basket 
cost categories, cost weights, and price proxies.

          Table 10--Cost Categories, Weights, and Price Proxies
            in Proposed 2016-Based Home Health Market Basket
------------------------------------------------------------------------
       Cost categories             Weight             Price proxy
------------------------------------------------------------------------
Compensation, including                  76.1  .........................
 allocated contract services'
 labor.
    Wages and Salaries,                  65.1  Proposed Home Health
     including allocated                        Blended Wages and
     contract services' labor.                  Salaries Index (2016).
    Benefits, including                  10.9  Proposed Home Health
     allocated contract                         Blended Benefits Index
     services' labor.                           (2016).
Operations & Maintenance.....             1.5  CPI-U for Fuel and
                                                utilities.
Professional Liability                    0.3  CMS Physician
 Insurance.                                     Professional Liability
                                                Insurance Index.
Administrative & General &               17.4  .........................
 Other Expenses including
 allocated contract services'
 labor.
    Administrative Support...             1.0  ECI for Total
                                                compensation for Private
                                                industry workers in
                                                Office and
                                                administrative support.
    Financial Services.......             1.9  ECI for Total
                                                compensation for Private
                                                industry workers in
                                                Financial activities.
    Medical Supplies.........             0.9  PPI Commodity data for
                                                Medical, surgical &
                                                personal aid devices.
    Rubber & Plastics........             1.6  PPI Commodity data for
                                                Rubber and plastic
                                                products.
    Telephone................             0.7  CPI-U for Telephone
                                                services.
    Professional Fees........             5.3  ECI for Total
                                                compensation for Private
                                                industry workers in
                                                Professional and
                                                related.
    Other Products...........             2.8  PPI Commodity data for
                                                Finished goods less
                                                foods and energy.
    Other Services...........             3.2  ECI for Total
                                                compensation for Private
                                                industry workers in
                                                Service occupations.
Transportation...............             2.6  CPI-U for Transportation.
Capital-Related..............             2.1  .........................
    Fixed Capital............             1.4  CPI-U for Owners'
                                                equivalent rent of
                                                residences.
    Movable Capital..........             0.6  PPI Commodity data for
                                                Machinery and equipment.
                              ----------------
    Total....................         * 100.0  .........................
------------------------------------------------------------------------
* Figures may not sum due to rounding.

d. Proposed 2016-Based Home Health Market Basket Price Proxies
    After we computed the CY 2016 cost category weights for the 
proposed rebased home health market basket, we selected the most 
appropriate wage and price indexes to proxy the rate of change for each 
expenditure category. With the exception of the price index for 
Professional Liability Insurance costs, the proposed price proxies are 
based on Bureau of Labor Statistics (BLS) data and are grouped into one 
of the following BLS categories:
    <bullet> Employment Cost Indexes--Employment Cost Indexes (ECIs) 
measure the rate of change in employee wage rates and employer costs 
for employee benefits per hour worked. These indexes are fixed-weight 
indexes and strictly measure the change in wage rates and employee 
benefits per hour. They are not affected by shifts in skill mix. ECIs 
are superior to average hourly earnings as price proxies for input 
price indexes for two reasons: (a) They measure pure price change; and 
(b) they are available by occupational groups, not just by industry.
    <bullet> Consumer Price Indexes--Consumer Price Indexes (CPIs) 
measure change in the prices of final goods and services bought by the 
typical consumer. Consumer price indexes are used when the expenditure 
is more similar to that of a purchase at the retail level rather than 
at the wholesale level, or if no appropriate Producer Price Indexes 
(PPIs) were available.
    <bullet> Producer Price Indexes--PPIs measures average changes in 
prices received by domestic producers for their goods and services. 
PPIs are used to measure price changes for goods sold in other than 
retail markets. For example, a PPI for movable equipment is used rather 
than a CPI for equipment. PPIs in some cases are preferable price 
proxies for goods that HHAs purchase at wholesale levels. These fixed-
weight indexes are a measure of price change

[[Page 32364]]

at the producer or at the intermediate stage of production.
    We evaluated the price proxies using the criteria of reliability, 
timeliness, availability, and relevance. Reliability indicates that the 
index is based on valid statistical methods and has low sampling 
variability. Widely accepted statistical methods ensure that the data 
were collected and aggregated in way that can be replicated. Low 
sampling variability is desirable because it indicates that sample 
reflects the typical members of the population. (Sampling variability 
is variation that occurs by chance because a sample was surveyed rather 
than the entire population.) Timeliness implies that the proxy is 
published regularly, preferably at least once a quarter. The market 
baskets are updated quarterly and therefore it is important the 
underlying price proxies be up-to-date, reflecting the most recent data 
available. We believe that using proxies that are published regularly 
helps ensure that we are using the most recent data available to update 
the market basket. We strive to use publications that are disseminated 
frequently because we believe that this is an optimal way to stay 
abreast of the most current data available. Availability means that the 
proxy is publicly available. We prefer that our proxies are publicly 
available because this will help ensure that our market basket updates 
are as transparent to the public as possible. In addition, this enables 
the public to be able to obtain the price proxy data on a regular 
basis. Finally, relevance means that the proxy is applicable and 
representative of the cost category weight to which it is applied. The 
CPIs, PPIs, and ECIs selected by us to be proposed in this regulation 
meet these criteria. Therefore, we believe that they continue to be the 
best measure of price changes for the cost categories to which they 
would be applied.
    As part of the revising and rebasing of the home health market 
basket, we are proposing to rebase the home health blended Wages and 
Salaries index and the home health blended Benefits index. We propose 
to use these blended indexes as price proxies for the Wages and 
Salaries and the Benefits portions of the proposed 2016-based home 
health market basket, as we did in the 2010-based home health market 
basket. A more detailed discussion is provided below.
    <bullet> Wages and Salaries: For measuring price growth in the 
2016-based home health market basket, we are proposing to apply six 
price proxies to six occupational subcategories within the Wages and 
Salaries component, which would reflect the HHA occupational mix. This 
is the same approach used for the 2010-based index. We use a blended 
wage proxy because there is not a published wage proxy specific to the 
home health industry.
    We are proposing to continue to use the National Industry-Specific 
Occupational Employment and Wage estimates for North American 
Industrial Classification System (NAICS) 621600, Home Health Care 
Services, published by the BLS Office of Occupational Employment 
Statistics (OES) as the data source for the cost shares of the home 
health blended wage and benefits proxy. This is the same data source 
that was used for the 2010-based HHA blended wage and benefit proxies; 
however, we are proposing to use the May 2016 estimates in place of the 
May 2010 estimates. Detailed information on the methodology for the 
national industry-specific occupational employment and wage estimates 
survey can be found at http://www.bls.gov/oes/current/oes_tec.htm.
    The needed data on HHA expenditures for the six occupational 
subcategories (Health-Related Professional and Technical, Non Health-
Related Professional and Technical, Management, Administrative, Health 
and Social Assistance Service, and Other Service Workers) for the wages 
and salaries component were tabulated from the May 2016 OES data for 
NAICS 621600, Home Health Care Services. Table 11 compares the proposed 
2016 occupational assignments to the 2010 occupational assignments of 
the six CMS designated subcategories. If an OES occupational 
classification does not exist in the 2010 or 2016 data we use ``n/a.''

    Table 11--Proposed 2016 Occupational Assignments Compared to 2010
  Occupational Assignments for CMS Home Health Wages and Salaries Blend
------------------------------------------------------------------------
     2016 proposed occupational          2010 occupational groupings
             groupings              ------------------------------------
------------------------------------
                     Health-related                       Health-related
      Group 1         professional         Group 1         professional
                     and technical                        and technical
------------------------------------------------------------------------
n/a...............  n/a............  29-1021...........  Dentists,
                                                          General.
29-1031...........  Dietitians and   29-1031...........  Dietitians and
                     Nutritionists.                       Nutritionists.
29-1051...........  Pharmacists....  29-1051...........  Pharmacists.
29-1062...........  Family and       29-1062...........  Family and
                     General                              General
                     Practitioners.                       Practitioners.
29-1063...........  Internists,      29-1063...........  Internists,
                     General.                             General.
29-1065...........  Pediatricians,   n/a...............  n/a.
                     General.
29-1066...........  Psychiatrists..  n/a...............  n/a.
29-1069...........  Physicians and   29-1069...........  Physicians and
                     Surgeons, All                        Surgeons, All
                     Other.                               Other.
29-1071...........  Physician        29-1071...........  Physician
                     Assistants.                          Assistants.
n/a...............  n/a............  29-1111...........  Registered
                                                          Nurses.
29-1122...........  Occupational     29-1122...........  Occupational
                     Therapists.                          Therapists.
29-1123...........  Physical         29-1123...........  Physical
                     Therapists.                          Therapists.
29-1125...........  Recreational     29-1125...........  Recreational
                     Therapists.                          Therapists.
29-1126...........  Respiratory      29-1126...........  Respiratory
                     Therapists.                          Therapists.
29-1127...........  Speech-Language  29-1127...........  Speech-Language
                     Pathologists.                        Pathologists.
29-1129...........  Therapists, All  29-1129...........  Therapists, All
                     Other.                               Other.
29-1141...........  Registered       n/a...............  n/a.
                     Nurses.
29-1171...........  Nurse            n/a...............  n/a.
                     Practitioners.
29-1199...........  Health           29-1199...........  Health
                     Diagnosing and                       Diagnosing and
                     Treating                             Treating
                     Practitioners,                       Practitioners,
                     All Other.                           All Other.
------------------------------------------------------------------------
------------------------------------------------------------------------


[[Page 32365]]


------------------------------------------------------------------------
 2016 proposed occupational groups       2010 occupational groupings
------------------------------------------------------------------------
                       Non health                           Non health
                        related                              related
      Group 2        professional &        Group 2        professional &
                       technical                            technical
------------------------------------------------------------------------
13-0000...........  Business and     13-0000...........  Business and
                     Financial                            Financial
                     Operations                           Operations
                     Occupations.                         Occupations.
15-0000...........  Computer and     15-0000...........  Computer and
                     Mathematical                         Mathematical
                     Occupations.                         Science
                                                          Occupations.
n/a...............  n/a............  17-0000...........  Architecture
                                                          and
                                                          Engineering
                                                          Occupations.
19-0000...........  Life, Physical,  19-0000...........  Life, Physical,
                     and Social                           and Social
                     Science                              Science
                     Occupations.                         Occupations.
n/a...............  n/a............  23-0000...........  Legal
                                                          Occupations.
25-0000...........  Education,       25-0000...........  Education,
                     Training, and                        Training, and
                     Library                              Library
                     Occupations.                         Occupations.
27-0000...........  Arts, Design,    27-0000...........  Arts, Design,
                     Entertainment,                       Entertainment,
                     Sports, and                          Sports, and
                     Media                                Media
                     Occupations.                         Occupations.
------------------------------------------------------------------------
      Group 3          Management          Group 3          Management
------------------------------------------------------------------------
11-0000...........  Management       11-0000...........  Management
                     Occupations.                         Occupations.
------------------------------------------------------------------------
      Group 4        Administrative        Group 4        Administrative
------------------------------------------------------------------------
43-0000...........  Office and       43-0000...........  Office and
                     Administrative                       Administrative
                     Support                              Support
                     Occupations.                         Occupations.
------------------------------------------------------------------------
      Group 5          Health and          Group 5          Health and
                         social                               social
                       assistance                           assistance
                        services                             services
------------------------------------------------------------------------
21-0000...........  Community and    21-0000...........  Community and
                     Social Service                       Social
                     Occupations.                         Services
                                                          Occupations.
29-2011...........  Medical and      29-2011...........  Medical and
                     Clinical                             Clinical
                     Laboratory                           Laboratory
                     Technologists.                       Technologists.
29-2012...........  Medical and      29-2012...........  Medical and
                     Clinical                             Clinical
                     Laboratory                           Laboratory
                     Technicians.                         Technicians.
29-2021...........  Dental           29-2021...........  Dental
                     Hygienists.                          Hygienists.
29-2032...........  Diagnostic       29-2032...........  Diagnostic
                     Medical                              Medical
                     Sonographers.                        Sonographers.
29-2034...........  Radiologic       29-2034...........  Radiologic
                     Technologists.                       Technologists
                                                          and
                                                          Technicians.
29-2041...........  Emergency        29-2041...........  Emergency
                     Medical                              Medical
                     Technicians                          Technicians
                     and Paramedics.                      and
                                                          Paramedics.
29-2051...........  Dietetic         29-2051...........  Dietetic
                     Technicians.                         Technicians.
29-2052...........  Pharmacy         29-2052...........  Pharmacy
                     Technicians.                         Technicians.
29-2053...........  Psychiatric      n/a...............  n/a.
                     Technicians.
29-2054...........  Respiratory      29-2054...........  Respiratory
                     Therapy                              Therapy
                     Technicians.                         Technicians.
29-2055...........  Surgical         n/a...............  n/a.
                     Technologists.
29-2061...........  Licensed         29-2061...........  Licensed
                     Practical and                        Practical and
                     Licensed                             Licensed
                     Vocational                           Vocational
                     Nurses.                              Nurses.
29-2071...........  Medical Records  29-2071...........  Medical Records
                     and Health                           and Health
                     Information                          Information
                     Technicians.                         Technicians.
29-2099...........  Health           29-2099...........  Health
                     Technologists                        Technologists
                     and                                  and
                     Technicians,                         Technicians,
                     All Other.                           All Other.
n/a...............  n/a............  29-9012...........  Occupational
                                                          Health and
                                                          Safety
                                                          Technicians.
29-9099...........  Healthcare       29-9099...........  Healthcare
                     Practitioners                        Practitioner
                     and Technical                        and Technical
                     Workers, All                         Workers, All
                     Other.                               Other.
31-0000...........  Healthcare       31-0000...........  Healthcare
                     Support                              Support
                     Occupations.                         Occupations.
------------------------------------------------------------------------
      Group 6        Other service         Group 6        Other service
                         workers                              workers
------------------------------------------------------------------------
33-0000...........  Protective       33-0000...........  Protective
                     Service                              Service
                     Occupations.                         Occupations.
35-0000...........  Food             35-0000...........  Food
                     Preparation                          Preparation
                     and Serving                          and Serving
                     Related                              Related
                     Occupations.                         Occupations.
37-0000...........  Building and     37-0000...........  Building and
                     Grounds                              Grounds
                     Cleaning and                         Cleaning and
                     Maintenance                          Maintenance
                     Occupations.                         Occupations.
39-0000...........  Personal Care    39-0000...........  Personal Care
                     and Service                          and Service
                     Occupations.                         Occupations.
41-0000...........  Sales and        41-0000...........  Sales and
                     Related                              Related
                     Occupations.                         Occupations.
47-0000...........  Construction     n/a...............  n/a.
                     and Extraction
                     Occupations.
49-0000...........  Installation,    49-0000...........  Installation,
                     Maintenance,                         Maintenance,
                     and Repair                           and Repair
                     Occupations.                         Occupations.
51-0000...........  Production       51-0000...........  Production
                     Occupations.                         Occupations.
53-0000...........  Transportation   53-0000...........  Transportation
                     and Material                         and Material
                     Moving                               Moving
                     Occupations.                         Occupations.
------------------------------------------------------------------------

    Total expenditures by occupation were calculated by taking the OES 
number of employees multiplied by the OES annual average salary for 
each subcategory, and then calculating the proportion of total wage 
costs that each subcategory represents. The proportions listed in Table 
12 represent the Wages and Salaries blend weights.

  Table 12--Comparison of the Proposed 2016-Based Home Health Wages and Salaries Blend and the 2010-Based Home
                                         Health Wages and Salaries Blend
----------------------------------------------------------------------------------------------------------------
                                  Proposed 2016
        Cost subcategory             weight        2010 weight      Price proxy             BLS series ID
----------------------------------------------------------------------------------------------------------------
Health-Related Professional and            33.7            33.4  ECI for Wages and  CIU1026220000000I.
 Technical.                                                       salaries for All
                                                                  Civilian workers
                                                                  in Hospitals.
Non Health-Related Professional             2.3             2.3  ECI for Wages and  CIU2025400000000I.
 and Technical.                                                   salaries for
                                                                  Private industry
                                                                  workers in
                                                                  Professional,
                                                                  scientific, and
                                                                  technical
                                                                  services.
Management.....................             7.6             8.3  ECI for Wages and  CIU2020000110000I.
                                                                  salaries for
                                                                  Private industry
                                                                  workers in
                                                                  Management,
                                                                  business, and
                                                                  financial.

[[Page 32366]]

 
Administrative.................             6.7             7.7  ECI for Wages and  CIU2020000220000I.
                                                                  salaries for
                                                                  Private industry
                                                                  workers in
                                                                  Office and
                                                                  administrative
                                                                  support.
Health and Social Assistance               35.3            35.8  ECI for Wages and  CIU1026200000000I.
 Services.                                                        salaries for All
                                                                  Civilian workers
                                                                  in Health care
                                                                  and social
                                                                  assistance.
Other Service Occupations......            14.4            12.6  ECI for Wages and  CIU2020000300000I.
                                                                  salaries for
                                                                  Private industry
                                                                  workers in
                                                                  Service
                                                                  occupations.
                                --------------------------------
    Total *....................           100.0           100.0
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.

    A comparison of the yearly changes from CY 2016 to CY 2019 for the 
2010-based home health Wages and Salaries blend and the proposed 2016-
based home health Wages and Salaries blend is shown in Table 13. The 
annual increases in the two price proxies are the same when rounded to 
one decimal place.

             Table 13--Annual Growth in Proposed 2016 and 2010 Home Health Wages and Salaries Blend
----------------------------------------------------------------------------------------------------------------
                                                       2016            2017            2018            2019
----------------------------------------------------------------------------------------------------------------
Wage Blend 2016.................................             2.3             2.5             2.6             3.0
Wage Blend 2010.................................             2.3             2.5             2.6             3.0
----------------------------------------------------------------------------------------------------------------
Source: IHS Global Insight Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017.

    <bullet> Benefits: For measuring Benefits price growth in the 
proposed 2016-based home health market basket, we are proposing to 
apply applicable price proxies to the six occupational subcategories 
that are used for the Wages and Salaries blend. The proposed six 
categories in Table 14 are the same as those in the 2010-based home 
health market basket and include the same occupational mix as listed in 
Table 14.

 Table 14--Comparison of the Proposed 2016-Based Home Health Benefits Blend and 2010-Based Home Health Benefits
                                                      Blend
----------------------------------------------------------------------------------------------------------------
                                                 Proposed 2016
                 Cost category                      weight        2010 weight              Price proxy
----------------------------------------------------------------------------------------------------------------
Health-Related Professional and Technical.....            33.9            33.5  ECI for Benefits for All
                                                                                 Civilian workers in Hospitals.
Non Health-Related Professional and Technical.             2.3             2.2  ECI for Benefits for Private
                                                                                 industry workers in
                                                                                 Professional, scientific, and
                                                                                 technical services.
Management....................................             7.3             8.0  ECI for Benefits for Private
                                                                                 industry workers in Management,
                                                                                 business, and financial.
Administrative................................             6.7             7.8  ECI for Benefits for Private
                                                                                 industry workers in Office and
                                                                                 administrative support.
Health and Social Assistance Services.........            35.5            35.9  ECI for Benefits for All
                                                                                 Civilian workers in Health care
                                                                                 and social assistance.
Other Service Workers.........................            14.2            12.5  ECI for Benefits for Private
                                                                                 industry workers in Service
                                                                                 occupations.
                                               --------------------------------
    Total *...................................           100.0           100.0
----------------------------------------------------------------------------------------------------------------
* Totals may not sum due to rounding.

    There is no available data source that exists for benefit 
expenditures by occupation for the home health industry. Thus, to 
construct weights for the home health benefits blend we calculated the 
ratio of benefits to wages and salaries for CY 2016 for the six ECI 
series we are proposing to use in the blended `wages and salaries' and 
`benefits' indexes. To derive the relevant benefits weight, we applied 
the benefit-to-wage ratios to each of the six occupational 
subcategories from the 2016 OES wage and salary weights, and 
normalized. For example, the ratio of benefits to wages from the 2016 
home health wages and salaries blend and the benefits blend for the 
management category is 0.984. We apply this ratio to the 2016 OES 
weight for wages and salaries for management, 7.6 percent, and then 
normalize those weights relative to the other five benefit occupational 
categories to obtain a benefit weight for management of 7.3 percent.
    A comparison of the yearly changes from CY 2016 to CY 2019 for the 
2010-based home health Benefits blend and the proposed 2016-based home 
health Benefits blend is shown in Table 15. With the exception of a 0.1 
percentage point difference in 2019, the annual increases in the two 
price proxies are the same when rounded to one decimal place.

[[Page 32367]]



 Table 15--Annual Growth in the Proposed 2016 Home Health Benefits Blend and the 2010 Home Health Benefits Blend
----------------------------------------------------------------------------------------------------------------
                                                       2016            2017            2018            2019
----------------------------------------------------------------------------------------------------------------
Benefits Blend 2016.............................             1.7             1.9             2.4             3.0
Benefits Blend 2010.............................             1.7             1.9             2.4             2.9
----------------------------------------------------------------------------------------------------------------
Source: IHS Global Insight Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017.

    <bullet> Operations and Maintenance: We are proposing to use CPI 
U.S. city average for Fuel and utilities (BLS series code 
#CUUR0000SAH2) to measure price growth of this cost category. The same 
proxy was used for the 2010-based home health market basket.
    <bullet> Professional Liability Insurance: We are proposing to use 
the CMS Physician Professional Liability Insurance price index to 
measure price growth of this cost category. The same proxy was used for 
the 2010-based home health market basket.
    To accurately reflect the price changes associated with physician 
PLI, each year we collect PLI premium data for physicians from a 
representative sample of commercial carriers and publically available 
rate filings as maintained by each State's Association of Insurance 
Commissioners. As we require for our other price proxies, the PLI price 
proxy is intended to reflect the pure price change associated with this 
particular cost category. Thus, the level of liability coverage is held 
constant from year to year. To accomplish this, we obtain premium 
information from a sample of commercial carriers for a fixed level of 
coverage, currently $1 million per occurrence and a $3 million annual 
limit. This information is collected for every State by physician 
specialty and risk class. Finally, the State-level, physician-specialty 
data are aggregated to compute a national total, using counts of 
physicians by State and specialty as provided in the AMA publication, 
Physician Characteristics and Distribution in the U.S.
    <bullet> Administrative and Support: We are proposing to use the 
ECI for Total compensation for Private industry workers in Office and 
administrative support (BLS series code #CIU2010000220000I) to measure 
price growth of this cost category. The same proxy was used for the 
2010-based home health market basket.
    <bullet> Financial Services: We are proposing to use the ECI for 
Total compensation for Private industry workers in Financial activities 
(BLS series code #CIU201520A000000I) to measure price growth of this 
cost category. The same proxy was used for the 2010-based home health 
market basket.
    <bullet> Medical Supplies: We are proposing to use the PPI 
Commodity data for Miscellaneous products-Medical, surgical & personal 
aid devices (BLS series code #WPU156) to measure price growth of this 
cost category. The same proxy was used for the 2010-based home health 
market basket.
    <bullet> Rubber and Plastics: We are proposing to use the PPI 
Commodity data for Rubber and plastic products (BLS series code #WPU07) 
to measure price growth of this cost category. The same proxy was used 
for the 2010-based home health market basket.
    <bullet> Telephone: We are proposing to use CPI U.S. city average 
for Telephone services (BLS series code #CUUR0000SEED) to measure price 
growth of this cost category. The same proxy was used for the 2010-
based home health market basket.
    <bullet> Professional Fees: We are proposing to use the ECI for 
Total compensation for Private industry workers in Professional and 
related (BLS series code #CIS2010000120000I) to measure price growth of 
this category. The same proxy was used for the 2010-based home health 
market basket.
    <bullet> Other Products: We are proposing to use the PPI Commodity 
data for Final demand-Finished goods less foods and energy (BLS series 
code #WPUFD4131) to measure price growth of this category. The same 
proxy was used for the 2010-based home health market basket.
    <bullet> Other Services: We are proposing to use the ECI for Total 
compensation for Private industry workers in Service occupations (BLS 
series code #CIU2010000300000I) to measure price growth of this 
category. The same proxy was used for the 2010-based home health market 
basket.
    <bullet> Transportation: We are proposing to use the CPI U.S. city 
average for Transportation (BLS series code #CUUR0000SAT) to measure 
price growth of this category. The same proxy was used for the 2010-
based home health market basket.
    <bullet> Fixed capital: We are proposing to use the CPI U.S. city 
average for Owners' equivalent rent of residences (BLS series code 
#CUUS0000SEHC) to measure price growth of this cost category. The same 
proxy was used for the 2010-based home health market basket.
    <bullet> Movable Capital: We are proposing to use the PPI Commodity 
data for Machinery and equipment (BLS series code #WPU11) to measure 
price growth of this cost category. The same proxy was used for the 
2010-based home health market basket.
e. Rebasing Results
    A comparison of the yearly changes from CY 2014 to CY 2021 for the 
2010-based home health market basket and the proposed 2016-based home 
health market basket is shown in Table 16.

 Table 16--Comparison of the 2010-Based Home Health Market Basket and the Proposed 2016-Based Home Health Market
                                        Basket, Percent Change, 2014-2021
----------------------------------------------------------------------------------------------------------------
                                                                                   Proposed home    Difference
                                                                    Home health    health market  (proposed 2016-
                                                                  market basket,   basket, 2016-    based less
                                                                    2010-based         based        2010-based)
----------------------------------------------------------------------------------------------------------------
Historical data:
    CY 2014.....................................................             1.6             1.6             0.0
    CY 2015.....................................................             1.6             1.5            -0.1
    CY 2016.....................................................             2.0             2.0             0.0
    CY 2017.....................................................             2.3             2.3             0.0

[[Page 32368]]

 
        Average CYs 2014-2017...................................             1.9             1.9             0.0
Forecast:
    CY 2018.....................................................             2.5             2.5             0.0
    CY 2019.....................................................             2.8             2.8             0.0
    CY 2020.....................................................             3.0             3.0             0.0
    CY 2021.....................................................             3.0             3.0             0.0
        Average CYs 2018-2021...................................             2.8             2.8             0.0
----------------------------------------------------------------------------------------------------------------
Source: IHS Global Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017.

    Table 16 shows that the forecasted rate of growth for CY 2019 for 
the proposed 2016-based home health market basket is 2.8 percent, the 
same rate of growth as estimated using the 2010-based home health 
market basket; other forecasted years also show a similar increase. 
Similarly, the historical estimates of the growth in the 2016-based and 
2010-based home health market basket are the same except for CY 2015 
where the 2010-based home health market basket is 0.1 percentage point 
higher. We note that if more recent data are subsequently available 
(for example, a more recent estimate of the market basket), we would 
use such data to determine the market basket increases in the final 
rule.
f. Labor-Related Share
    Effective for CY 2019, we are proposing to revise the labor-related 
share to reflect the proposed 2016-based home health market basket 
Compensation (Wages and Salaries plus Benefits) cost weight. The 
current labor-related share is based on the Compensation cost weight of 
the 2010-based home health market basket. Based on the proposed 2016-
based home health market basket, the labor-related share would be 76.1 
percent and the proposed non-labor-related share would be 23.9 percent. 
The labor-related share for the 2010-based home health market basket 
was 78.5 percent and the non-labor-related share was 21.5 percent. As 
explained earlier, the decrease in the compensation cost weight of 2.4 
percentage points is attributable to both employed compensation (wages 
and salaries and benefits for employees) and direct patient care 
contract labor costs as reported in the MCR data. Table 17 details the 
components of the labor-related share for the 2010-based and proposed 
2016-based home health market baskets.

Table 17--Labor-Related Share of Current and Proposed Home Health Market
                                 Baskets
------------------------------------------------------------------------
                                            2010-based    Proposed 2016-
              Cost category                market basket   based market
                                              weight       basket weight
------------------------------------------------------------------------
Wages and Salaries......................            66.3            65.1
Employee Benefits.......................            12.2            11.0
Total Labor-Related.....................            78.5            76.1
Total Non Labor-Related.................            21.5            23.9
------------------------------------------------------------------------

    We propose to implement the proposed revision to the labor-related 
share of 76.1 percent in a budget neutral manner. This proposal would 
be consistent with our policy of implementing the annual recalibration 
of the case-mix weights and update of the home health wage index in a 
budget neutral manner.
g. Multifactor Productivity
    In the CY 2015 HHA PPS final rule (79 FR 38384 through 38384), we 
finalized our methodology for calculating and applying the MFP 
adjustment. As we explained in that rule, section 1895(b)(3)(B)(vi) of 
the Act, requires that, in CY 2015 (and in subsequent calendar years, 
except CY 2018 (under section 411(c) of the Medicare Access and CHIP 
Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted April 16, 
2015)), the market basket percentage under the HHA prospective payment 
system as described in section 1895(b)(3)(B) of the Act be annually 
adjusted by changes in economy-wide productivity. Section 
1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment to 
be equal to the 10-year moving average of change in annual economy-wide 
private nonfarm business multifactor productivity (MFP) (as projected 
by the Secretary for the 10-year period ending with the applicable 
fiscal year, calendar year, cost reporting period, or other annual 
period) (the ``MFP adjustment''). The Bureau of Labor Statistics (BLS) 
is the agency that publishes the official measure of private nonfarm 
business MFP. Please see http://www.bls.gov/mfp, to obtain the BLS 
historical published MFP data.
    Based on IHS Global Inc.'s (IGI's) first quarter 2018 forecast with 
history through the fourth quarter of 2017, the projected MFP 
adjustment (the 10-year moving average of MFP for the period ending 
December 31, 2019) for CY 2019 is 0.7 percent. IGI is a nationally 
recognized economic and financial forecasting firm that contracts with 
CMS to forecast the components of the market baskets. We note that if 
more recent data are subsequently available (for example, a more recent 
estimate of the MFP adjustment), we would use such data to determine 
the MFP adjustment in the final rule.

[[Page 32369]]

2. Proposed CY 2019 Market Basket Update for HHAs
    Using IGI's first quarter 2018 forecast, the MFP adjustment for CY 
2019 is projected to be 0.7 percent. In accordance with section 
1895(b)(3)(B)(iii) of the Act, we propose to base the CY 2019 market 
basket update, which is used to determine the applicable percentage 
increase for HHA payments, on the most recent estimate of the proposed 
2016-based home health market basket. Based on IGI's first quarter 2018 
forecast with history through the fourth quarter of 2017, the projected 
increase of the proposed 2016-based home health market basket for CY 
2019 is 2.8 percent. We propose to then reduce this percentage increase 
by the current estimate of the MFP adjustment for CY 2019 of 0.7 
percentage point in accordance with 1895(b)(3)(B)(vi) of the Act. 
Therefore, the current estimate of the CY 2019 HHA payment update is 
2.1 percent (2.8 percent market basket update, less 0.7 percentage 
point MFP adjustment). Furthermore, we note that if more recent data 
are subsequently available (for example, a more recent estimate of the 
market basket and MFP adjustment), we would use such data to determine 
the CY 2019 market basket update and MFP adjustment in the final rule.
    Section 1895(b)(3)(B)(v) of the Act requires that the home health 
update be decreased by 2 percentage points for those HHAs that do not 
submit quality data as required by the Secretary. For HHAs that do not 
submit the required quality data for CY 2019, the home health payment 
update will be 0.1 percent (2.1 percent minus 2 percentage points).
3. CY 2019 Home Health Wage Index
    Sections 1895(b)(4)(A)(ii) and (b)(4)(C) of the Act require the 
Secretary to provide appropriate adjustments to the proportion of the 
payment amount under the HH PPS that account for area wage differences, 
using adjustment factors that reflect the relative level of wages and 
wage-related costs applicable to the furnishing of HH services. Since 
the inception of the HH PPS, we have used inpatient hospital wage data 
in developing a wage index to be applied to HH payments. We propose to 
continue this practice for CY 2019, as we continue to believe that, in 
the absence of HH-specific wage data that accounts for area 
differences, using inpatient hospital wage data is appropriate and 
reasonable for the HH PPS. Specifically, we propose to continue to use 
the pre-floor, pre-reclassified hospital wage index as the wage 
adjustment to the labor portion of the HH PPS rates. For CY 2019, the 
updated wage data are for hospital cost reporting periods beginning on 
or after October 1, 2014, and before October 1, 2015 (FY 2015 cost 
report data). We apply the appropriate wage index value to the labor 
portion of the HH PPS rates based on the site of service for the 
beneficiary (defined by section 1861(m) of the Act as the beneficiary's 
place of residence).
    To address those geographic areas in which there are no inpatient 
hospitals, and thus, no hospital wage data on which to base the 
calculation of the CY 2019 HH PPS wage index, we propose to continue to 
use the same methodology discussed in the CY 2007 HH PPS final rule (71 
FR 65884) to address those geographic areas in which there are no 
inpatient hospitals. For rural areas that do not have inpatient 
hospitals, we propose to use the average wage index from all contiguous 
Core Based Statistical Areas (CBSAs) as a reasonable proxy. Currently, 
the only rural area without a hospital from which hospital wage data 
could be derived is Puerto Rico. However, for rural Puerto Rico, we do 
not apply this methodology due to the distinct economic circumstances 
that exist there (for example, due to the close proximity to one 
another of almost all of Puerto Rico's various urban and non-urban 
areas, this methodology would produce a wage index for rural Puerto 
Rico that is higher than that in half of its urban areas). Instead, we 
propose to continue to use the most recent wage index previously 
available for that area. For urban areas without inpatient hospitals, 
we use the average wage index of all urban areas within the state as a 
reasonable proxy for the wage index for that CBSA. For CY 2019, the 
only urban area without inpatient hospital wage data is Hinesville, GA 
(CBSA 25980).
    On February 28, 2013, OMB issued Bulletin No. 13-01, announcing 
revisions to the delineations of MSAs, Micropolitan Statistical Areas, 
and CBSAs, and guidance on uses of the delineation of these areas. In 
the CY 2015 HH PPS final rule (79 FR 66085 through 66087), we adopted 
the OMB's new area delineations using a 1-year transition.
    On August 15, 2017, OMB issued Bulletin No. 17-01 in which it 
announced that one Micropolitan Statistical Area, Twin Falls, Idaho, 
now qualifies as a Metropolitan Statistical Area. The new CBSA (46300) 
comprises the principal city of Twin Falls, Idaho in Jerome County, 
Idaho and Twin Falls County, Idaho. The CY 2019 HH PPS wage index value 
for CBSA 46300, Twin Falls, Idaho, will be 0.8335. Bulletin No. 17-01 
is available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf.\11\
---------------------------------------------------------------------------

    \11\ ``Revised Delineations of Metropolitan Statistical Areas, 
Micropolitan Statistical Areas, and Combined Statistical Areas, and 
Guidance on Uses of the Delineations of These Areas''. OMB BULLETIN 
NO. 17-01. August 15, 2017. https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf.
---------------------------------------------------------------------------

    The most recent OMB Bulletin (No. 18-03) was published on April 10, 
2018 and is available at https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf.\12\ The revisions contained 
in OMB Bulletin No. 18-03 have no impact on the geographic area 
delineations that are used to wage adjust HH PPS payments.
---------------------------------------------------------------------------

    \12\ ``Revised Delineations of Metropolitan Statistical Areas, 
Micropolitan Statistical Areas, and Combined Statistical Areas, and 
Guidance on Uses of the Delineations of These Areas''. OMB BULLETIN 
NO. 18-03. April 10, 2018. https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf.
---------------------------------------------------------------------------

    The CY 2019 wage index is available on the CMS website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Home-Health-Prospective-Payment-System-Regulations-and-Notices.html.
4. CY 2019 Annual Payment Update
a. Background
    The Medicare HH PPS has been in effect since October 1, 2000. As 
set forth in the July 3, 2000 final rule (65 FR 41128), the base unit 
of payment under the Medicare HH PPS is a national, standardized 60-day 
episode payment rate. As set forth in Sec.  484.220, we adjust the 
national, standardized 60-day episode payment rate by a case-mix 
relative weight and a wage index value based on the site of service for 
the beneficiary.
    To provide appropriate adjustments to the proportion of the payment 
amount under the HH PPS to account for area wage differences, we apply 
the appropriate wage index value to the labor portion of the HH PPS 
rates. As discussed in section III.C.1 of this proposed rule, based on 
the proposed 2016-based home health market basket, the proposed labor-
related share would be 76.1 percent and the proposed non-labor-related 
share would be 23.9 percent for CY 2019. The CY 2019 HH PPS rates use 
the same case-mix methodology as set forth in the CY 2008 HH PPS final 
rule with comment period (72 FR 49762) and will be adjusted as 
described in section III.B of this proposed rule. The following are the 
steps we take to compute the case-mix

[[Page 32370]]

and wage-adjusted 60-day episode rate for CY 2019:
    <bullet> Multiply the national 60-day episode rate by the patient's 
applicable case-mix weight.
    <bullet> Divide the case-mix adjusted amount into a labor (76.1 
percent) and a non-labor portion (23.9 percent).
    <bullet> Multiply the labor portion by the applicable wage index 
based on the site of service of the beneficiary.
    <bullet> Add the wage-adjusted portion to the non-labor portion, 
yielding the case-mix and wage adjusted 60-day episode rate, subject to 
any additional applicable adjustments.
    In accordance with section 1895(b)(3)(B) of the Act, we propose the 
annual update of the HH PPS rates. Section 484.225 sets forth the 
specific annual percentage update methodology. In accordance with Sec.  
484.225(i), for a HHA that does not submit HH quality data, as 
specified by the Secretary, the unadjusted national prospective 60-day 
episode rate is equal to the rate for the previous calendar year 
increased by the applicable HH market basket index amount minus 2 
percentage points. Any reduction of the percentage change would apply 
only to the calendar year involved and would not be considered in 
computing the prospective payment amount for a subsequent calendar 
year.
    Medicare pays the national, standardized 60-day case-mix and wage-
adjusted episode payment on a split percentage payment approach. The 
split percentage payment approach includes an initial percentage 
payment and a final percentage payment as set forth in Sec.  
484.205(b)(1) and (b)(2). We may base the initial percentage payment on 
the submission of a request for anticipated payment (RAP) and the final 
percentage payment on the submission of the claim for the episode, as 
discussed in Sec.  409.43. The claim for the episode that the HHA 
submits for the final percentage payment determines the total payment 
amount for the episode and whether we make an applicable adjustment to 
the 60-day case-mix and wage-adjusted episode payment. The end date of 
the 60-day episode as reported on the claim determines which calendar 
year rates Medicare will use to pay the claim.
    We may also adjust the 60-day case-mix and wage-adjusted episode 
payment based on the information submitted on the claim to reflect the 
following:
    <bullet> A low-utilization payment adjustment (LUPA) is provided on 
a per-visit basis as set forth in Sec. Sec.  484.205(c) and 484.230.
    <bullet> A partial episode payment (PEP) adjustment as set forth in 
Sec. Sec.  484.205(d) and 484.235.
    <bullet> An outlier payment as set forth in Sec. Sec.  484.205(e) 
and 484.240.
b. CY 2019 National, Standardized 60-Day Episode Payment Rate
    Section 1895(b)(3)(A)(i) of the Act requires that the 60-day 
episode base rate and other applicable amounts be standardized in a 
manner that eliminates the effects of variations in relative case-mix 
and area wage adjustments among different home health agencies in a 
budget neutral manner. To determine the CY 2019 national, standardized 
60-day episode payment rate, we apply a wage index budget neutrality 
factor and a case-mix budget neutrality factor described in section 
III.B of this proposed rule; and the home health payment update 
percentage discussed in section III.C.2 of this proposed rule.
    To calculate the wage index budget neutrality factor, we simulated 
total payments for non-LUPA episodes using the CY 2019 wage index 
(including the application of the proposed labor-related share of 76.1 
percent and the proposed non-labor-related share of 23.9 percent) and 
compared it to our simulation of total payments for non-LUPA episodes 
using the CY 2018 wage index and CY 2018 (including the application of 
the current labor-related share of 78.535 percent and the non-labor-
related of 21.465). By dividing the total payments for non-LUPA 
episodes using the CY 2019 wage index by the total payments for non-
LUPA episodes using the CY 2018 wage index, we obtain a wage index 
budget neutrality factor of 0.9991. We would apply the wage index 
budget neutrality factor of 0.9991 to the calculation of the CY 2019 
national, standardized 60-day episode payment rate.
    As discussed in section III.B of this proposed rule, to ensure the 
changes to the case-mix weights are implemented in a budget neutral 
manner, we propose to apply a case-mix weight budget neutrality factor 
to the CY 2019 national, standardized 60-day episode payment rate. The 
case-mix weight budget neutrality factor is calculated as the ratio of 
total payments when CY 2019 case-mix weights are applied to CY 2017 
utilization (claims) data to total payments when CY 2018 case-mix 
weights are applied to CY 2017 utilization data. The case-mix budget 
neutrality factor for CY 2019 is 1.0163 as described in section III.B 
of this proposed rule.
    Next, we would update the payment rates by the CY 2019 home health 
payment update percentage of 2.1 percent as described in section 
III.C.2 of this proposed rule. The CY 2019 national, standardized 60-
day episode payment rate is calculated in Table 18.

                  Table 18--CY 2019 60-Day National, Standardized 60-Day Episode Payment Amount
----------------------------------------------------------------------------------------------------------------
                                                                                                     CY 2019
                                                 Wage index        Case-mix                         National,
    CY 2018 national, standardized 60-day          budget       weights budget     CY 2019 HH    standardized 60-
               episode payment                   neutrality       neutrality     payment update    day episode
                                                   factor           factor                           payment
----------------------------------------------------------------------------------------------------------------
$3,039.64...................................        x 0.9991         x 1.0163          x 1.021        $3,151.22
----------------------------------------------------------------------------------------------------------------

    The CY 2019 national, standardized 60-day episode payment rate for 
an HHA that does not submit the required quality data is updated by the 
CY 2019 home health payment update of 2.1 percent minus 2 percentage 
points and is shown in Table 19.

[[Page 32371]]



 Table 19--CY 2019 National, Standardized 60-Day Episode Payment Amount for HHAs That Do Not Submit the Quality
                                                      Data
----------------------------------------------------------------------------------------------------------------
                                                                                   CY 2019 HH        CY 2019
                                                 Wage index        Case-mix      payment update     National,
    CY 2018 national, standardized 60-day          budget       weights budget      minus 2      standardized 60-
               episode payment                   neutrality       neutrality       percentage      day episode
                                                   factor           factor           points          payment
----------------------------------------------------------------------------------------------------------------
$3,039.64...................................        x 0.9991         x 1.0163          x 1.001        $3,089.49
----------------------------------------------------------------------------------------------------------------

c. CY 2019 National Per-Visit Rates
    The national per-visit rates are used to pay LUPAs (episodes with 
four or fewer visits) and are also used to compute imputed costs in 
outlier calculations. The per-visit rates are paid by type of visit or 
HH discipline. The six HH disciplines are as follows:
    <bullet> Home health aide (HH aide).
    <bullet> Medical Social Services (MSS).
    <bullet> Occupational therapy (OT).
    <bullet> Physical therapy (PT).
    <bullet> Skilled nursing (SN).
    <bullet> Speech-language pathology (SLP).
    To calculate the CY 2019 national per-visit rates, we started with 
the CY 2018 national per-visit rates. Then we applied a wage index 
budget neutrality factor to ensure budget neutrality for LUPA per-visit 
payments. We calculated the wage index budget neutrality factor by 
simulating total payments for LUPA episodes using the CY 2019 wage 
index and comparing it to simulated total payments for LUPA episodes 
using the CY 2018 wage index. By dividing the total payments for LUPA 
episodes using the CY 2019 wage index by the total payments for LUPA 
episodes using the CY 2018 wage index, we obtained a wage index budget 
neutrality factor of 1.0000. We apply the wage index budget neutrality 
factor of 1.0000 in order to calculate the CY 2019 national per-visit 
rates.
    The LUPA per-visit rates are not calculated using case-mix weights. 
Therefore, no case-mix weights budget neutrality factor is needed to 
ensure budget neutrality for LUPA payments. Lastly, the per-visit rates 
for each discipline are updated by the CY 2019 home health payment 
update percentage of 2.1 percent. The national per-visit rates are 
adjusted by the wage index based on the site of service of the 
beneficiary. The per-visit payments for LUPAs are separate from the 
LUPA add-on payment amount, which is paid for episodes that occur as 
the only episode or initial episode in a sequence of adjacent episodes. 
The CY 2019 national per-visit rates for HHAs that submit the required 
quality data are updated by the CY 2019 HH payment update percentage of 
2.1 percent and are shown in Table 20.

     Table 20--CY 2019 National Per-Visit Payment Amounts for HHAs That Do Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                  Wage index
                                                CY 2018 per-        budget         CY 2019 HH      CY 2019 per-
                HH Discipline                  visit payment      neutrality     payment update   visit payment
                                                                    factor
----------------------------------------------------------------------------------------------------------------
Home Health Aide............................          $64.94         x 1.0000          x 1.021           $66.30
Medical Social Services.....................          229.86         x 1.0000          x 1.021           234.69
Occupational Therapy........................          157.83         x 1.0000          x 1.021           161.14
Physical Therapy............................          156.76         x 1.0000          x 1.021           160.05
Skilled Nursing.............................          143.40         x 1.0000          x 1.021           146.41
Speech-Language Pathology...................          170.38         x 1.0000          x 1.021           173.96
----------------------------------------------------------------------------------------------------------------

    The CY 2019 per-visit payment rates for HHAs that do not submit the 
required quality data are updated by the CY 2019 HH payment update 
percentage of 2.1 percent minus 2 percentage points and are shown in 
Table 21.

   Table 21--CY 2019 National Per-Visit Payment Amounts for HHAs That Do Not Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                                   CY 2019 HH
                                                                  Wage index     payment update
                HH Discipline                   CY 2018 per-        budget          minus 2        CY 2019 per-
                                                visit rates       neutrality       percentage      visit rates
                                                                    factor           points
----------------------------------------------------------------------------------------------------------------
Home Health Aide............................          $64.94         x 1.0000          x 1.001           $65.00
Medical Social Services.....................          229.86         x 1.0000          x 1.001           230.09
Occupational Therapy........................          157.83         x 1.0000          x 1.001           157.99
Physical Therapy............................          156.76         x 1.0000          x 1.001           156.92
Skilled Nursing.............................          143.40         x 1.0000          x 1.001           143.54
Speech-Language Pathology...................          170.38         x 1.0000          x 1.001           170.55
----------------------------------------------------------------------------------------------------------------


[[Page 32372]]

d. Low-Utilization Payment Adjustment (LUPA) Add-On Factors
    LUPA episodes that occur as the only episode or as an initial 
episode in a sequence of adjacent episodes are adjusted by applying an 
additional amount to the LUPA payment before adjusting for area wage 
differences. In the CY 2014 HH PPS final rule (78 FR 72305), we changed 
the methodology for calculating the LUPA add-on amount by finalizing 
the use of three LUPA add-on factors: 1.8451 for SN; 1.6700 for PT; and 
1.6266 for SLP. We multiply the per-visit payment amount for the first 
SN, PT, or SLP visit in LUPA episodes that occur as the only episode or 
an initial episode in a sequence of adjacent episodes by the 
appropriate factor to determine the LUPA add-on payment amount. For 
example, in the case of HHAs that do submit the required quality data, 
for LUPA episodes that occur as the only episode or an initial episode 
in a sequence of adjacent episodes, if the first skilled visit is SN, 
the payment for that visit will be $270.14 (1.8451 multiplied by 
$146.41), subject to area wage adjustment.
e. CY 2019 Non-Routine Medical Supply (NRS) Payment Rates
    All medical supplies (routine and nonroutine) must be provided by 
the HHA while the patient is under a home health plan of care. Examples 
of supplies that can be considered non-routine include dressings for 
wound care, I.V. supplies, ostomy supplies, catheters, and catheter 
supplies. Payments for NRS are computed by multiplying the relative 
weight for a particular severity level by the NRS conversion factor. To 
determine the CY 2019 NRS conversion factor, we updated the CY 2018 NRS 
conversion factor ($53.03) by the CY 2019 home health payment update 
percentage of 2.1 percent. We did not apply a standardization factor as 
the NRS payment amount calculated from the conversion factor is not 
wage or case-mix adjusted when the final claim payment amount is 
computed. The proposed NRS conversion factor for CY 2019 is shown in 
Table 22.

   Table 22--CY 2019 NRS Conversion Factor for HHAs That Do Submit the
                          Required Quality Data
------------------------------------------------------------------------
                                                           CY 2019 NRS
     CY 2018 NRS conversion factor         CY 2019 HH       conversion
                                         payment update       factor
------------------------------------------------------------------------
$53.03................................         x 1.021           $54.14
------------------------------------------------------------------------

    Using the CY 2019 NRS conversion factor, the payment amounts for 
the six severity levels are shown in Table 23.

             Table 23--CY 2019 NRS Payment Amounts for HHAs That Do Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                    Points                         CY 2019 NRS
                        Severity level                            (scoring)     Relative weight  payment amounts
----------------------------------------------------------------------------------------------------------------
1............................................................               0           0.2698          $ 14.61
2............................................................         1 to 14           0.9742            52.74
3............................................................        15 to 27           2.6712           144.62
4............................................................        28 to 48           3.9686           214.86
5............................................................        49 to 98           6.1198           331.33
6............................................................             99+          10.5254           569.85
----------------------------------------------------------------------------------------------------------------

    For HHAs that do not submit the required quality data, we updated 
the CY 2018 NRS conversion factor ($53.03) by the CY 2019 home health 
payment update percentage of 2.1 percent minus 2 percentage points. The 
proposed CY 2019 NRS conversion factor for HHAs that do not submit 
quality data is shown in Table 24.

 Table 24--CY 2019 NRS Conversion Factor for HHAs That Do Not Submit the
                          Required Quality Data
------------------------------------------------------------------------
                                           CY 2019 HH
                                         payment update
                                           percentage      CY 2019 NRS
     CY 2018 NRS conversion factor          minus 2         conversion
                                           percentage         factor
                                             points
------------------------------------------------------------------------
$53.03................................         x 1.001           $53.08
------------------------------------------------------------------------

    The payment amounts for the various severity levels based on the 
updated conversion factor for HHAs that do not submit quality data are 
calculated in Table 25.

[[Page 32373]]



           Table 25--CY 2019 NRS Payment Amounts for HHAs That Do Not Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                    Points                         CY 2019 NRS
                        Severity level                            (scoring)     Relative weight  payment amounts
----------------------------------------------------------------------------------------------------------------
1............................................................               0           0.2698          $ 14.32
2............................................................         1 to 14           0.9742            51.71
3............................................................        15 to 27           2.6712           141.79
4............................................................        28 to 48           3.9686           210.65
5............................................................        49 to 98           6.1198           324.84
6............................................................             99+          10.5254           558.69
----------------------------------------------------------------------------------------------------------------

D. Proposed Rural Add-On Payments for CYs 2019 Through 2022

1. Background
    Section 421(a) of the MMA required, for HH services furnished in a 
rural areas (as defined in section 1886(d)(2)(D) of the Act), for 
episodes or visits ending on or after April 1, 2004, and before April 
1, 2005, that the Secretary increase the payment amount that otherwise 
would have been made under section 1895 of the Act for the services by 
5 percent.
    Section 5201 of the DRA amended section 421(a) of the MMA. The 
amended section 421(a) of the MMA required, for HH services furnished 
in a rural area (as defined in section 1886(d)(2)(D) of the Act), on or 
after January 1, 2006, and before January 1, 2007, that the Secretary 
increase the payment amount otherwise made under section 1895 of the 
Act for those services by 5 percent.
    Section 3131(c) of the Affordable Care Act amended section 421(a) 
of the MMA to provide an increase of 3 percent of the payment amount 
otherwise made under section 1895 of the Act for HH services furnished 
in a rural area (as defined in section 1886(d)(2)(D) of the Act), for 
episodes and visits ending on or after April 1, 2010, and before 
January 1, 2016.
    Section 210 of the MACRA amended section 421(a) of the MMA to 
extend the rural add-on by providing an increase of 3 percent of the 
payment amount otherwise made under section 1895 of the Act for HH 
services provided in a rural area (as defined in section 1886(d)(2)(D) 
of the Act), for episodes and visits ending before January 1, 2018.
    Section 50208(a) of the Bipartisan Budget Act of 2018 amended 
section 421(a) of the MMA to extend the rural add-on by providing an 
increase of 3 percent of the payment amount otherwise made under 
section 1895 of the Act for HH services provided in a rural area (as 
defined in section 1886(d)(2)(D) of the Act), for episodes and visits 
ending before January 1, 2019. This extension of the rural add-on 
payments was implemented as described in CMS Transmittal 2047 published 
on March 20, 2018.
2. Proposed Rural Add-On Payments for CYs 2019 Through 2022
    Section 50208(a)(1)(D) of the BBA of 2018 adds a new subsection (b) 
to section 421 of the MMA to provide rural add-on payments for episodes 
and visits ending during CYs 2019 through 2022 . It also mandates 
implementation of a new methodology for applying those payments. Unlike 
previous rural add-ons, which were applied to all rural areas 
uniformly, the extension provides varying add-on amounts depending on 
the rural county (or equivalent area) classification by classifying 
each rural county (or equivalent area) into one of three distinct 
categories.
    Specifically, section 421(b)(1) of the MMA, as amended by section 
50208 of the BBA of 2018, provides that rural counties (or equivalent 
areas) would be placed into one of three categories for purposes of HH 
rural add-on payments: (1) Rural counties and equivalent areas in the 
highest quartile of all counties and equivalent areas based on the 
number of Medicare home health episodes furnished per 100 individuals 
who are entitled to, or enrolled for, benefits under part A of Medicare 
or enrolled for benefits under part B of Medicare only, but not 
enrolled in a Medicare Advantage plan under part C of Medicare, as 
provided in section 421(b)(1)(A) of the MMA (the ``High utilization'' 
category); (2) rural counties and equivalent areas with a population 
density of 6 individuals or fewer per square mile of land area and are 
not included in the category provided in section 421(b)(1)(A) of the 
MMA, as provided in section 421(b)(1)(B) of the MMA (the Low population 
density'' category); and (3) rural counties and equivalent areas not in 
the categories provided in either sections 421(b)(1)(A) or 421(b)(1)(B) 
of the MMA, as provided in section 421(b)(1)(C) of the MMA (the ``All 
other'' category). The list of counties and equivalent areas used in 
our analysis is based on the CY 2015 HH PPS wage index file, which 
includes the names of the constituent counties for each rural and urban 
area designation. We used the 2015 HH PPS wage index file as the basis 
for our analysis because the 2015 HH PPS wage index file already 
included SSA state and county codes not normally included on the HH PPS 
wage index files, but were included in the 2015 HH PPS wage index file 
due to the transition to new OMB geographic area delineations that 
year. The CY 2015 HH PPS wage index file is available for download at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Home-Health-Prospective-Payment-System-Regulations-and-Notices-Items/CMS-1611-F.html. This file includes 3,246 counties and 
equivalent areas and their urban and rural status and uses the OMB's 
geographic area delineations, as described in section III.C.3 of this 
proposed rule. We updated the information contained in this file to 
include any revisions to the geographic area delineations as published 
by the OMB in their publicly available bulletins that would reflect a 
change in urban and rural status. The states, the District of Columbia, 
and the U.S. territories of Guam, Puerto Rico, and the U.S. Virgin 
Islands are included in the analysis file containing 3,246 counties and 
equivalent areas. Of the 3,246 total counties and equivalent areas that 
were used in our analysis, 2,006 of these are considered rural for 
purposes of determining HH rural add-on payments. We identify 
equivalent areas based on the definition of equivalent entities as 
defined by the OMB in their most recent bulletin (No. 18-03) available 
at https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf.\13\ We consider boroughs and a municipality in 
Alaska, parishes in Louisiana, municipios in Puerto Rico, and 
independent cities in

[[Page 32374]]

Maryland, Missouri, Nevada, and Virginia as equivalent areas.
---------------------------------------------------------------------------

    \13\ ``Revised Delineations of Metropolitan Statistical Areas, 
Micropolitan Statistical Areas, and Combined Statistical Areas, and 
Guidance on Uses of the Delineations of These Areas''. OMB BULLETIN 
NO. 18-03. April 10, 2018. https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf.
---------------------------------------------------------------------------

    Under section 421(b)(1)(A) of the MMA, one category of rural 
counties and equivalent areas for purposes of the HH rural add-on 
payment is a category comprised of rural counties or equivalent areas 
that are in the highest quartile of all counties or equivalent areas 
based on the number of Medicare home health episodes furnished per 100 
Medicare beneficiaries. Section 421(b)(2)(B)(i) of the MMA requires the 
use of data from 2015 to determine which counties or equivalent areas 
are in the highest quartile of home health utilization for the category 
described under section 421(b)(1)(A) of the MMA, that is, the ``High 
utilization'' category. Section 421(b)(2)(B)(ii) of the MMA requires 
that data from the territories are to be excluded in determining which 
counties or equivalent areas are in the highest quartile of home health 
utilization and requires that the territories be excluded from the 
category described by section 421(b)(1)(A) of the MMA. Under section 
421(b)(2)(B)(iii) of the MMA, the Secretary may exclude data from 
counties or equivalent areas in rural areas with a low volume of home 
health episodes in determining which counties or equivalent areas are 
in the highest quartile of home health utilization. If data is excluded 
for a county or equivalent area, section 421(b)(2)(B)(iii) of the MMA 
requires that the county or equivalent area be excluded from the 
category described by section 421(b)(1)(A) of the MMA (the ``High 
utilization'' category).
    We used CY 2015 claims data and 2015 data from the Medicare 
Beneficiary Summary File to classify rural counties and equivalent 
areas into the ``High utilization'' category. We propose to classify a 
rural county or equivalent area into this category if the county or 
equivalent area is in the highest quartile (top 25th percentile) of all 
(urban and rural) counties and equivalent areas based on the ratio of 
Medicare home health episodes furnished per 100 Medicare enrollees. The 
Medicare Beneficiary Summary File contained information on the Social 
Security Administration (SSA) state and county code of the 
beneficiary's mailing address and information on enrollment in Medicare 
Part A, B, and C during 2015. The claims data and information from the 
Medicare Beneficiary Summary File were pulled from the Chronic 
Condition Warehouse Virtual Research Data Center during December 2017. 
We used the claims data to determine how many home health episodes 
(excluding Requests for Anticipated Payments (RAPs) and zero payment 
episodes) occurred in each state and county or equivalent area. We 
assigned each home health episode to the state and county code of the 
beneficiary's mailing address. As stipulated by section 
421(b)(2)(B)(ii) of the MMA, we excluded any data from the territories 
of Guam, Puerto Rico, and the U.S. Virgin Islands for determining which 
rural counties and equivalent areas belong in the ``High utilization'' 
category. We note that the territories of American Samoa and the 
Northern Mariana Islands were not included in the CY 2015 HH PPS wage 
index file to identify counties or equivalent areas for these 
territories so no data from these territories were included in 
determining the ``High utilization'' category. As we are not aware of 
any Medicare home health services being furnished in these two 
territories in recent years, we will address any application of home 
health rural add-on payments for these territories in the future should 
Medicare home health services be furnished in them. Therefore, counties 
and equivalent areas in the territories of American Samoa, Guam, the 
Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands are 
not included in the ``High utilization'' category, as required by 
section 421(b)(2)(B)(ii) of the MMA. In addition, under the authority 
granted to the Secretary (by section 421(b)(2)(B)(iii) of the MMA) to 
exclude data from counties or equivalent areas in rural areas with a 
low volume of home health episodes, we excluded data from rural 
counties and equivalent areas that had 10 or fewer episodes during 2015 
for determining which counties and equivalent areas belong in the 
``High utilization'' category. We believe that using a threshold of 10 
or fewer episodes is a reasonable threshold for defining low volume, in 
accordance with section 421(b)(2)(B)(iii) of the MMA. After excluding 
data from (1) the territories of Guam, Puerto Rico, and the U.S. Virgin 
Islands and (2) counties and equivalent areas that had 10 or fewer 
episodes during 2015, we determined the number of home health episodes 
furnished per 100 enrollees for the remaining counties and equivalent 
areas. We determined that the counties or equivalent areas in the 
highest quartile have a ratio of episodes to beneficiaries that is at 
or above 17.72487. The highest quartile consisted of 778 counties or 
equivalent areas. Of those 778 counties or equivalent areas, 510 are 
rural and, therefore, we propose to classify these 510 rural counties 
or equivalent areas into the ``High utilization'' category.
    Under section 421(b)(1)(B) of the MMA, another category of rural 
counties and equivalent areas for purposes of the HH rural add-on 
payment is a category comprised of rural counties or equivalent areas 
with a population density of 6 individuals or fewer per square mile of 
land area and that are not included in the ``High utilization'' 
category. Section 421(b)(2)(C) of the MMA requires that data from the 
2010 decennial Census be used for purposes of determining population 
density with respect to the category provided under section 
421(b)(1)(B) of the MMA, that is, the ``Low population density'' 
category.
    We used 2010 Census data gathered from the tables provided at: 
https://factfinder.census.gov/bkmk/table/1.0/en/DEC/10_SF1/GCTPH1.US05PR and https://www.census.gov/data/tables/time-series/dec/cph-series/cph-t/cph-t-8.html to determine which counties and 
equivalent areas have a population density of six individuals or fewer 
per square mile of land area.\14\ \15\ In examining the rural counties 
and equivalent areas that were not already classified into the ``High 
utilization'' category, we identified each rural county or equivalent 
area that had a population density of six individuals or fewer per 
square mile of land area. As a result of that analysis, we determined 
there are 334 rural counties or equivalent areas that have a population 
density of six individuals or fewer per square mile of land area and 
that are not already classified into the ``High utilization'' category. 
We propose to classify 334 rural counties or equivalent areas into the 
``Low population density'' category.
---------------------------------------------------------------------------

    \14\ ``Population, Housing Units, Area, and Density: 2010--
United States--County by State; and for Puerto Rico 2010 Census 
Summary File 1''. https://factfinder.census.gov/bkmk/table/1.0/en/DEC/10_SF1/GCTPH1.US05PR.
    \15\ ``Population, Housing Units, Land Area, and Density for 
U.S. Island Areas: 2010 (CPH-T-8)''. 10/28/2013. https://www.census.gov/data/tables/time-series/dec/cph-series/cph-t/cph-t-8.html.
---------------------------------------------------------------------------

    Lastly, section 421(b)(1)(C) of the MMA provides for a category 
comprised of rural counties or equivalent areas that are not included 
in either the ``High utilization'' or the ``Low population density'' 
category. After determining which rural counties and equivalent areas 
should be classified into the ``High utilization'' and ``Low population 
density'' categories, we have determined that there are 1,162 remaining 
rural counties and equivalent areas that do not meet the criteria for 
inclusion in the ``High utilization'' or ``Low population density'' 
categories. We propose to classify these 1,162 rural counties and

[[Page 32375]]

equivalent areas into the ``All other'' category.
    Section 421(b)(1) of the MMA specifies varying rural add-on payment 
percentages and varying durations of rural add-on payments for home 
health services furnished in a rural county or equivalent area 
according to which category described in section 421(b)(1)(A), 
421(b)(1)(B), or 421(b)(1)(C) of the MMA that the rural county or 
equivalent area is classified into. The rural add-on payment 
percentages and duration of rural add-on payments are shown in Table 
26. The national standardized 60-day episode payment rate, the national 
per-visit rates, and the NRS conversion factor will be increased by the 
rural add-on payment percentages as noted in Table 26 when services are 
provided in rural areas. The HH Pricer module, located within CMS' 
claims processing system, will increase the base payment rates provided 
in Tables 18 through 25 by the appropriate rural add-on percentage 
prior to applying any case-mix and wage index adjustments.

                            Table 26--HH PPS Rural Add-On Percentages, CYs 2019-2022
----------------------------------------------------------------------------------------------------------------
                    Category                        CY 2019 (%)     CY 2020 (%)     CY 2021 (%)     CY 2022 (%)
----------------------------------------------------------------------------------------------------------------
High utilization................................             1.5             0.5  ..............  ..............
Low population density..........................             4.0             3.0             2.0             1.0
All other.......................................             3.0             2.0             1.0  ..............
----------------------------------------------------------------------------------------------------------------

    Section 421(b)(2)(A) of the MMA provides that the Secretary shall 
make a determination only for a single time as to which category under 
sections 421(b)(1)(A), 421(b)(1)(B), or 421(b)(1)(C) of the MMA that a 
rural county or equivalent area is classified into, and that the 
determination applies for the entire duration of the period for which 
rural add-on payments are in place under section 421(b) of the MMA. We 
propose that our proposed classifications of rural counties and 
equivalent areas in the ``High utilization'', ``Low population 
density'', and ``All other'' categories would be applicable throughout 
the period of rural add-on payments established under section 421(b) of 
the MMA and there would be no changes in classifications. This would 
mean that a rural county or equivalent area classified into the ``High 
utilization'' category would remain in that category through CY 2022 
even after rural add-on payments for that category ends after CY 2020. 
Similarly, a rural county or equivalent area classified into the ``All 
other'' category would remain in that category through CY 2022 even 
after rural add-on payments for that category ends after CY 2021. A 
rural county or equivalent area classified into the ``Low population 
density'' category would remain in that category through CY 2022.
    Section 421(b)(3) of the MMA provides that there shall be no 
administrative or judicial review of the classification determinations 
made for the rural add-on payments under section 421(b)(1) of the MMA.
    Section 50208(a)(2) of the Bipartisan Budget Act of 2018 amended 
section 1895(c) of the Act by adding a new requirement set out at 
section 1895(c)(3) of the Act. This requirement states that no claim 
for home health services may be paid unless ``in the case of home 
health services furnished on or after January 1, 2019, the claim 
contains the code for the county (or equivalent area) in which the home 
health service was furnished.'' This information will be necessary in 
order to calculate the rural add-on payments. We are proposing that 
HHAs enter the FIPS state and county code, rather than the SSA state 
and county code, on the claim. Many HHAs are more familiar with using 
FIPS state and county codes since HHAs in a number of States are 
already using FIPS state and county codes for State-mandated reporting 
programs. Our analysis is based entirely on the SSA state and county 
codes as these are the codes that are included in the Medicare 
Beneficiary Summary File. We cross-walked the SSA state and county 
codes used in our analysis to the FIPS state and county codes in order 
to provide HHAs with the corresponding FIPS state and county codes that 
should be reported on their claims.
    The data used to categorize each county or equivalent area is 
available in the Downloads section associated with the publication of 
this proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Home-Health-Prospective-Payment-System-Regulations-and-Notices-Items/CMS-1689-P.html. In addition, an Excel 
file containing the rural county or equivalent area names, their FIPS 
state and county codes, and their designation into one of the three 
rural add-on categories is available for download.
    We are soliciting comments regarding our application of the 
methodology specified by section 50208 of the Bipartisan Budget Act of 
2018.

E. Proposed Payments for High-Cost Outliers Under the HH PPS

1. Background
    Section 1895(b)(5) of the Act allows for the provision of an 
addition or adjustment to the home health payment amount otherwise made 
in the case of outliers because of unusual variations in the type or 
amount of medically necessary care. Under the HH PPS, outlier payments 
are made for episodes whose estimated costs exceed a threshold amount 
for each Home Health Resource Group (HHRG). The episode's estimated 
cost was established as the sum of the national wage-adjusted per-visit 
payment amounts delivered during the episode. The outlier threshold for 
each case-mix group or Partial Episode Payment (PEP) adjustment is 
defined as the 60-day episode payment or PEP adjustment for that group 
plus a fixed-dollar loss (FDL) amount. For the purposes of the HH PPS, 
the FDL amount is calculated by multiplying the HH FDL ratio by a 
case's wage-adjusted national, standardized 60-day episode payment 
rate, which yields an FDL dollar amount for the case. The outlier 
threshold amount is the sum of the wage and case-mix adjusted PPS 
episode amount and wage-adjusted FDL amount. The outlier payment is 
defined to be a proportion of the wage-adjusted estimated cost beyond 
the wage-adjusted threshold. The proportion of additional costs over 
the outlier threshold amount paid as outlier payments is referred to as 
the loss-sharing ratio.
    As we noted in the CY 2011 HH PPS final rule (75 FR 70397 through 
70399), section 3131(b)(1) of the Affordable Care Act amended section 
1895(b)(3)(C) of the Act, and required the Secretary to reduce the HH 
PPS payment rates such that aggregate HH PPS payments were

[[Page 32376]]

reduced by 5 percent. In addition, section 3131(b)(2) of the Affordable 
Care Act amended section 1895(b)(5) of the Act by redesignating the 
existing language as section 1895(b)(5)(A) of the Act, and revising the 
language to state that the total amount of the additional payments or 
payment adjustments for outlier episodes could not exceed 2.5 percent 
of the estimated total HH PPS payments for that year. Section 
3131(b)(2)(C) of the Affordable Care Act also added section 
1895(b)(5)(B) of the Act which capped outlier payments as a percent of 
total payments for each HHA at 10 percent.
    As such, beginning in CY 2011, we reduce payment rates by 5 percent 
and target up to 2.5 percent of total estimated HH PPS payments to be 
paid as outliers. To do so, we first returned the 2.5 percent held for 
the target CY 2010 outlier pool to the national, standardized 60-day 
episode rates, the national per visit rates, the LUPA add-on payment 
amount, and the NRS conversion factor for CY 2010. We then reduced the 
rates by 5 percent as required by section 1895(b)(3)(C) of the Act, as 
amended by section 3131(b)(1) of the Affordable Care Act. For CY 2011 
and subsequent calendar years we target up to 2.5 percent of estimated 
total payments to be paid as outlier payments, and apply a 10 percent 
agency-level outlier cap.
    In the CY 2017 HH PPS proposed and final rules (81 FR 43737 through 
43742 and 81 FR 76702), we described our concerns regarding patterns 
observed in home health outlier episodes. Specifically, we noted that 
the methodology for calculating home health outlier payments may have 
created a financial incentive for providers to increase the number of 
visits during an episode of care in order to surpass the outlier 
threshold; and simultaneously created a disincentive for providers to 
treat medically complex beneficiaries who require fewer but longer 
visits. Given these concerns, in the CY 2017 HH PPS final rule (81 FR 
76702), we finalized changes to the methodology used to calculate 
outlier payments, using a cost-per-unit approach rather than a cost-
per-visit approach. This change in methodology allows for more accurate 
payment for outlier episodes, accounting for both the number of visits 
during an episode of care and also the length of the visits provided. 
Using this approach, we now convert the national per-visit rates into 
per 15-minute unit rates. These per 15-minute unit rates are used to 
calculate the estimated cost of an episode to determine whether the 
claim will receive an outlier payment and the amount of payment for an 
episode of care. In conjunction with our finalized policy to change to 
a cost-per-unit approach to estimate episode costs and determine 
whether an outlier episode should receive outlier payments, in the CY 
2017 HH PPS final rule we also finalized the implementation of a cap on 
the amount of time per day that would be counted toward the estimation 
of an episode's costs for outlier calculation purposes (81 FR 76725). 
Specifically, we limit the amount of time per day (summed across the 
six disciplines of care) to 8 hours (32 units) per day when estimating 
the cost of an episode for outlier calculation purposes.
    We plan to publish the cost-per-unit amounts for CY 2019 in the 
rate update change request, which is issued after the publication of 
the CY 2019 HH PPS final rule. We note that in the CY 2017 HH PPS final 
rule (81 FR 76724), we stated that we did not plan to re-estimate the 
average minutes per visit by discipline every year. Additionally, we 
noted that the per-unit rates used to estimate an episode's cost will 
be updated by the home health update percentage each year, meaning we 
would start with the national per-visit amounts for the same calendar 
year when calculating the cost-per-unit used to determine the cost of 
an episode of care (81 FR 76727). We note that we will continue to 
monitor the visit length by discipline as more recent data become 
available, and we may propose to update the rates as needed in the 
future.
2. Proposed Fixed Dollar Loss (FDL) Ratio
    For a given level of outlier payments, there is a trade-off between 
the values selected for the FDL ratio and the loss-sharing ratio. A 
high FDL ratio reduces the number of episodes that can receive outlier 
payments, but makes it possible to select a higher loss-sharing ratio, 
and therefore, increase outlier payments for qualifying outlier 
episodes. Alternatively, a lower FDL ratio means that more episodes can 
qualify for outlier payments, but outlier payments per episode must 
then be lower.
    The FDL ratio and the loss-sharing ratio must be selected so that 
the estimated total outlier payments do not exceed the 2.5 percent 
aggregate level (as required by section 1895(b)(5)(A) of the Act). 
Historically, we have used a value of 0.80 for the loss-sharing ratio 
which, we believe, preserves incentives for agencies to attempt to 
provide care efficiently for outlier cases. With a loss-sharing ratio 
of 0.80, Medicare pays 80 percent of the additional estimated costs 
above the outlier threshold amount.
    Simulations based on CY 2015 claims data (as of June 30, 2016) 
completed for the CY 2017 HH PPS final rule showed that outlier 
payments were estimated to represent approximately 2.84 percent of 
total HH PPS payments in CY 2017, and as such, we raised the FDL ratio 
from 0.45 to 0.55. We stated that raising the FDL ratio to 0.55, while 
maintaining a loss-sharing ratio of 0.80, struck an effective balance 
of compensating for high-cost episodes while still meeting the 
statutory requirement to target up to, but no more than, 2.5 percent of 
total payments as outlier payments (81 FR 76726). The national, 
standardized 60-day episode payment amount is multiplied by the FDL 
ratio. That amount is wage-adjusted to derive the wage-adjusted FDL 
amount, which is added to the case-mix and wage-adjusted 60-day episode 
payment amount to determine the outlier threshold amount that costs 
have to exceed before Medicare would pay 80 percent of the additional 
estimated costs.
    For this proposed rule, simulating payments using preliminary CY 
2017 claims data (as of March 2, 2018) and the CY 2018 HH PPS payment 
rates (82 FR 51676), we estimate that outlier payments in CY 2018 would 
comprise 2.30 percent of total payments. Based on simulations using CY 
2017 claims data (as of March 2, 2018) and the proposed CY 2019 payment 
rates presented in section III.C.4 of this proposed rule, we estimate 
that outlier payments would constitute approximately 2.32 percent of 
total HH PPS payments in CY 2019. Our simulations show that the FDL 
ratio would need to be changed from 0.55 to 0.51 to pay up to, but no 
more than, 2.5 percent of total payments as outlier payments in CY 
2019.
    Given the statutory requirement that total outlier payments not 
exceed 2.5 percent of the total payments estimated to be made based 
under the HH PPS, we are proposing to lower the FDL ratio for CY 2019 
from 0.55 to 0.51 to better approximate the 2.5 percent statutory 
maximum. However, we note that we are not proposing a change to the 
loss-sharing ratio (0.80) for the HH PPS to remain consistent with 
payment for high-cost outliers in other Medicare payment systems (for 
example, IRF PPS, IPPS, etc.). We note that in the final rule, we will 
update our estimate of outlier payments as a percent of total HH PPS 
payments using the most current and complete year of HH PPS data (CY 
2017 claims data as of June 30, 2018 or later) and therefore, we may 
adjust the final FDL ratio accordingly. We invite public comments on 
the

[[Page 32377]]

proposed change to the FDL ratio for CY 2019.
3. Home Health Outlier Payments: Clinical Example
    In recent months, concerns regarding the provision of home health 
care for Medicare patients with chronic, complex conditions have been 
raised by stakeholders as well as the press.<SUP>16 17 18 19</SUP> News 
stories and anecdotal reports indicate that Medicare patients with 
chronic conditions may be encountering difficulty in accessing home 
health care if the goal of home health care is to maintain or prevent 
further decline of the patient's condition rather than improvement of 
the patient's condition. While patients must require skilled care to be 
eligible to receive services under the Medicare home health benefit, as 
outlined in regulation at 42 CFR 409.42(c), we note that coverage does 
not turn on the presence or absence of an individual's potential for 
improvement, but rather on the beneficiary's need for skilled care. 
Skilled care is covered where such services are necessary to maintain 
the patient's current condition or prevent or slow further 
deterioration so long as the beneficiary requires skilled care for the 
services to be safely and effectively provided. Additionally, there 
appears to be confusion among the HHA provider community regarding 
possible Medicare payment through the HH PPS, as it appears that some 
perceive that payment is somewhat fixed and not able to account for 
home health stays with higher costs.
---------------------------------------------------------------------------

    \16\ https://www.npr.org/sections/health-shots/2018/01/17/578423012/home-care-agencies-often-wrongly-deny-medicare-help-to-the-chronically-ill.
    \17\ http://www.alsa.org/als-care/resources/fyi/medicare-and-home-health-care.html.
    \18\ https://patientworthy.com/2018/01/31/chronically-ill-are-being-denied-medicare-coverage-by-home-care-agencies/.
    \19\ https://alsnewstoday.com/2018/05/09/als-medicare-cover-home-healthcare/.
---------------------------------------------------------------------------

    The news stories referenced an individual with amyotrophic lateral 
sclerosis (ALS), also known as Lou Gehrig's disease, and the 
difficulties encountered in finding Medicare home health care. Below we 
describe a clinical example of how care for a patient with ALS could 
qualify for an additional outlier payment, which would serve to offset 
unusually high costs associated with providing home health to a patient 
with unusual variations in the amount of medically necessary care. This 
example, using payment policies in place for CY 2018, is provided for 
illustrative purposes only. We hope that in providing the example 
below, which illustrates how HHAs could be paid by Medicare for 
providing care to patients with higher resource use in their homes, and 
by reiterating that the patient's condition does not need to improve 
for home health services to be covered by Medicare, that there will be 
a better understanding of Medicare coverage policies and how outlier 
payments promote access to home health services for such patients under 
the HH PPS.
a. Clinical Scenario
    Amyotrophic Lateral Sclerosis (ALS) is a progressive neuromuscular 
degenerative disease. The incidence rates of ALS have been increasing 
over the last few decades, and the peak incidence rate occurs at age 
75.\20\ The prevalence rate of ALS in the United States is 4.3 per 
100,000 population.\21\ Half of all people affected with ALS live at 
least 3 or more years after diagnosis. Twenty percent live 5 years or 
more; up to 10 percent will live more than 10 years.\22\ Because of the 
progressive nature of this disease, care needs change and generally 
intensify as different body systems are affected. As such, patients 
with ALS often require a multidisciplinary approach to meet their care 
needs.
---------------------------------------------------------------------------

    \20\ Worms PM, The epidemiology of motor neuron diseases: A 
review of recent studies. J Neurol Sci. 2001;191(1-2):3.
    \21\ Mehta P, Prevalence of Amyotrophic Lateral Sclerosis--
United States, 2012-2013. MMWR Surveill Summ. 2016;65(8):1. Epub 
2016 Aug 5.
    \22\ http://www.alsa.org.
---------------------------------------------------------------------------

    The clinical care of a beneficiary with ALS typically includes the 
ongoing assessment of and treatment for many impacts to the body 
systems. As a part of a home health episode, a skilled nurse could 
assess the patient for shortness of breath, mucus secretions, 
sialorrhea, pressure sores, and pain. From these assessments, the nurse 
could speak with the doctor about changes to the care plan. A nurse's 
aide could provide assistance with bathing, dressing, toileting, and 
transferring. Physical therapy services could also help the patient 
with range of motion exercises, adaptive transfer techniques, and 
assistive devices in order to maintain a level of function.
    The following is a description of how the provision of services per 
the home health plan of care could emerge for a beneficiary with ALS 
who qualifies for the Medicare home health benefit. We note that this 
example is provided for illustrative purposes only and does not 
constitute a specific Medicare payment scenario.
b. Example One: Home Health Episodes 1 and 2
    A beneficiary with ALS may be assessed by a physician in the 
community and subsequently be deemed to require home health services 
for skilled nursing, physical therapy, occupational therapy, and a home 
health aide. The beneficiary could receive skilled nursing twice a week 
for 45 minutes to assess dyspnea when transferring to a bedside 
commode, stage two pressure ulcer at the sacrum, and pain status. In 
addition, a home health aide could provide services for three hours in 
the morning and three hours in the afternoon on Monday, Wednesday, and 
Friday and two and a half hours in the morning and 2.5 hours in the 
afternoon on Tuesday and Thursdays to assist with bathing, dressing, 
and transferring. Physical therapy services twice a week for 45 minutes 
could be provided for adaptive transfer techniques, and occupational 
therapy services could be supplied twice a week for 45 minutes for 
assessment and teaching of assistive devices for activities of daily 
living to prevent or slow deterioration of the patient's condition. 
Given the patient's clinical presentation, for the purpose of this 
specific example, we will assign the patient payment group 40331 
(C3F3S1 with 20+ therapy visits).
    For the purposes of this example, we assume that services are 
rendered per week for a total of 8 weeks per home health episode. For 
both the first and second home health episodes of care, the calculation 
to determine outlier payment utilizing payment amounts and case mix 
weights for CY 2018, as described in the CY 2018 HH PPS final rule (82 
FR 51676), would be as follows, per 60-day episode:

                         Table 27--Clinical Scenario Calculation Table: Episodes 1 and 2
----------------------------------------------------------------------------------------------------------------
      HH outlier--CY 2018 illustrative values          Value     Operation    Adjuster      Equals      Output
----------------------------------------------------------------------------------------------------------------
National, Standardized 60-day Episode Payment Rate   $3,039.64  ...........  ..........  ...........  ..........

[[Page 32378]]

 
Case-Mix Weight for Payment Group 4.0331 (for           2.1359  ...........  ..........  ...........  ..........
 C3F3S1 for 20+ therapy ).........................
Case-Mix Adjusted Episode Payment Amount..........    3,039.64           *       2.1359           =     6,492.37
Labor Portion of the Case-Mix Adjusted Episode        6,492.37           *      0.78535           -     5,098.78
 Payment Amount...................................
Non-Labor Portion of the Case-Mix Adjusted Episode    6,492.37           *      0.21465           =     1,393.59
 Payment Amount...................................
Wage Index Value (Beneficiary resides in 31084,         1.2781  ...........  ..........  ...........  ..........
 Los Angeles-Long Beach-Glendale, CA).............
Wage-Adjusted Labor Portion of the Case-Mix           5,098.78           *       1.2781           =     6,516.75
 Adjusted Episode Payment Amount..................
NRS Payment Amount (Severity Level 2).............       51.66  ...........  ..........           =        51.66
                                                   -------------------------------------------------------------
    Total Case-Mix and Wage-Adjusted Episode        ..........  ...........  ..........           =     7,962.00
     Payment Amount (Wage-Adjusted Labor Portion
     plus Non-Labor Portion of the Case-Mix
     Adjusted Episode Payment Amount plus the NRS
     Amount)......................................
Total Wage-Adjusted Fixed Dollar Loss Amount:
    Fixed Dollar Loss Amount (National,               3,039.64           *         0.55           =     1,671.80
     Standardized 60-day Episode Payment Rate *
     FDL Ratio)...................................
    Labor Portion of the Fixed Dollar Loss Amount.    1,671.80           *      0.78535           =     1,312.95
    Non-Labor Amount of the Fixed Dollar Loss         1,671.80           *      0.21465           =       358.85
     Amount.......................................
    Wage-Adjusted Fixed Dollar Loss Amount........    1,312.95           *       1.2781           =     1,678.08
                                                   -------------------------------------------------------------
        Total Wage-Adjusted Fixed Dollar Loss         1,678.08           +       358.85           =     2,036.93
         Amount (Wage-Adjusted Labor Portion plus
         Non-Labor Portion of the Case-Mix
         Adjusted Fixed Dollar Loss Amount).......
Total Wage-Adjusted Imputed Cost Amount:
    National Per-Unit Payment Amount--Skilled            48.01  ...........  ..........  ...........  ..........
     Nursing......................................
    Number of 15-minute units (45 minutes = 3               48  ...........  ..........  ...........  ..........
     units twice per week for 8 weeks)............
    Imputed Skilled Nursing Visit Costs (National        48.01           *           48           =     2,304.48
     Per-Unit Payment Amount * Number of Units)...
    National Per-Unit Payment Amount--Home Health        15.46  ...........  ..........  ...........  ..........
     Aide.........................................
    Number of 15-minute units (28 hours per week =         896  ...........  ..........  ...........  ..........
     112 units per week for 8 weeks)..............
    Imputed Home Health Aide Costs (National Per-        15.46           *          896           =    13,852.16
     Unit Payment Amount * Number of Units).......
    National Per-Unit Payment Amount--Occupational       50.26  ...........  ..........  ...........  ..........
     Therapy (OT).................................
    Number of 15-minute units (45 minutes = 3               48  ...........  ..........  ...........  ..........
     units twice per week for 8 weeks)............
    Imputed OT Visit Costs (National Per-Unit            50.26           *           48           =     2,412.48
     Payment Amount * Number of Units)............
    National Per-Unit Payment Amount--Physical           50.46  ...........  ..........  ...........  ..........
     Therapy (PT).................................
    Number of 15-minute units (45 minutes = 3               48  ...........  ..........  ...........  ..........
     units twice per week for 8 weeks)............
    Imputed PT Visit Costs (National Per-Unit            50.46           *           48           =     2,422.08
     Payment Amount * Number of Units)............
                                                   -------------------------------------------------------------
        Total Imputed Cost Amount for all           ..........  ...........  ..........           =    20,991.20
         Disciplines..............................
    Labor Portion of the Imputed Costs for All       20,991.20           *      0.78535           =    16,485.44
     Disciplines..................................
    Non-Labor Portion of Imputed Cost Amount for     20,991.20           *      0.21465           =     4,505.76
     All Disciplines..............................
    CBSA Wage Index (Beneficiary resides in 31084,      1.2781  ...........  ..........  ...........  ..........
     Los Angeles-Long Beach-Glendale, CA).........
    Wage-Adjusted Labor Portion of the Imputed       16,485.44           *       1.2781           =    21,070.04
     Cost Amount for All Disciplines..............
                                                   -------------------------------------------------------------
        Total Wage-Adjusted Imputed Cost Amount      21,070.04           +     4,505.76           =    25,575.80
         (Wage-Adjusted Labor Portion of the
         Imputed Cost Amount plus Non-Labor
         Portion of the Imputed Cost Amount)......
Total Payment Per 60-Day Episode:
    Outlier Threshold Amount (Total Wage-Adjusted     2,036.93           +     7,962.00           =     9,998.93
     Fixed Dollar Loss Amount + Total Case-Mix and
     Wage-Adjusted Episode Payment Amount)........
    Total Wage-Adjusted Imputed Cost Amount--        25,575.80           -     9,998.93           =    15,576.87
     Outlier Threshold Amount (Total Wage-Adjusted
     Fixed Dollar Loss Amount + Total Case-Mix and
     Wage-Adjusted Episode Payment Amount)........
    Outlier Payment = Imputed Costs Greater Than     15,576.87           *         0.80           =    12,461.50
     the Outlier Threshold * Loss-Sharing Ratio
     (0.80).......................................
                                                   -------------------------------------------------------------
        Total Payment Per 60-Day Episode = Total      7,962.00           +    12,461.50           =    20,423.49
         Case-Mix and Wage-Adjusted Episode
         Payment Amount + Outlier Payment.........
----------------------------------------------------------------------------------------------------------------


[[Page 32379]]

    For Episodes 1 and 2 of this clinical scenario, the preceding 
calculation illustrates how HHAs are paid by Medicare for providing 
care to patients with higher resource use in their homes.
c. Example Two: Home Health Episodes 3 and 4
    ALS is a progressive disease such that the patient would most 
likely need care beyond a second 60-day HH episode. A beneficiary's 
condition could become more complex, such that the patient could 
require a gastrostomy tube, which could be placed during a hospital 
stay. The patient could be discharged to home for enteral nutrition to 
maintain weight and continuing care for his/her stage two pressure 
ulcer. Given the complexity of the beneficiary's condition in this 
example, the episode could remain at the highest level of care C3F3S1 
and would now fit into equation 4.
    For the purposes of this example, we assume that services are 
rendered per week for a total of 8 weeks per home health episode. For 
both the third and fourth home health episodes of care, the calculation 
to determine outlier payment utilizing payment amounts and case mix 
weights for CY 2018 as described in as described in the CY 2018 HH PPS 
final rule (82 FR 51676) would be as follows, per 60-day episode:

                            Table 28--Clinical Scenario Calculation: Episodes 3 and 4
----------------------------------------------------------------------------------------------------------------
      HH outlier--CY 2018 illustrative values          Value     Operation    Adjuster      Equals      Output
----------------------------------------------------------------------------------------------------------------
National, Standardized 60-day Episode Payment Rate   $3,039.64  ...........  ..........  ...........  ..........
Case-Mix Weight for Payment Group 4.0331 (for           2.1359  ...........  ..........  ...........  ..........
 C3F3S1 for 20+ therapy)..........................
Case-Mix Adjusted Episode Payment Amount..........    3,039.64           *       2.1359           =    $6,492.37
Labor Portion of the Case-Mix Adjusted Episode        6,492.37           *      0.78535           =     5,098.78
 Payment Amount...................................
Non-Labor Portion of the Case-Mix Adjusted Episode    6,492.37           *      0.21465           =     1,393.59
 Payment Amount...................................
Wage Index Value (Beneficiary resides in 31084,         1.2781  ...........  ..........  ...........  ..........
 Los Angeles-Long Beach-Glendale, CA).............
Wage-Adjusted Labor Portion of the Case-Mix           5,098.78           *       1.2781           =     6,516.75
 Adjusted Episode Payment Amount..................
NRS Payment Amount (Severity Level 2).............      324.53  ...........  ..........           =       324.53
                                                   -------------------------------------------------------------
    Total Case-Mix and Wage-Adjusted Episode        ..........  ...........  ..........           =     8,234.87
     Payment Amount (Wage-Adjusted Labor Portion
     plus Non-Labor Portion of the Case-Mix
     Adjusted Episode Payment Amount plus the NRS
     Amount)......................................
Total Wage-Adjusted Fixed Dollar Loss Amount:
    Fixed Dollar Loss Amount (National,               3,039.64           *         0.55           =     1,671.80
     Standardized 60-day Episode Payment Rate *
     FDL Ratio)...................................
    Labor Portion of the Fixed Dollar Loss Amount.    1,671.80           *      0.78535           =     1,312.95
    Non-Labor Amount of the Fixed Dollar Loss         1,671.80           *      0.21465           =       358.85
     Amount.......................................
    Wage-Adjusted Fixed Dollar Loss Amount........    1,312.95           *       1.2781           =     1,678.08
                                                   -------------------------------------------------------------
        Total Wage-Adjusted Fixed Dollar Loss         1,678.08           +       358.85           =     2,036.93
         Amount (Wage-Adjusted Labor Portion plus
         Non-Labor Portion of the Case-Mix
         Adjusted Fixed Dollar Loss Amount).......
Total Wage-Adjusted Imputed Cost Amount:
    National Per-Unit Payment Amount--Skilled            48.01  ...........  ..........  ...........  ..........
     Nursing......................................
    Number of 15-minute units (45 minutes = 3               48  ...........  ..........  ...........  ..........
     units twice per week for 8 weeks)............
    Imputed Skilled Nursing Visit Costs (National        48.01           *           48           =     2,304.48
     Per-Unit Payment Amount * Number of Units)...
    National Per-Unit Payment Amount--Home Health        15.46  ...........  ..........  ...........  ..........
     Aide.........................................
    Number of 15-minute units (28 hours per week =         896  ...........  ..........  ...........  ..........
     112 units per week for 8 weeks)..............
    Imputed Home Health Aide Costs (National Per-        15.46           *          896           =    13,852.16
     Unit Payment Amount * Number of Units).......
    National Per-Unit Payment Amount--Occupational       50.26  ...........  ..........  ...........  ..........
     Therapy (OT).................................
    Number of 15-minute units (45 minutes = 3               48  ...........  ..........  ...........  ..........
     units twice per week for 8 weeks)............
    Imputed OT Visit Costs (National Per-Unit            50.26           *           48           =     2,412.48
     Payment Amount * Number of Units)............
    National Per-Unit Payment Amount--Physical           50.46  ...........  ..........  ...........  ..........
     Therapy (PT).................................
    Number of 15-minute units (45 minutes = 3               48  ...........  ..........  ...........  ..........
     units twice per week for 8 weeks)............
    Imputed PT Visit Costs (National Per-Unit            50.46           *           48           =     2,422.08
     Payment Amount * Number of Units)............
                                                   -------------------------------------------------------------
        Total Imputed Cost Amount for all           ..........  ...........  ..........           =    20,991.20
         Disciplines..............................
    Labor Portion of the Imputed Costs for All       20,991.20           *      0.78535           =    16,485.44
     Disciplines..................................
    Non-Labor Portion of Imputed Cost Amount for     20,991.20           *      0.21465           =     4,505.76
     All Disciplines..............................
    CBSA Wage Index (Beneficiary resides in 31084,      1.2781  ...........  ..........  ...........  ..........
     Los Angeles-Long Beach-Glendale, CA).........
    Wage-Adjusted Labor Portion of the Imputed       16,485.44           *       1.2781           =    21,070.04
     Cost Amount for All Disciplines..............
                                                   -------------------------------------------------------------
        Total Wage-Adjusted Imputed Cost Amount      21,070.04           +     4,505.76           =    25,575.80
         (Wage-Adjusted Labor Portion of the
         Imputed Cost Amount plus Non-Labor
         Portion of the Imputed Cost Amount)......
Total Payment Per 60-Day Episode:

[[Page 32380]]

 
    Outlier Threshold Amount (Total Wage-Adjusted     2,036.93           +     8,234.87           =    10,271.80
     Fixed Dollar Loss Amount + Total Case-Mix and
     Wage-Adjusted Episode Payment Amount)........
    Total Wage-Adjusted Imputed Cost Amount-         25,575.80           -    10,271.80           =    15,304.00
     Outlier Threshold Amount (Total Wage-Adjusted
     Fixed Dollar Loss Amount + Total Case-Mix and
     Wage-Adjusted Episode Payment Amount)........
    Outlier Payment = Imputed Costs Greater Than     15,304.00           *         0.80           =    12,243.20
     the Outlier Threshold * Loss-Sharing Ratio
     (0.80).......................................
                                                   -------------------------------------------------------------
        Total Payment Per 60-Day Episode = Total     12,243.20           +     8,234.87           =    20,478.07
         Case-Mix and Wage-Adjusted Episode
         Payment Amount + Outlier Payment.........
----------------------------------------------------------------------------------------------------------------

    For Episodes 3 and 4 of this clinical scenario, the above 
calculation demonstrates how outlier payments could be made for 
patients with chronic, complex conditions under the HH PPS. We 
reiterate that outlier payments could provide payment to HHAs for those 
patients with higher resource use and that the patient's condition does 
not need to improve for home health services to be covered by Medicare. 
We appreciate the feedback we have received from the public on the 
outlier policy under the HH PPS and look forward to ongoing 
collaboration with stakeholders on any further refinements that may be 
warranted. We note that this example is presented for illustrative 
purposes only, and is not intended to suggest that all diagnoses of ALS 
should receive the grouping assignment or number of episodes described 
here. The CMS Grouper assigns these groups based on information in the 
OASIS.

F. Implementation of the Patient-Driven Groupings Model (PDGM) for CY 
2020

1. Background and Legislation, Overview, Data, and File Construction
a. Background and Legislation
    In the CY 2018 HH PPS proposed rule, we proposed an alternative 
case mix-adjustment methodology (known as the Home Health Groupings 
Model or HHGM), to be implemented for home health periods of care 
beginning on or after January 1, 2019. Ultimately this proposed 
alternative case-mix adjustment methodology, including a proposed 
change in the unit of payment from 60 days to 30 days, was not 
finalized in the CY 2018 HH PPS final rule in order to allow us 
additional time to consider public comments for potential refinements 
to the methodology (82 FR 51676).
    On February 9, 2018, the Bipartisan Budget Act of 2018 (BBA of 
2018) (Pub. L. 115-123) was signed into law. Section 51001(a)(1) of the 
BBA of 2018 amended section 1895(b)(2) of the Act by adding a new 
subparagraph (B) to require the Secretary to apply a 30-day unit of 
service for purposes of implementing the HH PPS, effective January 1, 
2020. Section 51001(a)(2)(A) of the BBA of 2018 added a new subclause 
(iv) under section 1895(b)(3)(A) of the Act, requiring the Secretary to 
calculate a standard prospective payment amount (or amounts) for 30-day 
units of service that end during the 12-month period beginning January 
1, 2020 in a budget neutral manner such that estimated aggregate 
expenditures under the HH PPS during CY 2020 are equal to the estimated 
aggregate expenditures that otherwise would have been made under the HH 
PPS during CY 2020 in the absence of the change to a 30-day unit of 
service. Section 1895(b)(3)(A)(iv) of the Act requires that the 
calculation of the standard prospective payment amount (or amounts) for 
CY 2020 be made before, and not affect the application of, the 
provisions of section 1895(b)(3)(B) of the Act. Section 
1895(b)(3)(A)(iv) of the Act additionally requires that in calculating 
the standard prospective payment amount (or amounts), the Secretary 
must make assumptions about behavioral changes that could occur as a 
result of the implementation of the 30-day unit of service under 
section 1895(b)(2)(B) of the Act and case-mix adjustment factors 
established under section 1895(b)(4)(B) of the Act. Section 
1895(b)(3)(A)(iv) of the Act further requires the Secretary to provide 
a description of the behavioral assumptions made in notice and comment 
rulemaking.
    Section 51001(a)(2)(B) of the BBA of 2018 also added a new 
subparagraph (D) to section 1895(b)(3) of the Act. Section 
1895(b)(3)(D)(i) of the Act requires the Secretary to annually 
determine the impact of differences between assumed behavior changes as 
described in section 1895(b)(3)(A)(iv) of the Act, and actual behavior 
changes on estimated aggregate expenditures under the HH PPS with 
respect to years beginning with 2020 and ending with 2026. Section 
1895(b)(3)(D)(ii) of the Act requires the Secretary, at a time and in a 
manner determined appropriate, through notice and comment rulemaking, 
provide for one or more permanent increases or decreases to the 
standard prospective payment amount (or amounts) for applicable years, 
on a prospective basis, to offset for such increases or decreases in 
estimated aggregate expenditures, as determined under section 
1895(b)(3)(D)(i) of the Act. Additionally, 1895(b)(3)(D)(iii) of the 
Act requires the Secretary, at a time and in a manner determined 
appropriate, through notice and comment rulemaking, to provide for one 
or more temporary increases or decreases to the payment amount for a 
unit of home health services for applicable years, on a prospective 
basis, to offset for such increases or decreases in estimated aggregate 
expenditures, as determined under section 1895(b)(3)(D)(i) of the Act. 
Such a temporary increase or decrease shall apply only with respect to 
the year for which such temporary increase or decrease is made, and the 
Secretary shall not take into account such a temporary increase or 
decrease in computing the payment amount for a unit of home health 
services for a subsequent year.
    Section 51001(a)(3) of the BBA of 2018 amends section 1895(b)(4)(B) 
of the Act by adding a new clause (ii) to require the Secretary to 
eliminate the use of therapy thresholds in the case-mix system for 2020 
and subsequent years. Lastly, section 51001(b)(4) of the BBA of 2018 
requires the Secretary to pursue notice and comment rulemaking no later 
than December 31, 2019 on a revised case-mix system for payment of home 
health services under the HH PPS
b. Overview
    To meet the requirement under section 51001(b)(4) of the BBA of 
2018 to engage in notice and comment rulemaking on a HH PPS case-mix 
system and to better align payment with

[[Page 32381]]

patient care needs and better ensure that clinically complex and ill 
beneficiaries have adequate access to home health care, we are 
proposing case-mix methodology refinements through the implementation 
of the Patient-Driven Groupings Model (PDGM). The proposed PDGM shares 
many of the features included in the alternative case mix-adjustment 
methodology proposed in the CY 2018 HH PPS proposed rule. We propose to 
implement the PDGM for home health periods of care beginning on or 
after January 1, 2020. The implementation of the PDGM will require 
provider education and training, updating and revising relevant 
manuals, and changing claims processing systems. Implementation 
starting in CY 2020 would provide opportunity for CMS, its contractors, 
and the agencies themselves to prepare. This patient-centered model 
groups periods of care in a manner consistent with how clinicians 
differentiate between patients and the primary reason for needing home 
health care. As required by section 1895(b)(2)(B) of the Act, we 
propose to use 30-day periods rather than the 60-day episode used in 
the current payment system. In addition, section 1895(b)(4)(B)(ii) of 
the Act eliminates the use of therapy thresholds in the case-mix 
adjustment for determining payment. The proposed PDGM does not use the 
number of therapy visits in determining payment. The change from the 
current case-mix adjustment methodology for the HH PPS, which relies 
heavily on therapy thresholds as a major determinant for payment and 
thus provides a higher payment for a higher volume of therapy provided, 
to the PDGM would remove the financial incentive to overprovide therapy 
in order to receive a higher payment. The PDGM would base case-mix 
adjustment for home health payment solely on patient characteristics, a 
more patient-focused approach to payment. Finally, the PDGM relies more 
heavily on clinical characteristics and other patient information (for 
example, diagnosis, functional level, comorbid conditions, admission 
source) to place patients into clinically meaningful payment 
categories. In total, there are 216 different payment groups in the 
PDGM.
    Costs during an episode/period of care are estimated based on the 
concept of resource use, which measures the costs associated with 
visits performed during a home health episode/period. For the current 
HH PPS case-mix weights, we use Wage Weighted Minutes of Care (WWMC), 
which uses data from the Bureau of Labor Statistics (BLS) reflecting 
the Home Health Care Service Industry. For the PDGM, we propose 
shifting to a Cost-Per-Minute plus Non-Routine Supplies (CPM + NRS) 
approach, which uses information from the Medicare Cost Report. The CPM 
+ NRS approach incorporates a wider variety of costs (such as 
transportation) compared to the BLS estimates and the costs are 
available for individual HHA providers while the BLS costs are 
aggregated for the Home Health Care Service industry.
    Similar to the current payment system, 30-day periods under the 
PDGM would be classified as ``early'' or ``late'' depending on when 
they occur within a sequence of 30-day periods. Under the current HH 
PPS, the first two 60-day episodes of a sequence of adjacent 60-day 
episodes are considered early, while the third 60-day episode of that 
sequence and any subsequent episodes are considered late. Under the 
PDGM, the first 30-day period is classified as early. All subsequent 
30-day periods in the sequence (second or later) are classified as 
late. We propose to adopt this timing classification for 30-day periods 
with the implementation of the PDGM for CY 2020. Similar to the current 
payment system, we propose that a 30-day period could not be considered 
early unless there was a gap of more than 60 days between the end of 
one period and the start of another. The comprehensive assessment would 
still be completed within 5 days of the start of care date and 
completed no less frequently than during the last 5 days of every 60 
days beginning with the start of care date, as currently required by 
Sec.  484.55, Condition of participation: Comprehensive assessment of 
patients. In addition, the plan of care would still be reviewed and 
revised by the HHA and the physician responsible for the home health 
plan of care no less frequently than once every 60 days, beginning with 
the start of care date, as currently required by Sec.  484.60(c), 
Condition of participation: Care planning, coordination of services, 
and quality of care.
    Under the PDGM, we propose that each period would be classified 
into one of two admission source categories --community or 
institutional-- depending on what healthcare setting was utilized in 
the 14 days prior to home health. The 30-day period would be 
categorized as institutional if an acute or post-acute care stay 
occurred in the 14 days prior to the start of the 30-day period of 
care. The 30-day period would be categorized as community if there was 
no acute or post-acute care stay in the 14 days prior to the start of 
the 30-day period of care.
    The PDGM would group 30-day periods into categories based on a 
variety of patient characteristics. We propose grouping periods into 
one of six clinical groups based on the principal diagnosis. The 
principal diagnosis reported would provide information to describe the 
primary reason for which patients are receiving home health services 
under the Medicare home health benefit. The proposed six clinical 
groups, are as follows:
    <bullet> Musculoskeletal Rehabilitation.
    <bullet> Neuro/Stroke Rehabilitation.
    <bullet> Wounds--Post-Op Wound Aftercare and Skin/Non-Surgical 
Wound Care.
    <bullet> Complex Nursing Interventions.
    <bullet> Behavioral Health Care (including Substance Use 
Disorders).
    <bullet> Medication Management, Teaching and Assessment (MMTA).
    Under the PDGM, we propose that each 30-day period would be placed 
into one of three functional levels. The level would indicate if, on 
average, given its responses on certain functional OASIS items, a 30-
day period is predicted to have higher costs or lower costs. We are 
proposing to assign roughly 33 percent of periods within each clinical 
group to each functional level. The criteria for assignment to each of 
the three functional levels may differ across each clinical group. The 
proposed functional level assignment under the PDGM is very similar to 
the functional level assignment in the current payment system. Finally, 
the PDGM includes a comorbidity adjustment category based on the 
presence of secondary diagnoses. We propose that, depending on a 
patient's secondary diagnoses, a 30-day period may receive ``no'' 
comorbidity adjustment, a ``low'' comorbidity adjustment, or a ``high'' 
comorbidity adjustment. For low-utilization payment adjustments (LUPAs) 
under the PDGM, we propose that the LUPA threshold would vary for a 30-
day period under the PDGM depending on the PDGM payment group to which 
it is assigned. For each payment group, we propose to use the 10th 
percentile value of visits to create a payment group specific LUPA 
threshold with a minimum threshold of at least 2 for each group.
    Figure BBB1 represents how each 30-day period of care would be 
placed into one of the 216 home health resource groups (HHRGs) under 
the proposed PDGM for CY 2020.
BILLING CODE 4210-01-P

[[Page 32382]]

<GRAPHIC><TIFF>TP12JY18.003

BILLING CODE 4210-01-C
c. Data and File Construction
    To create the PDGM proposed model and related analyses, a data file 
based on home health episodes of care as reported in Medicare home 
health claims was utilized. The claims data provide episode-level data 
(for example, episode From and Through Dates, total number of visits, 
HHRG, diagnoses), as well as visit-level data (visit date, visit length 
in 15-minute units, discipline of the staff, etc.). The claims also 
provide data on whether NRS was provided during the episode and total 
charges for NRS.
    The core file for most of the analyses for this proposed rule 
includes 100 percent of home health episode claims with Through Dates 
in Calendar Year (CY) 2017, processed by March 2, 2018, accessed via 
the Chronic Conditions Data Warehouse (CCW). Original or adjustment 
claims processed after March 2, 2018, would not be reflected in the 
core file. The claims-based file was supplemented with additional 
variables that were obtained from the CCW, such as information 
regarding other Part A and Part B utilization.
    The data were cleaned by processing any remaining adjustments and 
by

[[Page 32383]]

excluding duplicates and claims that were Requests for Anticipated 
Payment (RAP). In addition, visit-level variables needed for the 
analysis were extracted from the revenue center trailers (that is, the 
line items that describe the visits) and downloaded as a separate 
visit-level file, with selected episode-level variables merged onto the 
records for visits during those episodes. To account for potential data 
entry errors, the visit-level variables for visit length were top-
censored at 8 hours.\23\
---------------------------------------------------------------------------

    \23\ Less than 0.1 percent of all visits were recorded as having 
greater than 8 hours of service.
---------------------------------------------------------------------------

    A set of data cleaning exclusions were applied to the episode-level 
file, which resulted in the exclusion of the following:
    <bullet> Episodes that were RAPs.
    <bullet> Episodes with no covered visits.
    <bullet> Episodes with any missing units or visit data.
    <bullet> Episodes with zero payments.
    <bullet> Episodes with no charges.
    <bullet> Non-LUPA episodes missing an HHRG.
    The analysis file also includes data on patient characteristics 
obtained from the OASIS assessments conducted by home health agency 
(HHA) staff at the start of each episode. The assessment data are 
electronically submitted by HHAs to a central CMS repository. In 
constructing the core data file, 100 percent of the OASIS assessments 
submitted October 2016 through December 2017 from the CMS repository 
were uploaded by CMS to the CCW. A CCW-derived linking key (Bene ID) 
was used to match the OASIS data with CY 2017 episodes of care. 
Episodes that could not be linked with an OASIS assessment were 
excluded from the analysis file, as they included insufficient patient-
level data to create the PDGM.
    To construct measures of resource use, a variety of data sources 
were used (see section III.F.2 of this proposed rule for the proposed 
methodology used to calculate the cost of care under the PDGM). First, 
BLS data on average wages and fringe benefits were used to produce 
wage-weighted minutes of care (WWMC), the approach used in the current 
system to calculate the cost of care. The wage data are for North 
American Industry Classification System (NAICS) 621600--Home Health 
Care Services (see Table 29).

  Table 29--BLS Standard Occupation Classification (SOC) Codes for Home
                            Health Providers
------------------------------------------------------------------------
  Standard Occupation Code (SOC) No.            Occupation title
------------------------------------------------------------------------
29-1141...............................  Registered Nurses.
29-2061...............................  Licensed Practical and Licensed
                                         Vocational Nurses.
29-1123...............................  Physical Therapists.
31-2021...............................  Physical Therapist Assistants.
31-2022...............................  Physical Therapist Aides.
29-1122...............................  Occupational Therapists.
31-2011...............................  Occupational Therapist
                                         Assistants.
31-2012...............................  Occupational Therapist Aides.
29-1127...............................  Speech-Language Pathologists.
21-1022...............................  Medical and Public Health Social
                                         Workers.
21-1023...............................  Mental Health and Substance
                                         Abuse Social Workers.
31-1011...............................  Home Health Aides.
------------------------------------------------------------------------

    The WWMC approach determines resource use for each episode by 
multiplying utilization (in terms of the number of minutes of direct 
patient care provided by each discipline) by the corresponding 
opportunity cost of that care (represented by wage and fringe benefit 
rates from the BLS).\24\ Table 30 shows the occupational titles and 
corresponding mean hourly wage rates from the BLS. The employer cost 
per hour worked shown in the fifth column is calculated by adding 
together the mean hourly wage rates and the fringe benefit rates from 
the BLS. For home health disciplines that include multiple occupations 
(such as skilled nursing), the opportunity cost is generated by 
weighting the employer cost by the proportions of the labor mix.\25\ 
Otherwise, the opportunity cost is the same as the employer cost per 
hour.
---------------------------------------------------------------------------

    \24\ Opportunity costs represent the foregone resources from 
providing each minute of care versus using the resources for another 
purpose (the next best alternative). Generally, opportunity costs 
represent more than the monetary costs, but in these analyses, they 
are proxied using hourly wage rates.
    \25\ Labor mix represents the percentage of employees with a 
particular occupational title (as obtained from claims) within a 
home health discipline. Physical therapist aides and occupational 
therapist aides were not included in the labor mix.

                             Table 30--Occupational Employment and Wages Provided by the Federal Bureau of Labor Statistics
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Estimate of   Estimated
                                               National   Mean hourly  benefits as    employer    Labor                                     Opportunity
              Occupation title                employment      wage        a % of      cost per     mix        Home health discipline           cost
                                                counts                    wages     hour worked
--------------------------------------------------------------------------------------------------------------------------------------------------------
Registered Nurses..........................      179,280       $33.34        43.85       $47.96     0.66  Skilled Nursing...............          $42.42
Licensed Practical and Licensed Vocational        85,410        22.03        43.85        31.69     0.34
 Nurses.
Physical Therapists........................       24,810        47.23        40.92        66.55     0.66  Physical Therapy..............           58.55
Physical Therapist Assistants..............        7,330        31.43        35.79        42.68     0.34
Occupational Therapists....................       10,760        45.27        40.92        63.79     0.79  Occupational Therapy..........           59.97
Occupational Therapist Assistants..........        2,270        33.83        35.79        45.94     0.21
Speech-Language Pathologists...............        5,360        47.08        40.92        66.34  .......  Speech Therapy................           66.34
Medical and Public Health Social Workers...       18,930        28.76        40.92        40.53     0.97  Medical Social Service........           40.42
Mental Health and Substance Abuse Social             500        25.85        40.92        36.43     0.03
 Workers.
Home Health Aides..........................      408,920        11.25        35.79        15.28  .......  Home Health Aide..............           15.28
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: May 2016 National Industry-Specific Occupational Employment and Wage Estimates--NAICS 621600--Home Health Care Services.


[[Page 32384]]

    Home Health Agency Medicare Cost Report (MCR) data for FY 2016 were 
also used to construct a measure of resource use after trimming out 
HHAs whose costs were outliers (see section III.F.2 of this proposed 
rule). These data are used to provide a representation of the average 
costs of visits provided by HHAs in the six Medicare home health 
disciplines: Skilled nursing; physical therapy; occupational therapy; 
speech-language pathology; medical social services; and home health 
aide services. Cost report data are publicly available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Cost-Reports/. More details regarding how HHA MCR data were 
used in constructing the CPM+NRS measure of resource use can be found 
in section III.F.2 of this proposed rule.
    A comment submitted in response to the CY 2018 HH PPS proposed rule 
questioned the trimming process for the Medicare cost report data used 
to calculate the cost-per-minute plus non-routine supplies (CPM+NRS) 
methodology used to estimate resource use (outlined in section III.F.2 
of this rule). The commenter stated that for rebasing, CMS audited 100 
cost reports and the findings of such audits found that costs were 
overstated by 8 percent and that finding was attributed to the entire 
population of HHA Medicare cost reports. The commenter questioned if 
CMS applied the 8 percent ``adjustment factor'' in last year's proposed 
rule, requested CMS provide the number of cost reports used for the 
proposed rule, asked if only cost reports of freestanding HHAs were 
used, and requested that CMS describe what percentage of cost reports 
did not list any costs for NRS, yet listed NRS charges.
    For the calculations in the CY 2018 HH PPS proposed rule, CMS 
applied the trimming methodology described in detail in the ``Analyses 
in Support of Rebasing & Updating Medicare Home Health Payment Rates'' 
Report available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/Analyses-in-Support-of-Rebasing-and-Updating-the-Medicare-Home-Health-Payment-Rates-Technical-Report.pdf. This is also the trimming methodology outlined in the CY 
2014 HH PPS proposed rule (78 FR 40284). Of note, for each discipline 
and for NRS, we also followed the methodology laid out in the 
``Rebasing Report'' by trimming out values that fell in the top or 
bottom 1 percent of the distribution across all HHAs. This included the 
cost-per-visit values for each discipline and NRS cost-to-charge ratios 
that fell in the top or bottom 1 percent of the distribution across all 
HHAs. For this proposed rule, we applied the same trimming methodology.
    We included both freestanding and facility-based HHA Medicare cost 
report data in our rebasing calculations as outlined in the CY 2014 HH 
PPS proposed and final rules and in our analysis of FY 2015 HHA 
Medicare cost report data for the CY 2018 HH PPS proposed rule. We 
similarly included both freestanding and facility-based HHA Medicare 
cost report data in our analysis of FY 2016 cost report data for this 
proposed rule. We note that although we found an 8 percent 
overstatement of costs from the Medicare cost reports audits performed 
to support the rebasing adjustments, we did not apply an 8 percent 
adjustment to HHA costs in the CY 2014 HH PPS proposed or final rules. 
We also did not apply an 8 percent adjustment to the costs in the CY 
2018 HH PPS proposed rule or in this proposed rule. The 8 percent 
overstatement was determined using a small sample size of HHA Medicare 
cost reports and the CY 2014 HH PPS proposed rule included this 
information as illustrative only. The information was not used in any 
cost calculations past or present.
    Before trimming, there were 10,394 cost reports for FY 2016. In 
this proposed rule, we used 7,458 cost reports. Of the 7,458 cost 
reports, 5,447 (73.4 percent) had both NRS charges and costs, 1,672 
(22.4 percent) had neither NRS charges or costs, and 339 (4.5 percent) 
had NRS charges but no NRS costs. There were no cost reports with NRS 
costs, but no NRS charges.
    The initial 2017 analytic file included 6,771,059 episodes. Of 
these, 959,410 (14.2 percent) were excluded because they could not be 
linked to OASIS assessments or because of the claims data cleaning 
process reasons listed above. This yielded a final analytic file that 
included 5,811,649 episodes. Those episodes are 60-day episodes under 
the current payment system, but for the PDGM those 60-day episodes were 
converted into two 30-day periods. This yielded a final PDGM analytic 
file that included 10,160,226, 30-day periods. Certain 30-day periods 
were excluded for the following reasons:
    <bullet> Inability to merge to certain OASIS items to create the 
episode's functional level that is used for risk adjustment. For all 
the periods in the analytic file, there was a look-back through CY 2016 
for a period with a Start of Care or Resumption of Care assessment that 
preceded the period being analyzed and was in the same sequence of 
periods. If such an assessment was found, it was used to impute 
responses for OASIS items that were not included in the follow-up 
assessment. Periods that were linked to a follow-up assessment which 
did not link to a Start of Care or Resumption of Care assessment using 
the process described above were dropped (after exclusions, n = 
9,471,529).
    <bullet> No nursing visits or therapy visits (after exclusions, n = 
9,287,622).
    <bullet> LUPAs were excluded from the analysis. Periods that are 
identified as LUPAs in the current payment system were excluded in the 
creation of the functional score. Following the creation of the score 
(and the corresponding levels), case-mix group specific LUPA thresholds 
were created and episodes/periods were excluded that were below the new 
LUPA threshold when computing the case-mix weights.\26\ Therefore, the 
final analytic sample included 8,624,776 30-day periods that were used 
for the analyses in the PDGM.
---------------------------------------------------------------------------

    \26\ The case-mix group specific LUPA thresholds were determined 
using episodes that were considered LUPAs under the current payment 
system.
---------------------------------------------------------------------------

    In response to the CY 2018 HH PPS proposed rule, we received many 
comments stating there was limited involvement with the industry in the 
development of the alternative case-mix adjustment methodology. 
Commenters also stated that they were unable to obtain the necessary 
data in order to replicate and model the effects on their business. We 
note that, through notice and comment rulemaking and other processes, 
stakeholders always have the opportunity to reach out to CMS and 
provide suggestions for improvement in the payment methodology under 
the HH PPS. In the CY 2014 HH PPS final rule, we noted that we were 
continuing to work on improvements to our case-mix adjustment 
methodology and welcomed suggestions for improving the case-mix 
adjustment methodology as we continued in our case-mix research (78 FR 
72287). The analyses and the ultimate development of an alternative 
case-mix adjustment methodology was shared with stakeholders via 
technical expert panels, clinical workgroups, and special open door 
forums. We also provided high-level summaries on our case-mix 
methodology refinement work in the HH PPS proposed rules for CYs 2016 
and 2017 (80 FR 39839, and 81 FR 76702). A detailed technical report 
was posted on the CMS website in December of 2016, additional technical 
expert panel and clinical workgroup webinars were held after the 
posting of the technical report, and a National Provider call occurred 
in January 2017

[[Page 32385]]

to further solicit feedback from stakeholders and the general 
public.\27\ \28\ As noted above, the CY 2018 HH PPS proposed rule 
further solicited comments on an alternative case-mix adjustment 
methodology. Ultimately the proposed alternative case-mix adjustment 
methodology, including a proposed change in the unit of payment from 60 
days to 30 days, was not finalized in the CY 2018 HH PPS final rule in 
order to allow CMS additional time to consider public comments for 
potential refinements to the model (82 FR 51676).
---------------------------------------------------------------------------

    \27\ Abt Associates. ``Overview of the Home Health Groupings 
Model.'' Medicare Home Health Prospective Payment System: Case-Mix 
Methodology Refinements. Cambridge, MA, November 18, 2016. Available 
at https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
    \28\ Centers for Medicare & Medicaid Services (CMS). 
``Certifying Patients for the Medicare Home Health Benefit.'' MLN 
Connects<SUP>TM</SUP> National Provider Call. Baltimore, MD, 
December 16, 2016. Slides, examples, audio recording and transcript 
available at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/National-Provider-Calls-and-Events-Items/2017-01-18-Home-Health.html?DLPage=2&DLEntries=10&DLSort=0&DLSortDir=descending.
---------------------------------------------------------------------------

    On February 1, 2018, CMS convened another TEP, to gather 
perspectives and identify and prioritize recommendations from industry 
leaders, clinicians, patient representatives, and researchers with 
experience with home health care and/or experience in home health 
agency management regarding the case-mix adjustment methodology 
refinements described in the CY 2018 HH PPS proposed rule (82 FR 
35270), and alternative case-mix models submitted during 2017 as 
comments to the CY 2018 HH PPS proposed rule. During the TEP, there was 
a description and solicitation of feedback on the components of the 
proposed case-mix methodology refinement, such as resource use, 30-day 
periods, clinical groups, functional levels, comorbidity groups, and 
other variables used to group periods into respective case-mix groups. 
Also discussed were the comments received from the CY 2018 HH PPS 
proposed rule, the creation of case-mix weights, and an open discussion 
to solicit feedback and recommendations for next steps. This TEP 
satisfied the requirement set forth in section 51001(b)(1) of the BBA 
of 2018, which requires that at least one session of such a TEP be held 
between January 1, 2018 and December 31, 2018. Lastly, section 
51001(b)(3) of the BBA of 2018 requires the Secretary to issue a report 
to the Committee on Ways and Means and Committee on Energy and Commerce 
of the House of Representatives and the Committee on Finance of the 
Senate on the recommendations from the TEP members, no later than April 
1, 2019. This report is available on the CMS HHA Center web page at: 
https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html and satisfies the requirement of section 51001(b)(3) of the 
BBA of 2018.
    Finally, with respect to comments regarding the availability of 
data to replicate and model the effects of the PDGM on HHAs, we note 
that generally the data needed to replicate and model the effects of 
the proposed PDGM are available by request through the CMS Data Request 
Center.\29\ Although claims data for home health are available on a 
quarterly and annual basis as Limited Data Set (LDS) files and Research 
Identifiable Files (RIFs); we note that assessment data (OASIS) are not 
available as LDS files through the CMS Data Request Center. While CMS 
is able to provide LDS files in a more expedited manner, it may take 
several months for CMS to provide RIFs. Therefore, we will provide upon 
request a Home Health Claims-OASIS LDS file to accompany the CY 2019 HH 
PPS proposed and final rules. We believe that in making a Home Health 
Claims-OASIS LDS file available upon request in conjunction with the CY 
2019 HH PPS proposed and final rules, this would address concerns from 
stakeholders regarding data access and transparency in annual 
ratesetting.
---------------------------------------------------------------------------

    \29\ https://www.resdac.org/cms-data/request/cms-data-request-center.
---------------------------------------------------------------------------

    The Home Health Claims-OASIS LDS file can be requested by following 
the instructions on the following CMS website: https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/Data-Disclosures-Data-Agreements/DUA_-_NewLDS.html and a file layout will be available. 
This file will contain information from claims data matched with 
assessment data for CY 2017, both obtained from the Chronic Conditions 
Data Warehouse (CCW), and each observation in the file will represent a 
30-day period of care with variables created that provide information 
corresponding to both the 30-day period of care and the 60-day episode 
of care. The file will also contain variables that show the case-mix 
group that a particular claim would be grouped into under both the new 
PDGM case-mix methodology and the current case-mix adjustment 
methodology as well as variables for all the assessment items used for 
grouping the claim into its appropriate case-mix group under the PDGM 
and variables used for calculating resource use. Because this Home 
Health Claims-OASIS LDS file includes variables used for calculating 
resource use, this file will also include publically available data 
from home health cost reports and the BLS. Some of the cost data in 
this file is trimmed and imputed before being used as outlined above. 
We note that much of the content of the Home Health Claims-OASIS LDS 
file will be derived from CMS data sources. That is, many elements of 
claims or elements of OASIS will not be copied to the LDS file as is. 
For example, we will have variables in the data files that will record 
the aggregated number of visits and minutes of service by discipline 
type. We will need to create those aggregates from the line item data 
available on the claims data. Because we will be taking data from 
different sources (claims, OASIS, and cost reports/BLS), we will match 
the data across those sources. Information from claims and costs 
reports will be linked using the CCN. OASIS assessment data will be 
linked to those sources using information available both on the claim 
and OASIS. As noted earlier in this section, any episodes that could 
not be linked with an OASIS assessment were excluded from the analysis 
file, as they included insufficient patient-level data to re-group such 
episodes into one of the 216 case-mix groups under the PDGM.
    In addition, similar to the CY 2018 HH PPS proposed rule, we will 
again provide a PDGM Grouper Tool in conjunction with this proposed 
rule on CMS' HHA Center web page to allow HHAs to replicate the PDGM 
methodology using their own internal data.\30\ In addition, in 
conjunction with this proposed rule, we will post a file on the HHA 
Center web page that contains estimated Home Health Agency-level 
impacts as a result of the proposed PDGM.
---------------------------------------------------------------------------

    \30\ https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html.
---------------------------------------------------------------------------

2. Methodology Used To Calculate the Cost of Care
    To construct the case-mix weights for the PDGM proposal, the costs 
of providing care needed to be determined. A Wage-Weighted Minutes of 
Care (WWMC) approach is used in the current payment system based on 
data from the BLS. However, we are proposing to adopt a Cost-per-Minute 
plus Non-Routine Supplies (CPM + NRS) approach, which uses information 
from HHA Medicare Cost Reports and Home Health Claims.
    <bullet> Home Health Medicare Cost Report Data: All Medicare-
certified HHAs must report their own costs through publicly-

[[Page 32386]]

available home health cost reports maintained by the Healthcare Cost 
Report Information System (HCRIS). Freestanding HHAs report using a 
HHA-specific cost report while HHAs that are hospital-based report 
using the HHA component of the hospital cost reports. These cost 
reports enable estimation of the cost per visit by provider and the 
estimated NRS cost to charge ratios. To obtain a more robust estimate 
of cost, a trimming process was applied to remove cost reports with 
missing or questionable data and extreme values.\31\
---------------------------------------------------------------------------

    \31\ The trimming methodology is described in the report 
``Analyses in Support of Rebasing & Updating Medicare Home Health 
Payment Rates'' (Morefield, Christian, and Goldberg 2013). See 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/Analyses-in-Support-of-Rebasing-and-Updating-the-Medicare-Home-Health-Payment-Rates-Technical-Report.pdf.
---------------------------------------------------------------------------

    <bullet> Home Health Claims Data: Medicare home health claims data 
are used in both the previous WWMC approach and in the CPM+NRS method 
to obtain minutes of care by discipline of care.
    Under the proposed PDGM, we group 30-day periods of care into their 
case-mix groups taking into account admission source, timing, clinical 
group, functional level, and comorbidity adjustment. From there, the 
average resource use for each case-mix group dictates the group's case-
mix weight. We propose that resource use be estimated with the cost of 
visits recorded on the home health claim plus the cost of NRS recorded 
on the claims. The cost of NRS is generated by taking NRS charges on 
claims and converting them to costs using a NRS cost to charge ratio 
that is specific to each HHA. NRS costs are then added to the resource 
use estimates. That overall resource use estimate is then used to 
establish the case-mix weights. Similar to the current system, NRS 
would still be paid prospectively under the PDGM, but the PDGM 
eliminates the separate case-mix adjustment model for NRS.
    Under the proposed alternative case-mix methodology discussed in 
the CY 2018 HH PPS proposed rule, we proposed to calculate resource use 
using the CPM+NRS approach (82 FR 35270). In response to the CY 2018 HH 
PPS proposed rule, several commenters expressed support for the 
proposed change to the CPM+NRS methodology used to measure resource 
use, noting that such an approach incorporates a wider variety of costs 
(such as transportation) compared to the current WWMC approach. 
Alternatively, other commenters responding to last year's proposed rule 
objected to using Medicare cost report data rather than Wage-Weighted 
Minutes of Care (WWMC) to calculate resource use. The commenters 
indicated that the strength and utility of period-specific cost depends 
on the accuracy and consistency of agencies' reported charges, cost-to-
charge ratios, and period minutes and indicated that they believe there 
are no incentives for ensuring the accuracy of HHA cost reports, which 
they believe may result in erroneous data. Several commenters also 
indicated that the use of cost report data in lieu of WWMC favors 
facility-based agencies because they believe that facility-based 
agencies have the ability to allocate indirect overhead costs from 
their parent facilities to their service cost and argued that the 
proposed alternative case-mix methodology would reward inefficient HHAs 
with historically high costs. A few commenters stated that Non-Routine 
Supplies (NRS) should not be incorporated into the base rate and then 
wage-index adjusted (as would be the case if CMS were to use the 
CPM+NRS approach to estimate resource use). The commenters stated that 
HHAs' supply costs are approximately the same nationally, regardless of 
rural or urban locations and regardless of the wage-index, and 
including NRS in the base rate will penalize rural providers and 
unnecessarily overpay for NRS in high wage-index areas. We note that in 
accordance with the requirement of section 51001 of the BBA of 2018, a 
Technical Expert Panel (TEP) convened in February 2018 to solicit 
feedback and identify and prioritize recommendations from a wide 
variety of industry experts and patient representatives regarding the 
public comments received on the proposed alternative case-mix 
adjustment methodology. We received similar comments on the approach to 
calculating resource use using the CPM+NRS approach, versus the WWMC 
approach, bothin response to the CY 2018 HH PPS proposed rule and those 
provided by the TEP participants.
    We believe that using HHA Medicare cost report data, through the 
CPM+NRS approach, to calculate the costs of providing care better 
reflects changes in utilization, provider payments, and supply amongst 
Medicare-certified HHAs. Using the BLS average hourly wage rates for 
the entire home health care service industry does not reflect changes 
in Medicare home health utilization that impact costs, such as the 
allocation of overhead costs when Medicare home health visit patterns 
change. Utilizing data from HHA Medicare cost reports better represents 
the total costs incurred during a 30-day period (including, but not 
limited to, direct patient care contract labor, overhead, and 
transportation costs), while the WWMC method provides an estimate of 
only the labor costs (wage and fringe benefit costs) related to direct 
patient care from patient visits that are incurred during a 30-day 
period. With regards to accuracy, we note that each HHA Medicare cost 
report is required to be certified by the Officer or Director of the 
home health agency as being true, correct, and complete with potential 
penalties should any information in the cost report be a 
misrepresentation or falsification of information.
    As noted above, and in the CY 2018 HH PPS proposed rule, we applied 
the trimming methodology described in detail in the ``Analyses in 
Support of Rebasing & Updating Medicare Home Health Payment Rates'' 
Report. This is also the trimming methodology outlined in the CY 2014 
HH PPS proposed rule (78 FR 40284) in determining the rebased national, 
standardized 60-day episode payment amount. For each discipline and for 
NRS used in calculating resource use using the CPM+NRS approach, we 
also followed the methodology laid out in the ``Rebasing Report'' by 
trimming out values that fall in the top or bottom 1 percent of the 
distribution across all HHAs. This included the cost per visit values 
for each discipline and NRS cost-to-charge ratios that fall in the top 
or bottom 1 percent of the distribution across all HHAs. Normalizing 
data by trimming out missing or extreme values is a widely accepted 
methodology both within CMS and amongst the health research community 
and provides a more robust measure of average costs per visit that is 
reliable for the purposes of establishing base payment amounts and 
case-mix weights under the HH PPS. Using HHA Medicare cost report data 
to establish the case-mix weight aligns with the use of this data in 
determining the national, standardized 60-day episode payment amount 
under the HH PPS.
    In response to commenters' concerns regarding the allocation of 
overhead costs by facility-based HHAs, we note that a single HHA's 
costs impact only a portion of the calculation of the weights and costs 
are blended together across all HHAs. The payment regression was 
estimated using 8,624,776 30-day periods from 10,480 providers. On 
average, each provider contributed 823 30-day periods to the payment 
regression, which is only 0.010 percent of all 30-day periods. 
Therefore, including or excluding any single HHA, on average, would not 
dramatically

[[Page 32387]]

impact the results of the payment regression. Further, facility-based 
HHAs are only 8 percent of HHAs whereas 92 percent of HHAs are 
freestanding, and coincidentally the percentage of 30-day periods 
furnished by facility-based versus freestanding HHAs is also 8 and 92 
percent, respectively. Additionally, in the PDGM, we estimate the 
payment regression using provider-level fixed effects; therefore we are 
looking at the within provider variation in resource use.
    In the CY 2008 HH PPS final rule, CMS noted that use of non-routine 
medical supplies is unevenly distributed across episodes of care in 
home health. In addition, the majority of episodes do not incur any NRS 
costs and, at that time, the current payment system overcompensated for 
episodes with no NRS costs. In the CY 2008 HH PPS proposed rule, we 
stated that patients with certain conditions, many of them related to 
skin conditions, were more likely to require high non-routine medical 
supply utilization (72 FR 49850), and that we would continue to look 
for ways to improve our approach to account for NRS costs and payments 
in the future (72 FR 25428). We believe that the proposed PDGM offers 
an alternative method for accounting for NRS costs and payments by 
grouping patients more likely to require high NRS utilization. For 
example, while the Wound group and Complex Nursing Interventions groups 
comprise about 9 percent and 4 percent of all 30-day periods of care, 
respectively; roughly 27 percent of periods where NRS was supplied were 
assigned to the Wound and Complex Nursing Interventions groups and 44 
percent of NRS costs fall into the Wound and Complex Nursing groups. We 
note that CY 2017 claims data indicates that about 60 percent of 60-day 
episodes did not provide any NRS.
    In using the CPM + NRS approach to calculate the cost of proving 
care (resource use), NRS costs are reflected in the average resource 
use that drives the case-mix weights. If there is a high amount of NRS 
cost for all periods in a particular group (holding all else equal), 
the resource use for those periods will be higher relative to the 
overall average and the case-mix weight will correspondingly be higher. 
Similar to the current system, NRS would still be paid prospectively 
under the PDGM, but the PDGM eliminates the separate case-mix 
adjustment model for NRS. Incorporating the NRS cost into the measure 
of overall resource use (that is, the dependent variable of the payment 
model) requires adjusting the NRS charges submitted on claims based on 
the NRS cost-to-charge ratio from cost report data.
    The following steps would be used to generate the measure of 
resource use under this CPM + NRS approach:
    (1) From the cost reports, obtain total costs for each of the six 
home health disciplines for each HHA.
    (2) From the cost reports, obtain the number of visits by each of 
the six home health disciplines for each HHA.
    (3) Calculate discipline-specific cost per visit values by dividing 
total costs [1] by number of visits [2] for each discipline for each 
HHA. For HHAs that did not have a cost report available (or a cost 
report that was trimmed from the sample), imputed values were used as 
follows:
    <bullet> A state-level mean was used if the HHA was not hospital-
based. The state-level mean was computed using all non-hospital based 
HHAs in each state.
    <bullet> An urban nationwide mean was used for all hospital-based 
HHAs located in a Core-based Statistical Area (CBSA). The urban nation-
wide mean was computed using all hospital-based HHAs located in any 
CBSA.
    <bullet> A rural nationwide mean was used for all hospital-based 
HHAs not in a CBSA. The rural nation-wide mean was computed using all 
hospital-based HHAs not in a CBSA.
    (4) From the home health claims data, obtain the average number of 
minutes of care provided by each discipline across all episodes for a 
HHA.
    (5) From the home health claims data, obtain the average number of 
visits provided by each discipline across all episodes for each HHA.
    (6) Calculate a ratio of average visits to average minutes by 
discipline by dividing average visits provided [5] by average minutes 
of care [4] by discipline for each HHA.
    (7) Calculate costs per minute by multiplying the HHA's cost per 
visit [3] by the ratio of average visits to average minutes [6] by 
discipline for each HHA.
    (8) Obtain 30-day period costs by multiplying costs per minute [7] 
by the total number of minutes of care provided during a 30-day period 
by discipline. Then, sum these costs across the disciplines for each 
period.
    This approach accounts for variation in the length of a visit by 
discipline. NRS costs are added to the resource use calculated in [8] 
in the following way:
    (9) From the cost reports, determine the NRS cost-to-charge ratio 
for each HHA. The NRS ratio is trimmed if the value falls in the top or 
bottom 1 percent of the distribution across all HHAs from the trimmed 
sample. Imputation for missing or trimmed values is done in the same 
manner as it was done for cost per visit (see [3] above).
    (10) From the home health claims data, obtain NRS charges for each 
period.
    (11) Obtain NRS costs for each period by multiplying charges from 
the home health claims data [10] by the cost-to-charge ratio from the 
cost reports [9] for each HHA.
    Resource use is then obtained by:
    (12) Summing costs from [8] with NRS costs from [11] for each 30-
day period.
    Table 31 shows these costs for 30-day periods in CY 2017 (n = 
8,624,776). On average, total 30-day period costs as measured by 
resource use are $1,570.68. The distribution ranges from a 5th 
percentile value of $296.66 to a 95th percentile value of $3,839.91.

                                                             Table 31--Distribution of Average Resource Use Using CPM + NRS Approach
                                                                                        [30 Day periods]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     5th          10th          25th          50th          75th          90th          95th
                            Statistics                                  Mean            N        Percentile    Percentile    Percentile    Percentile    Percentile    Percentile    Percentile
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average Resource Use (CPM + NRS)..................................    $1,570.68     8,624,776       $296.66       $394.31       $679.12     $1,272.18     $2,117.47     $3,107.93     $3,839.91
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    The distributions and magnitude of the estimates of costs for the 
CPM + NRS method versus the WWMC method are very different. The 
differences arise because the CPM + NRS method incorporates HHA-
specific costs that represent the total costs incurred during a 30-day 
period (including overhead costs), while the WWMC method provides an 
estimate of only the labor costs (wage + fringe) related to direct 
patient care from patient visits that are incurred during a 30-day 
period. Those costs are not HHA-specific and do not account for any 
non-labor costs (such as

[[Page 32388]]

transportation costs) or the non-direct patient care labor costs (such 
as, administration and general labor costs). Because the costs 
estimated using the two approaches are measuring different items, they 
cannot be directly compared. However, if the total cost of a 30-day 
period is correlated with the labor that is provided during visits, the 
two approaches should be highly correlated. The correlation coefficient 
(estimated by comparing a 30-day period's CPM + NRS resource use to the 
same period's WWMC resource use) between the two approaches to 
calculating resource use is equal to 0.8512 (n = 8,624,776). Therefore, 
the relationship in relative costs is similar between the two methods.
    Using cost report data to develop case-mix weights more evenly 
weights skilled nursing services and therapy services than the BLS 
data. Table 32 shows the ratios between the estimated costs per hour 
for each of the home health disciplines compared with skilled nursing 
resulting from the CPM + NRS versus WWMC methods. Under the CPM + NRS 
methodology, the ratio for physical therapy costs per hour to skilled 
nursing is 1.14 compared with 1.36 using the WWMC method.

                                                Table 32--Relative Values in Costs per Hour by Discipline
                                                                [Skilled nursing is base]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Skilled        Physical      Occupational                   Medical social    Home health
                 Estimated cost per hour                      nursing         therapy         therapy     Speech therapy      service          aide
--------------------------------------------------------------------------------------------------------------------------------------------------------
CPM + NRS...............................................            1.00            1.14            1.15            1.25            1.39            0.40
WWMC....................................................            1.00            1.36            1.38            1.56            0.94            0.35
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In response to the CY 2018 HH PPS proposed rule (82 FR 35270), a 
few commenters, stated that based on their operational experiences with 
clinical staffing labor costs, HHA cost report data suggests more 
parity exists between skilled nursing (``SN'') versus physical 
therapist (``PT'') costs than in fact exists. Commenters stated that 
BLS data showing a 40 percent difference between SN and PT costs are 
more reflective of the human resources experiences in the markets where 
they operate. As such, commenters believe the use of cost report data 
would cause the proposed alternative case-mix methodology to overpay 
for nursing services and underpay for therapy services, although it was 
not clear from the comments why the relative relationship in cost 
between disciplines would necessarily mean that nursing would be 
overpaid or underpaid relative to therapy.
    We note that the HHA Medicare cost report data reflects all labor 
costs, including contract labor costs. The BLS data only reflects 
employed staff. This may partially explain why a 40 percent variation 
between SN and PT costs is not evident in the cost report data. 
However, the comparison is somewhat inappropriate because the BLS data 
only reflects labor costs whereas the HHA Medicare cost report data 
includes labor and non-labor costs. As noted earlier in Table 32, there 
is only a 14 percent variation using the CPM + NRS methodology. 
Moreover, in aggregate, about 15 percent of compensation costs are 
contract labor costs and this varies among the disciplines with 
contract labor costs accounting for a much higher proportion of therapy 
visit costs compared to skilled nursing visit costs. Utilization also 
varies among freestanding providers with smaller providers having a 
higher proportion of contract labor costs, particularly for therapy 
services compared to larger providers. The decision of whether to/or 
what proportion of contract labor to use is at the provider's 
discretion. Finally, we note that in order to be eligible for Medicare 
HH PPS payments, providers must complete the HHA Medicare cost report 
and certify the report by the Officer or Director of the home health 
agency as being true, correct, and complete; therefore, such data can 
and should be used to calculate the cost of care.
    We have determined that using cost report data to calculate the 
cost of home health care better aligns the case-mix weights with the 
total relative cost for treating various patients. In addition, using 
cost report data allows us to incorporate NRS into the case-mix system, 
rather than maintaining a separate payment system. Therefore, we are 
re-proposing to calculate the cost of a 30-day period of home health 
care under the proposed PDGM using the cost per minute plus non-routine 
supplies (CPM + NRS) approach outlined above, as also outlined in the 
CY 2018 proposed rule. We invite comments on the proposed methodology 
for calculating the cost of a 30-day period of care under the PDGM.
3. Change From a 60-Day to a 30-Day Unit of Payment
a. Background
    Currently, HHAs are paid for each 60-day episode of home health 
care provided. In the CY 2018 HH PPS proposed rule, CMS proposed a 
change from making payment based on 60-day episodes to making payment 
based on 30-day periods, effective for January 1, 2019. Examination of 
the resources used within a 60-day episode of care identified 
differences in resources used between the first 30-day period within a 
60-day episode and the second 30-day period within a 60-day episode. 
Episodes have more visits, on average, during the first 30 days 
compared to the last 30 days and costs are much higher earlier in the 
episode and lesser later on; therefore, dividing a single 60-day 
episode into two 30-day periods more accurately apportioned payments. 
In addition, with the proposed removal of therapy thresholds from the 
case-mix adjustment methodology under the HH PPS, a shorter period of 
care reduced the variation and improved the accuracy of the case-mix 
weights generated under the PDGM. CMS did not finalize the 
implementation of a 30-day unit of payment in the CY 2018 HH PPS final 
rule (82 FR 51676).
    Section 1895(b)(2)(B) of the Act, as added by section 51001(a)(1) 
of the BBA of 2018, requires the Secretary to apply a 30-day unit of 
service for purposes of implementing the HH PPS, effective January 1, 
2020. We note that we interpret the term ``unit of service'' to be 
synonymous with ``unit of payment'' and will henceforth refer to ``unit 
of payment'' in this proposed rule with regards to payment under the HH 
PPS. We propose to make HH payments based on a 30-day unit of payment 
effective January 1, 2020. While we are proposing to change to a 30-day 
unit of payment, we note that the comprehensive assessment would still 
be completed within 5 days of the start of care date and completed no 
less frequently than during the last 5 days of every 60 days beginning 
with the start of care date, as currently required by Sec.  484.55, 
Condition of participation: Comprehensive assessment of patients.

[[Page 32389]]

In addition, the plan of care would still be reviewed and revised by 
the HHA and the physician responsible for the home health plan of care 
no less frequently than once every 60 days, beginning with the start of 
care date, as currently required by Sec.  484.60(c), Condition of 
participation: Care planning, coordination of services, and quality of 
care.
b. 30-Day Unit of Payment
    Under section 1895(b)(3)(A)(iv) of the Act, we are required to 
calculate a 30-day payment amount for CY 2020 in a budget neutral 
manner such that estimated aggregate expenditures under the HH PPS 
during CY 2020 are equal to the estimated aggregate expenditures that 
otherwise would have been made under the HH PPS during CY 2020 in the 
absence of the change to a 30-day unit of payment. Furthermore, as also 
required by section 1895(b)(3)(A)(iv) of the Act, to calculate a 30-day 
payment amount in a budget-neutral manner, we are required to make 
assumptions about behavior changes that could occur as a result of the 
implementation of the 30-day unit of payment. In addition, in 
calculating a 30-day payment amount in a budget-neutral manner, we must 
take into account behavior changes that could occur as a result of the 
case-mix adjustment factors that are implemented in CY 2020. We are 
also required to calculate a budget-neutral 30-day payment amount 
before the provisions of section 1895(b)(3)(B) of the Act are applied, 
that is, the home health applicable percentage increase, the adjustment 
for case-mix changes, the adjustment if quality data is not reported, 
and the productivity adjustment.
    In calculating the budget-neutral 30-day payment amount, we propose 
to make three assumptions about behavior change that could occur in CY 
2020 as a result of the implementation of the 30-day unit of payment 
and the implementation of the PDGM case-mix adjustment methodology 
outlined in this proposed rule:
    <bullet> Clinical Group Coding: A key component of determining 
payment under the PDGM is the 30-day period's clinical group 
assignment, which is based on the principal diagnosis code for the 
patient as reported by the HHA on the home health claim. Therefore, we 
assume that HHAs will change their documentation and coding practices 
and would put the highest paying diagnosis code as the principal 
diagnosis code in order to have a 30-day period be placed into a 
higher-paying clinical group. While we do not support or condone coding 
practices or the provision of services solely to maximize payment, we 
often take into account expected behavioral effects of policy changes 
related to the implementation of the proposed rule.
    <bullet> Comorbidity Coding: The PDGM further adjusts payments 
based on patients' secondary diagnoses as reported by the HHA on the 
home health claim. While the OASIS only allows HHAs to designate 1 
primary diagnosis and 5 secondary diagnoses, the home health claim 
allows HHAs to designate 1 principal diagnosis and 24 secondary 
diagnoses. Therefore, we assume that by taking into account additional 
ICD-10-CM diagnosis codes listed on the home health claim (beyond the 6 
allowed on the OASIS), more 30-day periods of care will receive a 
comorbidity adjustment than periods otherwise would have received if we 
only used the OASIS diagnosis codes for payment. The comorbidity 
adjustment in the PDGM can increase payment by up to 20 percent.
    <bullet> LUPA Threshold: Rather than being paid the per-visit 
amounts for a 30-day period of care subject to the low-utilization 
payment adjustment (LUPA) under the proposed PDGM, we assume that for 
one-third of LUPAs that are 1 to 2 visits away from the LUPA threshold 
HHAs will provide 1 to 2 extra visits to receive a full 30-day 
payment.\32\ LUPAs are paid when there are a low number of visits 
furnished in a 30-day period of care. Under the PDGM, the LUPA 
threshold ranges from 2-6 visits depending on the case-mix group 
assignment for a particular period of care (see section F.9 of this 
proposed rule for the LUPA thresholds that correspond to the 216 case-
mix groups under the PDGM).
---------------------------------------------------------------------------

    \32\ Current data suggest that what would be about \1/3\ of the 
LUPA episodes with visits near the LUPA threshold move up to become 
non-LUPA episodes. We assume this experience will continue under the 
PDGM, with about \1/3\ of those episodes 1 or 2 visits below the 
thresholds moving up to become non-LUPA episodes.
---------------------------------------------------------------------------

    Table 33 includes estimates of what the 30-day payment amount would 
be for CY 2019 (using CY 2017 home health utilization data) in order to 
achieve budget neutrality both with and without behavioral assumptions 
and including the application of the proposed home health payment 
update percentage of 2.1 percent outlined in section C.2 of this 
proposed rule. We note that these are only estimates to illustrate the 
30-day payment amount if we had proposed to implement the 30-day unit 
of payment and the proposed PDGM for CY 2019. However, because we are 
proposing to implement the 30-day unit of payment and proposed PDGM for 
CY 2020, we would propose the actual 30-day payment amount in the CY 
2020 HH PPS proposed rule calculated using CY 2018 home health 
utilization data, and we would calculate this amount before application 
of the proposed home health update percentage required for CY 2020 (as 
required by section 1895(b)(3)(iv) of the Act). In order to calculate 
the budget neutral 30-day payment amounts in this proposed rule, both 
with and without behavioral assumptions, we first calculated the total, 
aggregate amount of expenditures that would occur under the current 
case-mix adjustment methodology (as described in section III.B. of this 
rule) and the 60-day episode unit of payment using the proposed CY 2019 
payment parameters (e.g., proposed 2019 payment rates, proposed 2019 
case-mix weights, and outlier fixed-dollar loss ratio). That resulted 
in a total aggregate expenditures target amount of $16.1 billion.\33\ 
We then calculated what the 30-day payment amount would need to be set 
at in CY 2019, with and without behavior assumptions, while taking into 
account needed changes to the outlier fixed-dollar loss ratio under the 
PDGM in order to pay out no more than 2.5 percent of total HH PPS 
payments as outlier payments (refer to section III.F.12 of this 
proposed rule) and in order for Medicare to pay out $16.1 billion in 
total expenditures in CY 2019 with the application of a 30-day unit of 
payment under the PDGM.
---------------------------------------------------------------------------

    \33\ The initial 2017 analytic file included 6,771,059 60-day 
episodes ($18.2 billion in total expenditures). Of these, 959,410 
(14.2 percent) were excluded because they could not be linked to 
OASIS assessments or because of the claims data cleaning process 
reasons listed in section III.F.1 of this proposed rule. We note 
that of the 959,410 claims excluded, 620,336 were excluded because 
they were RAPs without a final claim or they were claims with zero 
payment amounts, resulting in $17.4 billion in total expenditures. 
After removing all 959,410 excluded claims, the 2017 analytic file 
consisted of 5,811,649 60-day episodes ($16.4 billion in total 
expenditures). 60-day episodes of duration longer than 30 days were 
divided into two 30-day periods in order to calculate the 30-day 
payment amounts. As noted in section III.F.1 of this proposed rule, 
there were instances where 30-day periods were excluded from the 
2017 analytic file (for example, we could not match the period to a 
start of care or resumption of care OASIS to determine the 
functional level under the PDGM, the 30-day period did not have any 
skilled visits, or because information necessary to calculate 
payment was missing from claim record). The final 2017 analytic file 
used to calculate budget neutrality consisted of 9,285,210 30-day 
periods ($16.1 billion in total expenditures) drawn from 5,456,216 
60-day episodes.

[[Page 32390]]



      Table 33--Estimates of 30-Day Budget-Neutral Payment Amounts
------------------------------------------------------------------------
                                           30-day budget  Percent change
                                           neutral (BN)       from no
          Behavioral assumption              standard       behavioral
                                              amount        assumptions
------------------------------------------------------------------------
No Behavioral Assumptions...............       $1,873.91  ..............
LUPA Threshold (\1/3\ of LUPAs 1-2              1,841.05           -1.75
 visits away from threshold get extra
 visits and become case-mix adjusted)...
Clinical Group Coding (among available          1,793.69           -4.28
 diagnoses, one leading to highest
 payment clinical grouping
 classification designated as principal)
Comorbidity Coding (assigns comorbidity         1,866.76           -0.38
 level based on comorbidities appearing
 on HHA claims and not just OASIS)......
Clinical Group Coding + Comorbidity             1,786.54           -4.66
 Coding.................................
Clinical Group Coding + Comorbidity             1,753.68           -6.42
 Coding + LUPA Threshold................
------------------------------------------------------------------------

    If no behavioral assumptions were made, we estimate that the 30-day 
payment amount needed to achieve budget neutrality would be $1,873.91. 
The clinical group and comorbidity coding assumptions would result in 
the need to decrease the budget-neutral 30-day payment amount to 
$1,786.54 (a 4.66 percent decrease from $1,873.91). Adding the LUPA 
assumption would require us to further decrease that amount to 
$1,753.68 (a 6.42 percent decrease from $1,873.91).
    We note that we are also required under section 1895(b)(3)(D)(i) of 
the Act, as added by section 51001(a)(2)(B) of the BBA of 2018, to 
analyze data for CYs 2020 through 2026, after implementation of the 30-
day unit of payment and new case-mix adjustment methodology, to 
annually determine the impact of differences between assumed behavior 
changes and actual behavior changes on estimated aggregate 
expenditures. We interpret actual behavior change to encompass both 
behavior changes that were outlined above, as assumed by CMS when 
determining the budget-neutral 30-day payment amount for CY 2020, and 
other behavior changes not identified at the time the 30-day payment 
amount for CY 2020 is determined. The data from CYs 2020 through 2026 
will be available to determine whether a prospective adjustment 
(increase or decrease) is needed no earlier than in years 2022 through 
2028 rulemaking. As noted previously, under section 1895(b)(3)(D)(ii) 
of the Act, we are required to provide one or more permanent 
adjustments to the 30-day payment amount on a prospective basis, if 
needed, to offset increases or decreases in estimated aggregate 
expenditures as calculated under section 1895(b)(3)(D)(i) of the Act. 
Clause (iii) of section 1895(b)(3)(D) of the Act requires the Secretary 
to make temporary adjustments to the 30-day payment amount, on a 
prospective basis, in order to offset increases or decreases in 
estimated aggregate expenditures, as determined under clause (i) of 
such section. The temporary adjustments allow us to recover excess 
spending or give back the difference between actual and estimated 
spending (if actual is less than estimated) not addressed by permanent 
adjustments. For instance, if expenditures are estimated to be $18 
billion in CY 2020, but expenditures are actually $18.25 billion in CY 
2020, then we can reduce payments (temporarily) in the future to 
recover the $250 million.
    As noted above, section 1895(b)(3)(A)(iv) of the Act requires the 
Secretary to calculate a budget-neutral 30-day payment amount to be 
paid for home health units of service that are furnished and end during 
the 12-month period beginning January 1, 2020. For implementation 
purposes, we propose that the 30-day payment amount would be paid for 
home health services that start on or after January 1, 2020. More 
specifically, for 60-day episodes that begin on or before December 31, 
2019 and end on or after January 1, 2020 (episodes that would span the 
January 1, 2020 implementation date), payment made under the Medicare 
HH PPS would be the CY 2020 national, standardized 60-day episode 
payment amount. For home health units of service that begin on or after 
January 1, 2020, the unit of service would now be a 30-day period and 
payment made under the Medicare HH PPS would be the CY 2020 national, 
standardized prospective 30-day payment amount. For home health units 
of service that begin on or after December 2, 2020 through December 31, 
2020 and end on or after January 1, 2021, the HHA would be paid the CY 
2021 national, standardized prospective 30-day payment amount.
    We are soliciting comments on our proposals, including the proposed 
behavior change assumptions outlined above to be used in determining 
the 30-day payment amount for CY 2020 and the corresponding regulation 
text changes outlined in section III.F.13 and IX. of this proposed 
rule.
c. Split Percentage Payment Approach for a 30-Day Unit of Payment
    In the current HH PPS, there is a split percentage payment approach 
to the 60-day episode. The first bill, a Request for Anticipated 
Payment (RAP), is submitted at the beginning of the initial episode for 
60 percent of the anticipated final claim payment amount. The second, 
final bill is submitted at the end of the 60-day episode for the 
remaining 40 percent. For all subsequent episodes for beneficiaries who 
receive continuous home health care, the episodes are paid at a 50/50 
percentage payment split.
    In the CY 2018 HH PPS proposed rule (82 FR 35270), we solicited 
comments as to whether the split payment approach would still be needed 
for HHAs to maintain adequate cash flow if the unit of payment changes 
from 60-day episodes to 30-day periods of care. In addition, we 
solicited comments on ways to phase-out the split percentage payment 
approach in the future. Specifically, we solicited comments on reducing 
the percentage of the upfront payment over a period of time and if in 
the future the split percentage approach was eliminated, we solicited 
comments on the need for HHAs to submit a notice of admission (NOA) 
within 5 days of the start of care to assure being established as the 
primary HHA for the beneficiary and so that the claims processing 
system is alerted that a beneficiary is under a HH period of care to 
enforce the consolidating billing edits as required by law. Commenters 
generally expressed support for continuing the split percentage payment 
approach in the future under the proposed alternative case-mix model. 
While we solicited comments on the possibility of phasing-out the split 
percentage payment approach in the future and the need for a NOA, 
commenters did not provide suggestions for a phase-out approach, but 
stated that they did not agree with requiring a NOA given the

[[Page 32391]]

experience with such a process under the Medicare hospice benefit.
    While CMS did not finalize the implementation of a 30-day unit of 
payment in the CY 2018 HH PPS final rule (82 FR 51676), the BBA of 2018 
now requires a change to the unit of payment from a 60-day episode to a 
30-day period of care, as outlined in section F.3.b above, effective 
January 1, 2020. We continue to believe that as a result of the reduced 
timeframe for the unit of payment, that a split percentage approach to 
payment may not be needed for HHAs to maintain adequate cash flow. 
Currently, about 5 percent of requests for anticipated payment are not 
submitted until the end of a 60-day episode of care and the median 
length of days for RAP submission is 12 days from the start of the 60-
day episode. As such, we are reevaluating the necessity of RAPs for 
existing and newly-certified HHAs versus the risks they pose to the 
Medicare program.
    RAP payments can result in program integrity vulnerabilities. For 
example, a final claim was never submitted for $321 million worth of 
RAP payments between July 1, 2015 and July 31, 2016. While CMS 
typically can recoup RAP overpayments from providers that continue to 
submit final claims to the Medicare program, some fraud schemes have 
involved collecting these RAP payments, never submitting final claims, 
and closing the HHA before Medicare can take action. Below are two 
examples of HHAs that were identified for billing large amounts of RAPs 
with no final claim:
    <bullet> Provider 1 is a Home Health Agency located in Michigan. It 
was identified for submitting home health claims for beneficiaries 
located in California and Florida. Further analysis found that the HHA 
was submitting RAPs with no final claims. CMS discovered that the 
address on record for the HHA was vacant for an extended period of 
time. In addition, CMS determined that although Provider 1 had 
continued billing and receiving payments for RAP claims, it had not 
submitted a final claim in 10 months. Ultimately, the HHA submitted a 
total of $50,234,430.36 in RAP payments and received $37,204,558.80 in 
RAP payments. In addition to the large amount of money paid to the HHA, 
Medicare beneficiaries were also impacted by the HHA's billing 
behavior. For example, a Florida beneficiary who needed home health 
services was unable to receive the care required due to the RAP 
submission by this Provider.
    <bullet> Provider 2 is a Home Health Agency that is also located in 
Michigan that submitted a significant number of RAPs with no final 
claim. While the majority of these beneficiaries were located in 
Michigan, data analysis identified beneficiaries who were not likely 
homebound or qualified for home health services. CMS discovered that 
the address on record for the HHA was vacant. Provider 2 had not 
submitted any final claims in more than one year and was no longer 
billing the Medicare program. However, the HHA was paid a total of 
$5,765,261.04 in RAP payments that had no final claim.
    Given the program integrity concerns outlined above and the reduced 
timeframe for the unit of payment (30-days rather than 60-days), we are 
proposing not to allow newly-enrolled HHAs, that is HHAs certified for 
participation in Medicare effective on or after January 1, 2019, to 
receive RAP payments beginning in CY 2020. This would allow newly-
enrolled HHAs to structure their operations without becoming dependent 
on a partial, advanced payment and take advantage of receiving full 
payments for every 30-day period of care. We are proposing that HHAs, 
that are certified for participation in Medicare effective on or after 
January 1, 2019, would still be required to submit a ``no pay'' RAP at 
the beginning of care in order to establish the home health episode, as 
well as every 30-days thereafter. RAP submissions are currently 
operationally significant as the RAP establishes the HHA as the primary 
HHA for the beneficiary during that timeframe and alerts the claims 
processing system that a beneficiary is under the care of an HHA to 
enforce the consolidating billing edits required by law under section 
1842(b)(6)(F) of the Act. Without such notification, there would be an 
increase in denials of claims subject to the home health consolidated 
billing edits that are prevented when an episode/period is established 
in the common working file (CWF) by the RAP, potentially resulting in 
increases in appeals, and increases in situations where other 
providers, including other HHAs, would not have easy information on 
whether a patient was already being served by an HHA. CMS invites 
comments on whether the burden of submitting a ``no-pay'' RAP by newly-
enrolled HHAs outweighs the risks to the Medicare program and providers 
associated with not submitting them.
    We propose that existing HHAs, that is HHAs certified for 
participation in Medicare with effective dates prior to January 1, 
2019, would continue to receive RAP payments upon implementation of the 
30-day unit of payment and the proposed PDGM case-mix adjustment 
methodology in CY 2020. However, we are again soliciting comments on 
ways to phase-out the split percentage payment approach in the future 
given that CMS is required to implement a 30-day unit of payment 
beginning on January 1, 2020 as outlined above. Specifically, we are 
soliciting comments on reducing the percentage of the upfront payment 
incrementally over a period of time. If in the future the split 
percentage approach was eliminated, we are also soliciting comments on 
the need for HHAs to submit a NOA within 5 days of the start of care to 
assure being established as the primary HHA for the beneficiary during 
that timeframe and so that the claims processing system is alerted that 
a beneficiary is under a HH period of care to enforce the consolidating 
billing edits as required by law. As outlined above, there are 
significant drawbacks to both Medicare and providers of not 
establishing a NOA process upon elimination of RAPs.
    In summary, we invite comments on the change in the unit of payment 
from a 60-day episode of care to a 30-day period of care; the proposed 
calculation of the 30-day payment amount in a budget-neutral manner and 
behavior change assumptions for CY 2020; the proposed interpretation of 
the statutory language regarding actual behavior change; the proposal 
not to allow newly-enrolled HHAs (HHAs certified for participation in 
Medicare effective on or after January 1, 2019) to receive RAP payments 
upon implementation of the 30-day unit of payment in CY 2020, yet still 
require the submission of a ``no pay'' RAP at the beginning of care; 
the proposal to maintain the split percentage payment approach for 
existing HHAs and applying such policy to 30-day periods of care; and 
the associated regulations text changes outlined in section III.F.13 
and IX of this proposed rule. We are also soliciting comments on ways 
the split percentage payment approach could be phased-out and whether 
to implement a NOA process if the split percentage payment approach is 
eliminated in the future.
4. Timing Categories
    In the CY 2018 HH PPS proposed rule, we described analysis showing 
the impact of timing on home health resource use and proposed to 
classify the 30-day periods under the proposed alternative case-mix 
adjustment methodology as ``early'' or ``late'' depending on when they 
occur within a sequence of 30-day periods (82 FR 35307). Under the 
current HH PPS, the first two 60-day episodes of a sequence of adjacent 
60-day episodes are considered early, while the third 60-day

[[Page 32392]]

episode of that sequence and any subsequent episodes are considered 
late. Under the alternative case-mix adjustment methodology, we 
proposed that the first 30-day period would be classified as early and 
all subsequent 30-day periods in the sequence (second or later) would 
be classified as late. Similar to the current payment system, we 
proposed that a 30-day period could not be considered early unless 
there was a gap of more than 60 days between the end of one period and 
the start of another, or it was the first period in a sequence of 
periods in which there was no more than 60 days between the end of that 
period and the start of the next period.
    In response to the CY 2018 HH PPS proposed rule, several commenters 
were supportive of the inclusion of the timing category in the 
alternative case-mix adjustment methodology, stating that this 
differentiation would reflect that HHA costs are typically highest 
during the first 30 days of care. However, other commenters expressed 
concerns regarding timing, stating that HHAs may modify the ways in 
which they provide care, that the change would cause a decrease in 
overall payment to HHAs and an increase in hospital readmissions, and 
that the categories would not account for increased costs in the later 
periods of care. Several commenters described concerns regarding the 
potential for problematic provider behavior due to financial incentives 
as well as the potential for problems with operational aspects of the 
timing element of the alternative case-mix adjustment methodology. 
Additionally, some commenters suggested that we modify the definition 
of an ``early'' 30-day period to either the first two 30-day periods or 
the first four 30-days of care, stating that those definitions would 
more closely mirror the current payment system's definition of 
``early'' and that HHAs would otherwise experience a payment decrease 
when compared to the current 60-day episode payment amount.
    As described in detail in the CY 2018 HH PPS proposed rule, our 
proposal regarding the timing element of the alternative case-mix 
adjustment methodology was intended to refine and to better fit costs 
incurred by agencies for patients with differing characteristics and 
needs under the HH PPS (82 FR 35270). Analysis of home health data 
demonstrates that under the current payment system, when analyzed by 
30-day periods, HHAs provide more resources in the first 30-day period 
of home health (``early'') than in later periods of care. The 
differences in the average resource use during early and late home 
health episodes when divided into 30-day periods are presented in Table 
34, and shows the first 30-day periods in a home health sequence have 
significantly higher average resource use at $2,113.66 as compared with 
subsequent 30-day periods. Specifically, the later 30-day periods 
showed an average resource use of $1,311.73, a difference of more than 
$800 or a 38 percent decrease. Table 34 also shows a significant 
difference between the early and late median values of resource use. 
The median for the first 30-day period is $1,866.79, while the median 
for subsequent 30-day periods is $987.94, a difference of more than 
$878 or an approximately 47 percent decrease.

                                                        Table 34--Average Resource Use by Timing
                                                                    [30-Day periods]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Standard       25th                      75th
                                                                 Average     Frequency    Percent of   deviation    percentile     Median     percentile
                            Timing                               resource    of periods    periods    of resource  of resource    resource   of resource
                                                                   use                                    use          use          use          use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Early 30-Day Periods.........................................    $2,113.66    2,785,039         32.3    $1,236.30    $1,232.23    $1,866.79    $2,707.04
Late 30-Day Periods..........................................     1,311.73    5,839,737         67.7     1,125.44       534.82       987.94     1,735.69
                                                              ------------------------------------------------------------------------------------------
    Total....................................................     1,570.68    8,624,776        100.0     1,221.38       679.12     1,272.18     2,117.47
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).

    There is significant difference in the resource utilization between 
early and late 30-day periods as demonstrated in Table 34. Moreover, 
the predictive power of the proposed PDGM in terms of estimating 
resource utilization improved when separating episodes into 30-day 
periods rather than 60-day periods (that is, the first and second 30-
day periods). We believe that a PDGM that accounts for the demonstrated 
increase in resource utilization in the first 30-day period better 
captures the variations in resource utilization and further promotes 
the goal of payment accuracy within the HH PPS.
    Moreover, we note that the resource cost estimates are derived from 
a very large, representative dataset. Therefore, we expect that the 
proposal reflects agencies' average costs for all home health service 
delivered in the period examined. We have constructed the revised case-
mix adjustment model based upon the actual resources expended by home 
health agencies for Medicare beneficiaries, which show that typically 
HHAs provide more visits during the first 30 days of care and utilize 
less resources thereafter. We reiterate that the timing categories are 
reflective of the utilization patterns observed in the data analyzed 
for the purposes of constructing the PDGM. The weights of the two 
timing categories are driven by the mix of services provided, the costs 
of services provided as determined by cost report data, the length of 
the visits, and the number of visits provided. The categorization of 
30-day periods as ``early'' and ``late'' serves to better align 
payments with already existing resource use patterns. This alignment of 
payment with resource use is not to be interpreted as placing a value 
judgment on particular care patterns or patient populations. Our goal 
in developing the PDGM is to provide an appropriate payment based on 
the identified resource use of different patient groups, not to 
encourage, discourage, value, or devalue one type of skilled care over 
another.
    For the reasons described above, we are proposing to classify the 
30-day periods under the proposed PDGM as ``early'' or ``late'' 
depending on when they occur within a sequence of 30-day periods. For 
the purposes of defining ``early'' and ``late'' periods for the 
proposed PDGM, we are proposing that only the first 30-day period in a 
sequence of periods be defined as ``early'' and all other subsequent 
30-day periods would be considered ``late''. Additionally, we are 
proposing that the definition of a ``home health sequence'' (as 
currently described in Sec.  484.230) will remain unchanged relative to 
the current system, that is, 30-day periods are considered to be in the 
same sequence as long as no more than 60 days pass between the end of 
one period and the start of the next, which is consistent with the 
definition of a ``home health spell of illness'' described at section 
1861(tt)(2) of the Act. We note

[[Page 32393]]

that because section 1861(tt)(2) of the Act is a definition related to 
eligibility for home health services as described at section 1812(a)(3) 
of the Act, it does not affect or restrict our ability to implement a 
30-dayunit of payment.
    At this time, the data do not support the notion that the first two 
30-day periods should be defined as early, as only the first 30-day 
period presents marked increase in resource use. We believe the PDGM's 
definition of ``early'' as the first 30-day period most accurately 
reflects agencies' average costs for patients with characteristics 
measured on the OASIS and used in defining payment groups and supports 
the shift from the current ``early'' category as defined by two 60-day 
episodes. We continue to believe that a PDGM that accounts for the 
actual, demonstrated increase in resource utilization in the first 30-
day period better captures the variations in resource utilization.
    Additionally, in our CY 2008 HH PPS final rule, we implemented an 
``early'' and ``late'' distinction in the HH PPS in which the late 
episode groupings were weighted more heavily than those episodes 
designated as early due to heavier resource use during later episodes 
(72 FR 49770). At that time, commenters expressed concerns that this 
heavier weighting for later episodes could lead to gaming by providers, 
with patients on service longer than would be appropriate, and 
providers not discharging patients when merited. During our analysis in 
support of subsequent refinements to the HH PPS in 2015, we analyzed 
the utilization patterns observed in the CY 2013 claims data and 
observed that the resource use for later episodes had indeed shifted 
such that later episodes had less resource use than earlier periods, 
which was the opposite of the pattern observed prior to CY 2008. 
Furthermore, in its 2016 Report to Congress, MedPAC noted that, between 
2002 and 2014, a pattern in home health emerged where the number of 
episodes of care provided to home health beneficiaries trended upwards, 
with the average number of episodes per user increasing by 18 percent, 
rising from 1.6 to 1.9 episodes per user.\34\ MedPAC noted that this 
upward trajectory coincided with, among other changes, higher payments 
for the third and later episodes in a consecutive spell of home health 
episodes. Given the longitudinal variation in terms of resource 
provision during home health episodes, we believe that restricting the 
``early'' definition to the first 30-day period is most appropriate for 
this facet of the PDGM. Our analysis of home health resource use as 
well as comments from the public that confirm that more resources are 
provided in the first 30 days provide compelling evidence to limit the 
definition of early to the first 30-day period.
---------------------------------------------------------------------------

    \34\ http://www.medpac.gov/docs/default-source/reports/chapter-8-home-health-care-services-march-2016-report-.pdf.
---------------------------------------------------------------------------

    Moreover, the public comments we received in response to the CY 
2018 HH PPS proposed rule presented conflicting predictions regarding 
anticipated provider behavior in response to the implementation of the 
alternative case-mix adjustment methodology. Several commenters stated 
that they expected providers to discharge patients after the first 30-
days of care, given that the case-mix weights are, on average, higher 
for the first 30-days of care. Other commenters expressed concern that 
providers may attempt to keep home health beneficiaries on service for 
as long as possible. Additionally, meeting the requirement of section 
51001 of the BBA of 2018, a Technical Expert Panel (TEP) was convened 
in February 2018 to solicit feedback and identify and prioritize 
recommendations from a wide variety of industry experts and patient 
representatives regarding the public comments received on the proposed 
alternative case-mix adjustment methodology. Comments on the timing 
categories and suggestions for refinement to this adjustment were very 
similar between those received on the CY 2018 HH PPS proposed rule and 
those made by the TEP participants. We note the PDGM case-mix weights 
reflect existing patterns of resource use observed in our analyses of 
CY 2016 home health claims data. Since we propose to recalibrate the 
PDGM case-mix weights on an annual basis to ensure that the case-mix 
weights reflect the most recent utilization data available at the time 
of rulemaking, future recalibrations of the PDGM case-mix weights may 
result in changes to the case-mix weights for early versus late 30-day 
periods of care as a result of changes in utilization patterns.
    Several commenters responding to the CY 2018 HH PPS proposed rule 
suggested that we revise the model such that a readmission to home 
health within the 60-day gap period results in an ``early'' instead of 
a ``late'' 30-day period. However, we note that the PDGM also includes 
a category determined specifically by source of admission, which would 
account for any readmission to home health. Under the PDGM we already 
account for whether the patient was admitted to home health care from 
the community or following an institutional stay, including inpatient 
stays that occur after the commencement of a home health care. For 
example, if the original home health stay was categorized as community 
and subsequently the patient experienced an inpatient stay, the 
subsequent home health stay would reset to institutional upon discharge 
from the inpatient setting. Similarly, we note that for the purposes of 
the timing component of the PDGM, an intervening hospital stay would 
not trigger re-categorization to an ``early'' period unless there were 
a 60-day gap in home health care. Therefore, we do not believe that the 
timing element of the PDGM would create a financial incentive to 
inappropriately encourage the admission of home health patients to an 
acute care setting in order to receive a subsequent home health 
referral in the higher-paid ``early'' category. Our proposal was 
intended to refine and to better fit costs incurred by agencies for 
patients with differing characteristics and needs under the prospective 
payment system. Therefore, we expect that the addition of both the 
source of admission, as well as the timing categories do reflect 
agencies' average costs for home health patients and used in defining 
payment groups. We believe that crafting a multi-pronged case-mix 
adjustment model, which includes adjustments based both on timing 
within a home health sequence as well as the source of the beneficiary 
admission, will serve to more accurately account for resources required 
for Medicare beneficiaries and similarly provide a differentiated 
payment amount for care.
    Several commenters responding to the CY 2018 HH PPS proposed rule 
expressed concern regarding the operational aspects of the timing 
element of the alternative case-mix adjustment methodology. As we 
described in the CY 2018 HH PPS proposed rule, and as we are proposing 
in this rule, we would use Medicare claims data and not the OASIS 
assessment in order to determine if a 30-day period is considered 
``early'' or ``late'' (82 FR 35309). We have developed claims 
processing procedures to reduce the amount of administrative burden 
associated with the implementation of the PDGM. Providers would not 
have to determine whether a 30-day period is early (the first 30-day 
period) or later (all adjacent 30-day periods beyond the first 30-day 
period) if they choose not to. Information from Medicare systems would 
be used during claims processing to automatically assign the 
appropriate timing category.

[[Page 32394]]

    To identify the first 30-day period within a sequence, the Medicare 
claims processing system would verify that the claim ``From date'' and 
``Admission date'' match. If this condition were to be met, our systems 
would send the ``early'' indicator to the HH Grouper for the 30-day 
period of care. When the claim was received by CMS's Common Working 
File (CWF), the system would look back 60 days to ensure there was not 
a prior, related 30-day period. If not, the claim would continue to be 
paid as ``early.'' If another related 30-day period were to be 
identified, that is an earlier 30-day period in the sequence, the claim 
would be flagged as ``late'' and returned to the shared systems for 
subsequent regrouping and re-pricing. Those periods that are not the 
first 30-day period in a sequence of adjacent periods, separated by no 
more than a 60 day gap, would be categorized as ``late'' periods and 
placed in corresponding PDGM categories.
    Early 30-day periods are defined as the initial 30-day period in a 
sequence of adjacent 30-day periods. Late 30-day periods are defined as 
all subsequent adjacent periods beyond the first 30-day period. Periods 
are considered to be adjacent if they are contiguous, meaning that they 
are separated by no more than a 60-day period between 30-day periods of 
care. In determining a gap, we only consider whether the beneficiary 
was receiving home health care from traditional fee-for-service 
Medicare.
    For example, if the beneficiary has not received home health care 
through traditional Medicare for at least 60 days, and then receives 
home health care from agency A, that is an early 30-day period. If that 
30-day period receives a PEP adjustment and agency B recertifies the 
beneficiary for a second 30-day period, that second 30-day period is 
now considered a late 30-day period. However, the beneficiary could 
have received home health care from other traditional Medicare 
providers within 60 days before coming to agency A. The designation of 
early or late would depend upon how many adjacent periods of care were 
received prior to coming to agency A. The CWF will examine claims upon 
receipt in comparison to all previously processed 30-day period to 
verify that the period is correctly designated as early or later.
    The 60-day period to determine a gap that will begin a new sequence 
of 30-day periods will be counted in most instances from the calculated 
end date of the 30-day period. That is, in most cases CWF will count 
from ``day 30'' of a 30-day period without regard to an earlier 
discharge date. The exception to this is for 30-day periods that were 
subject to PEP adjustment. In PEP cases, CWF will count 60 days from 
the date of the last billable home health visit provided. Under the 
current HH PPS, the partial episode payment (PEP) adjustment is a 
proportion of the episode payment that is based on the span of days, 
including the start-of-care date or first billable service date, 
through and including the last billable service date under the original 
plan of care, before the intervening event in a home health 
beneficiary's care, which is defined as: A beneficiary elected 
transfer, or a discharge and return to home health that would warrant, 
for purposes of payment, a new OASIS assessment, physician 
certification of eligibility, and a new plan of care. Because PEPs are 
paid based upon the last billable service date and not necessarily 
based on the last day of a 60-day episode, we would consider the end of 
the PEP HH episode as the last billable home health visit provided and 
begin the count of gap days from the date of the last billable home 
health visit and not ``day 30'' of a 30-day period.
    Regarding PEP adjustments, consider the following example: A 30-day 
period is opened on January 1, 2020 which would normally span until 
January 30, 2020. If this 30-day period were not subject to a PEP 
adjustment, any 30-day period beginning within 60 days following 
January 30, 2020 would be considered an adjacent 30-day period. In the 
case of a PEP adjustment, the determination of an adjacent 30-day 
period would no longer be based on day 60, but would instead be based 
on the latest billable visit in the 30-day period. Assume in the 
example, the patient is transferred to another HHA (triggering the PEP 
adjustment) on January 15, 2020 but the last billable visit is provided 
on January 13, 2020. In this case, any 30-day period beginning within 
60 days following the January 13, 2020 visit would be considered an 
adjacent 30-day period.
    Intervening stays in inpatient facilities will not create any 
special considerations in counting the 60-day gap. If an inpatient stay 
occurred within a period, it would not be a part of the gap, as 
counting would begin at ``day 60'' which in this case would be later 
than the inpatient discharge date. If an inpatient stay occurred within 
the time after the end of the HH period and before the beginning of the 
next one, those days would be counted as part of the gap just as any 
other days would.
    If periods are received after a particular claim is paid that 
change the sequence initially assigned to the paid period (for example, 
by service dates falling earlier than those of the paid period, or by 
falling within a gap between paid periods), Medicare systems will 
initiate automatic adjustments to correct the payment of any necessary 
periods.
    Upon receipt of a HH period coded to represent the early 30-day 
period in a sequence, Medicare systems will search the period history 
records that are maintained for each beneficiary. If an existing 30-day 
period is found on that history, the claim for the new period will be 
recoded to represent its sequence correctly and paid according to the 
changed code. In addition, when any new 30-day period is added to those 
history records for each beneficiary, the coding representing period 
sequence on previously paid periods will be checked to see if the 
presence of the newly added period causes the need for changes to those 
periods. If the need for changes is found, Medicare systems will 
initiate automatic adjustments to those previously paid periods.
    For example, a given 30-day period is initially determined to be 
and paid as the early period in a sequence of periods. After some 
amount of time, a claim is submitted by another HHA that occurs before 
the previously designated first period in the sequence of adjacent 
periods and is less than 60 days before the beginning of that 
previously designated first period. In such a case, the 30-day period 
corresponding to the newly submitted claim becomes the first 30-day 
period of this sequence of adjacent 30-day periods and thus is 
considered to be an early period. The 30-day period previously 
designated as the first 30-day period in the sequence of periods now 
becomes the second 30-day period in the sequence of adjacent periods, 
thus changing its status from that of an early period to that of a late 
period.
    We plan to develop materials regarding timing categories, including 
such topics as claims adjustments and resolution of claims processing 
issues. We will also update guidance in the Medicare Claims Processing 
Manual, as well as the Medicare Benefit Manual as appropriate with 
detailed procedures. We will also work with our Medicare Administrative 
Contractors (MACs) to address any concerns regarding the processing of 
home health claims as well as develop training materials to facilitate 
all aspects of the transition the PDGM, including the unique aspects of 
the timing categories.
    Several commenters responding to the CY 2018 HH PPS proposed rule 
had concerns regarding the potential for problematic provider behavior 
due to financial incentives. We note that we

[[Page 32395]]

fully intend to monitor provider behavior in response to the new PDGM. 
As we receive and evaluate new data related to the provision of 
Medicare home health care under the PDGM, we will reassess the 
appropriateness of the payment levels for ``early'' and ``late'' 
periods in a sequence of periods. Additionally, we will share any 
concerning behavior or patterns with the Medicare Administrative 
Contracts (MACs) as well as our Center for Program Integrity. We plan 
to monitor for and identify any variations in the patterns of care 
provided to home health patients, including both increased and 
decreased provision of care to Medicare beneficiaries. We note that an 
increase in the volume of Medicare beneficiaries receiving home health 
care may, in fact, represent a positive outcome of the PDGM, signaling 
increased access to care for the Medicare population, so long as said 
increase in volume of beneficiaries is appropriate and in keeping with 
eligibility guidelines for the Medicare home health benefit.
    We invite public comments on the timing categories in the proposed 
PDGM and the associated regulations text changes outlined in section 
III.F.13. of this proposed rule.
5. Admission Source Category
    In the CY 2018 HH PPS proposed rule, we described analysis showing 
the impact of the source of admission on home health resource use and 
proposed to classify periods into one of two admission source 
categories--community or institutional--depending on what healthcare 
setting was utilized in the 14 days prior to home health (82 FR 35309). 
We proposed that a 30-day period would be categorized as institutional 
if an acute or post-acute care (PAC) stay occurred in the 14 days prior 
to the start of the 30-day period of care. We also proposed that a 30-
day period would be categorized as community if there was no acute or 
PAC stay in the 14 days prior to the start of the 30-day period of 
care. We proposed to adopt this categorization by admission source with 
the implementation of alternative case-mix adjustment methodology 
refinements.
    The proposed admission source category was discussed in detail in 
the CY 2018 HH PPS proposed rule and we solicited public comments on 
the admission source component of the proposed alternative case-mix 
adjustment methodology. Several commenters expressed their support for 
the admission categories within the framework of the alternative case-
mix adjustment methodology refinements, as they believe that these 
groups would be meaningful and would more appropriately align the cost 
of Medicare home health care with payments, thereby improving the 
accuracy of the HH payment system under the alternative case-mix 
adjustment methodology refinements. Commenters also expressed a variety 
of concerns regarding admission source, stating that the source of a 
home health admission may not always correspond with home health 
beneficiary needs and associated provider costs, that the categories 
would discourage the admission of community entrants due to lower 
reimbursement, that the differentiation may encourage HHAs to favor 
hospitalization during an episode of home health care, that agencies' 
ability to provide the care for beneficiaries in the community would be 
reduced, and that small HHAs with no hospital affiliation would be 
negatively impacted. Several commenters recommended that CMS consider 
incorporating other clinical settings into the definition of the 
institutional category, including hospices and outpatient facilities. 
Several commenters also expressed concern regarding the operational 
aspects of the admission source category, requesting guidance for 
retroactive adjustments, plans for the claims readjustment process due 
to institutional claim issues, definitions for timely filing, and 
guidance regarding when occurrence codes may be utilized. Moreover, in 
accordance with the requirement of section 51001 of the BBA of 2018, a 
Technical Expert Panel (TEP) convened in February 2018 to solicit 
feedback and identify and prioritize recommendations from a wide 
variety of industry experts and patient representatives regarding the 
public comments received on the proposed alternative case-mix 
adjustment methodology. Comments on the admission source categories and 
suggestions for refinement to this element of the alternative case-mix 
system were very similar between those received in response to the CY 
2018 HH PPS proposed rule and those provided by the TEP participants.
    We appreciate commenters' feedback regarding the admission source 
element of the alternative case-mix adjustment methodology. The 
intention of the proposal included in the CY 2018 HH PPS proposed rule, 
including the admission source component, was to refine and to better 
fit costs incurred by agencies for patients with differing 
characteristics and needs under the HH prospective payment system, and 
we believe that the differing weights for source of admission will 
serve to promote appropriate alignment between costs and payment within 
the HH PPS.
    As described in the CY 2018 HH PPS proposed rule, our analytic 
findings demonstrate that institutional admissions have higher average 
resource use when compared with community admissions, which ultimately 
led to the inclusion of the admission source category within the 
framework of the alternative case-mix adjustment methodology 
refinements (82 FR 35309). The differences in care needs during home 
health based on admission source are illustrated in the resource 
utilization figures presented in Table 35, which shows the distribution 
of admission sources as well as average resource use for 30-day periods 
by admission source.

        Table 35--Average Resource Use by Admission Source (14 Day Look-Back; 30 Day Periods) Admission Source, Community and Institutional Only
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Standard       25th                      75th
                                                                 Average     Frequency    Percent of   deviation    percentile     Median     percentile
                                                                 resource    of periods    periods    of resource  of resource    resource   of resource
                                                                   use                                    use          use          use          use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Community....................................................    $1,363.11    6,408,805         74.3    $1,119.20      $570.26    $1,062.05    $1,817.75
Institutional................................................     2,171.00    2,215,971         25.7     1,303.24     1,246.05     1,920.06     2,791.91
                                                              ------------------------------------------------------------------------------------------
    Total....................................................     1,570.68    8,624,776        100.0     1,221.38       679.12     1,272.18     2,117.47
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).

    Institutional admissions have significantly higher average resource 
use at $2,171.00 compared with community admissions at $1,363.11, a 
difference of $807.89. Median values of resource use also show a 
significant difference

[[Page 32396]]

between sources of admission, with institutional resource use at 
$1,920.06 while community resource use is at $1,062.05, a difference of 
$858.01. The pattern of higher resource use for institutional 
admissions as compared to community admissions remains consistent for 
the 25th and 75th percentiles, with a difference of approximately $675 
and $974, respectively.
    Additionally, we note that we do not show preference to any 
particular patient profile, but rather aim to better align home health 
payment with the costs associated with providing care. As discussed in 
our CY 2018 HH PPS proposed rule, current research around those 
patients who are discharged from acute and PAC settings shows that 
these beneficiaries tend to be sicker upon admission, are being 
discharged rapidly back to the community, and are more likely to be re-
hospitalized after discharge due to the acute nature of their 
illness.\35\ Additionally, as further described in the CY 2018 HH PPS 
proposed rule, research studies indicate that patients admitted to home 
health from institutional settings are vulnerable to adverse effects 
and injury because of the functional decline that occurs due to their 
institutional stay, indicating that the patient population referred 
from an institutional setting requires more concentrated resources and 
supports to account for and mitigate this functional decline.\36\ 
Moreover, as described in the CY 2018 HH PPS proposed rule, research 
suggests that the reduction in monitoring from the level typically 
experienced in an inpatient facility to that in the home environment 
can potentially cause gaps in care and consequently increased risk for 
adverse events for the newly-admitted home health beneficiary, and any 
negative impacts of the transition to the home setting can be reduced 
by an appropriate increase in care for the beneficiary, particularly 
through more frequent assessment of their condition and ongoing 
monitoring once transferred to the home environment.\37\ Furthermore, 
research discussed in our CY 2018 HH PPS proposed rule shows that 
beneficiaries discharged from institutional settings are more 
vulnerable because of, among other factors, the need to manage new 
health care issues, major modifications to medication interventions, 
and the coordination of follow-up appointments, which could lead to the 
risk for adverse drug events, for errors in a beneficiary's medication 
regimen, and for the need to readmit to the hospital due to 
deterioration of the patient's condition.\38\ Additionally, we note 
that the goal of the admission source variable is not to identify or 
evaluate for increases in re-hospitalization in the home health 
beneficiary population but rather to align payment with the costs of 
providing home health care. Other CMS initiatives such as the HH QRP as 
well as the HH VBP demonstration take into account readmissions, among 
other measures of quality. However, because this population is at 
higher risk for possible readmission to an institutional setting, we 
believe that more intensive supports, partnered with differentiated 
payment weights, are appropriate in crafting a payment system that 
better reflects the costs incurred by HHAs while also promoting the 
delivery of quality care to the Medicare population. In summary, 
clinical research continues to indicate that the needs of the 
institutional population are intensive. Likewise, our analysis of home 
health data shows that costs sustained by home health agencies for 
those beneficiaries admitted from institutional settings are higher 
than community entrants. Therefore, we believe that accounting for 
these material differences in the care needs of the beneficiary 
population admitted from institutional settings and their resultant, 
differentiated resource use, will serve to better align payments with 
actual costs incurred by HHAs when caring for Medicare beneficiaries.
---------------------------------------------------------------------------

    \35\ O'Connor, M. (2012, February). Hospitalization Among 
Medicare-Reimbursed Skilled Home Health Recipients. Retrieved March 
02, 2017, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4690459.
    \36\ Rosati, R. J., Huang, L., Navaie-Waliser, M., & Feldman, P. 
H. (2003). Risk Factors for Repeated Hospitalizations Among Home 
Healthcare Recipients. Journal For Healthcare Quality, 25(2), 4-11. 
doi:10.1111/j.1945-1474.2003.tb01038.x.
    \37\ Forster, A. J. (2003). The Incidence and Severity of 
Adverse Events Affecting Patients after Discharge from the Hospital. 
Annals of Internal Medicine, 138(3), 161. doi:10.7326/0003-4819-138-
3-200302040-00007.
    \38\ Meyers, A. G., Salanitro, A., Wallston, K. A., Cawthon, C., 
Vasilevskis, E. E., Goggins, K. M., . . . Kripalani, S. (2014). 
Determinants of health after hospital discharge: Rationale and 
design of the Vanderbilt Inpatient Cohort Study (VICS). BMC Health 
Services Research, 14(1). doi:10.1186/1472-6963-14-10.
---------------------------------------------------------------------------

    We expect that HHAs will continue to provide the most appropriate 
care to Medicare home health beneficiaries, regardless of admission 
source or any other category related to home health payment. As we 
noted in the CY 2018 HH PPS proposed rule, the primary goal of home 
health care is to provide restorative care when improvement is 
expected, maintain function and health status if improvement is not 
expected, slow the rate of functional decline to avoid 
institutionalization in an acute or post-acute care setting, and/or 
facilitate transition to end-of-life care as appropriate (82 FR 35348). 
The primary goal of the HH PPS is to align payment with the costs of 
providing home health care. Furthermore, in our CY 2000 HH PPS final 
rule, commenters asserted that patients admitted to home health from 
the hospital were often more acutely ill and resource-intensive than 
other patients, particularly when compared with beneficiaries who had 
no institutional care prior to admission (64 FR 41147). We appreciate 
the concerns expressed in response to the CY 2018 HH PPS proposed rule 
regarding possible behavioral changes by providers given the perceived 
incentives created by the admission source categories within the 
alternative case-mix adjustment methodology. However, we continue to 
expect that HHAs will provide the appropriate care needed by all 
beneficiaries who are eligible for the home health benefit, including 
those beneficiaries with medically-complex conditions who are admitted 
from the community. We will carefully monitor the outcomes of the 
proposed change, including any impacts to community entrants, and make 
further refinements as necessary.
    Regarding the incorporation of other clinical settings into the 
definition of the institutional category under the alternative case-mix 
adjustment methodology that some commenters raised in response to the 
CY 2018 HH PPS proposed rule, such as emergency department (ED) use and 
observational stays, we propose to only include those stays that are 
considered institutional stays in other Medicare settings. For example, 
observational stays do not count towards the 3-day window for an 
admission to a SNF because they are not categorized as inpatient. 
Additionally, in our analysis of 2017 HH claims data, we identified 
those HH stays that, within the 14 days prior to admission to HH, had 
been preceded by ED visits or outpatient observational stays and 
isolated these stays from stays that would otherwise be grouped into 
the community admission source category. As demonstrated in Table 36, 
30-day periods of care for beneficiaries with a preceding ED visit 
(which would otherwise be grouped into the community admission source 
category) do not show higher resource use when compared to those 
beneficiaries entering from acute or PAC settings, with an average 
resource use at $1,660.64 per home health period as compared to 
$2,171.00 for institutional admits. When compared with those patients 
admitted from the community, admissions from

[[Page 32397]]

the ED show somewhat higher resource use at $1,660.64 per home health 
period as compared to $1,337.73 for community admits. We note that the 
volume of patients with preceding ED visits is relatively low, at about 
5.8 percent of total home health periods.

     Table 36--Average Resource Use by Admission Source (14 Day Look-Back, 30 Day Periods) Admission Source: Community, Institutional, and Emergency
                                                                       Department
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Standard       25th                      75th
                                                                 Average     Number of    Percent of   deviation    percentile     Median     percentile
                                                                 resource      30-day       30-day    of resource  of resource    resource   of resource
                                                                   use        periods      periods        use          use          use          use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Community....................................................    $1,337.73    5,905,217         68.5    $1,108.57      $558.54    $1,035.34    $1,779.73
Institutional................................................     2,171.00    2,215,971         25.7     1,303.24     1,246.05     1,920.06     2,791.91
Emergency Department.........................................     1,660.64      503,588          5.8     1,197.60       782.63     1,396.50     2,225.38
                                                              ------------------------------------------------------------------------------------------
    Total....................................................     1,570.68    8,624,776        100.0     1,221.38       679.12     1,272.18     2,117.47
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Similarly, 30-day periods for beneficiaries with preceding 
observational stays (which would otherwise be grouped into the 
community admission source category) also do not show higher resource 
use when compared to those beneficiaries entering from acute or PAC 
settings, as described in Table 37, with average resource use at 
$1,820.06 per home health period as compared to $2,171.00 for 
institutional admits.

   Table 37--Average Resource Use by Admission Source (14 Day Look-Back; 30 Day Periods) Admission Source: Community, Institutional, and Observational
                                                                          Stays
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Standard       25th                      75th
                                                                 Average     Number of    Percent of   deviation    percentile     Median     percentile
                                                                 resource      30-day       30-day    of resource  of resource    resource   of resource
                                                                   use        periods      periods        use          use          use          use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Community....................................................    $1,350.90    6,242,043        72.4%    $1,114.94      $564.31    $1,048.86    $1,799.27
Institutional................................................     2,171.00    2,215,971        25.7%     1,303.24     1,246.05     1,920.06     2,791.91
Observational Stays..........................................     1,820.06      166,762         1.9%     1,180.96       960.15     1,589.08     2,399.68
                                                              ------------------------------------------------------------------------------------------
    Total....................................................     1,570.68    8,624,776       100.0%     1,221.38       679.12     1,272.18     2,117.47
--------------------------------------------------------------------------------------------------------------------------------------------------------

    When compared with those patients admitted from the community, 
admissions from observational stays show higher resource use at 
$1,820.06 per home health period as compared to $1,350.90 for community 
admits. However, the volume of patients with preceding observational 
stays is very low, at about 2 percent of total home health periods.
    In summary, home health stays with preceding observational stays 
and ED visits show resource use that falls between that of the 
institutional and community categories. However, the resource use is 
not equivalent to that of the institutional settings; therefore, we do 
not believe it appropriate to include observational stays and ED visits 
in the institutional category for the purposes of the PDGM. 
Additionally, including these stays in the institutional category would 
lead to a small reduction in the overall average resource use and 
related case mix weights for groups admitted from acute and PAC 
settings. Moreover, including ED or observational stays with discharges 
from acute care hospitals, LTCHs, IRFs and SNFs would be inconsistent 
with section 1861(tt)(1) of the Act, which defines the term ``post-
institutional home health services'' as discharges from hospitals 
(which include IRFs and LTCHs) and SNFs within 14 days of when home 
health care is initiated.
    We explored the option of creating a third admission source 
category specifically for observational stays/ED visits. In order to 
more fully understand the potential impact of a third category, we 
analyzed the overall impact of the creation of such a category. For the 
purposes of this analysis, in the event that a home health stay was 
preceded by both an institutional stay and an observation stay or ED 
visit, the case would be grouped into the institutional category. Our 
findings indicate for those HH stays with a preceding outpatient 
observational stay/ED visit, the overall payment weight for associated 
groups for ``early'' 30-day periods (as defined in section III.F.4 of 
this rule) would be approximately 6 percent higher than the community 
admission counterparts, whereas institutional stays would see weights 
that are approximately 19 percent higher than community admissions. 
When examining the overall payment weights for ``late'' 30-day periods 
(as defined in section III.F.4 of this rule), HH stays with a preceding 
outpatient admission would observe weights that are approximately 10 
percent higher than the community admission counterparts, whereas 
institutional stays would see weights that are approximately 43 percent 
higher than community admissions. However, we are concerned that a 
third admission source category for observational stays and ED visits 
could create an incentive for providers to encourage outpatient 
encounters both prior to a 30-day period of care or within a 30-day 
period of care within 14 days of the start of the next 30-day period, 
thereby potentially inappropriately increasing costs to the Medicare 
program overall. The clinical threshold for an observational stay or an 
ED visit is not as high as that required for an institutional 
admission, and we are concerned that home health agencies may encourage 
beneficiaries to engage with emergency departments before initiating a 
home health stay.
    For example, in the FY 2014 IPPS/LTCH PPS final rule and also the 
Medicare Benefit Policy Manual Chapter 1--Inpatient Hospital Services 
Covered Under Part A, CMS clarified and specified in the regulations 
that an individual becomes an inpatient of a hospital, including a long 
term care hospital or a Critical Access Hospital, when formally 
admitted as such pursuant to an order for inpatient admission by a 
physician or other qualified practitioner described in the final 
regulations (78 FR 50495). The

[[Page 32398]]

order is required for payment of hospital inpatient services under 
Medicare Part A. CMS also specified that for those hospital stays in 
which the physician expects the beneficiary to require care that 
crosses two midnights and admits the beneficiary based upon that 
expectation, Medicare Part A payment is generally appropriate. 
Additionally, for the purposes of admissions to skilled nursing 
facilities, the Medicare Benefit Policy Manual Chapter 8--Coverage of 
Extended Care (SNF) Services Under Hospital Insurance states that in 
order to qualify for post-hospital extended care services, the 
individual must have been an inpatient of a hospital for a medically 
necessary stay of at least three consecutive calendar days and that 
time spent in observation or in the emergency room prior to (or in lieu 
of) an inpatient admission to the hospital does not count toward the 3-
day qualifying inpatient hospital stay, as a person who appears at a 
hospital's emergency room seeking examination or treatment or is placed 
on observation has not been admitted to the hospital as an inpatient; 
instead, the person receives outpatient services. Furthermore, 
admission to an inpatient rehabilitation facility (IRF) requires that 
for IRF care to be considered reasonable and necessary, the 
documentation in the patient's IRF medical record must demonstrate a 
reasonable expectation that the patient must require active and ongoing 
intervention of multiple therapy disciplines, at least one of which 
must be PT or OT; require an intensive rehabilitation therapy program, 
generally consisting of 3 hours of therapy per day at least 5 days per 
week; or in certain well-documented cases, at least 15 hours of 
intensive rehabilitation therapy within a 7-consecutive day period, 
beginning with the date of admission; reasonably be expected to 
actively participate in, and benefit significantly from the intensive 
rehabilitation therapy program; require physician supervision by a 
rehabilitation physician, with face-to-face visits at least 3 days per 
week to assess the patient both medically and functionally and to 
modify the course of treatment as needed; and require an intensive and 
coordinated interdisciplinary team approach to the delivery of 
rehabilitative care, as described in detail in Medicare Benefit Policy 
Manual, Chapter 1--Inpatient Hospital Services Covered Under Part A 
110.2--Inpatient Rehabilitation Facility Medical Necessity Criteria.
    Conversely, CMS specified that for hospital stays in which the 
physician expects the patient to require care less than two midnights, 
payment under Medicare Part A is generally inappropriate. (However, we 
note that in the CY 2016 Outpatient Prospective Payment System final 
rule, CMS adopted a policy such that for stays for which the physician 
expects the patient to need less than two midnights of hospital care 
(and the procedure is not on the inpatient-only list or otherwise 
listed as a national exception), an inpatient admission may be payable 
under Medicare Part A on a case-by-case basis based on the judgment of 
the admitting physician (80 FR 70297).)
    Regarding emergency department visits by Medicare beneficiaries, 
services are generally covered by Medicare Part B in instances where a 
beneficiary experiences an injury, a sudden illness, or an illness that 
quickly worsens. In the case of observational stays, as described in 
the Medicare Claims Processing Manual, Chapter 12, observation care is 
a well-defined set of specific, clinically appropriate services, which 
include ongoing short term treatment, assessment, and reassessment 
before a decision can be made regarding whether patients will require 
further treatment as hospital inpatients or if they are able to be 
discharged from the hospital. As described in the Medicare Benefit 
Policy Manual, Chapter 6--Hospital Services Covered Under Part B 20.6--
Outpatient Observation Services, observation services are commonly 
ordered for patients who present to the emergency department and who 
then require a significant period of treatment or monitoring in order 
to make a decision concerning their admission or discharge. Moreover, 
the Medicare Claims Processing Manual in Chapter 4--Part B Hospital, 
290--Outpatient Observation Services states that observation services 
are covered by Medicare only when provided by the order of a physician 
or another individual authorized by state licensure law and hospital 
staff bylaws to admit patients to the hospital or to order outpatient 
tests. In the majority of cases, the decision whether to discharge a 
patient from the hospital following resolution of the reason for the 
observation care or to admit the patient as an inpatient can be made in 
less than 48 hours, usually in less than 24 hours. In only rare and 
exceptional cases do reasonable and necessary outpatient observation 
services span more than 48 hours. In summary, the clinical thresholds 
for coverage and payment for an admission to institutional settings are 
higher when compared with ED visits and observational stays. Finally, 
we note that the proportion of home health periods with admissions from 
ED visits and observational stays is low relative to community and 
institutional counterparts. Creating a third community admission source 
category for observational stays and ED visits would potentially 
introduce added complexity into the payment system for a small portion 
of home health stays, which could lead to the creation of payment 
groups that contain very few stays with very little difference in case-
mix weights across the landscape of groups.
    For all of these reasons, we believe that incorporating HH stays 
with preceding observational stays and ED visits into the community 
admission category is most appropriate at this time. However, we note 
that as we receive and evaluate new data related to the provision of 
Medicare home health care under the PDGM, we will continue to assess 
the appropriateness of the payment levels for admission source within a 
home health period and give consideration to any cost differentiation 
evidenced by the resources required by those home health patients with 
a preceding outpatient event.
    Regarding the operational aspects of the admission source category, 
as described in the CY 2018 HH PPS proposed rule, we have developed 
automated claims processing procedures with the goal of reducing the 
amount of administrative burden associated with the admission source 
category of the alternative case-mix adjustment methodology (82 FR 
35309). For example, Medicare systems will automatically determine 
whether a beneficiary has been discharged from an institutional setting 
for which Medicare paid the claim, using information used during claims 
processing to systematically identify admission source and address this 
issue. When the Medicare claims processing system receives a Medicare 
home health claim, the systems will check for the presence of a 
Medicare acute or PAC claim for an institutional stay. If such an 
institutional claim is found, and the institutional stay occurred 
within 14 days of the home health admission, our systems will trigger 
an automatic adjustment of the corresponding HH claim to the 
appropriate institutional category. Similarly, when the Medicare claims 
processing system receives a Medicare acute or PAC claim for an 
institutional stay, the systems will check for the presence of a 
subsequent HH claim with a community payment group. If such a HH claim 
is found, and the institutional stay occurred within 14 days of the 
home health admission, our systems will trigger an automatic

[[Page 32399]]

adjustment of the HH claim to the appropriate institutional category. 
This process may occur any time within the 12-month timely filing 
period for the acute or PAC claim. The OASIS assessment will not be 
utilized in evaluating for admission source information.
    Moreover, as we also proposed in the CY 2018 HH PPS proposed rule, 
we propose in this rule that newly-created occurrence codes would also 
be established, allowing HHAs to manually indicate on Medicare home 
health claims that an institutional admission had occurred prior to the 
processing of an acute or PAC Medicare claim, if any, in order to 
receive the higher payment associated with the institutional admission 
source sooner (82 FR 35312). However, the usage of the occurrence codes 
is limited to situations in which the HHA has information about the 
acute or PAC stay. We also noted that the use of these occurrence codes 
would not be limited to home health beneficiaries for whom the acute or 
PAC claims were paid by Medicare. HHAs would also use the occurrence 
codes for beneficiaries with acute or PAC stays paid by other payers, 
such as the Veterans Administration (VA).
    If a HHA does not include on the HH claim the occurrence code 
indicating that a home health patient had a previous institutional 
stay, processed either by Medicare or other institutions such as the 
VA, such an admission will be categorized as ``community'' and paid 
accordingly. However, if later a Medicare acute or PAC claim for an 
institutional stay occurring within 14 days of the home health 
admission is submitted within the timely filing deadline and processed 
by the Medicare systems, the HH claim would be automatically adjusted 
and re-categorized as an institutional admission and appropriate 
payment modifications would be made. If there was a non-Medicare 
institutional stay occurring within 14 days of the home health 
admission but the HHA was not aware of such a stay, upon learning of 
such a stay, the HHA would be able to resubmit the HH claim that 
included an occurrence code, subject to the timely filing deadline, and 
payment adjustments would be made accordingly.
    We note that the Medicare claims processing system will check for 
the presence of an acute or PAC Medicare claim for an institutional 
stay occurring within 14 days of the home health admission on an 
ongoing basis and automatically assign the home health claim as 
``community'' or ``institutional'' appropriately. As a result, with 
respect to a HH claim with a Medicare institutional stay occurring 
within 14 days of home health admission, we will not require the 
submission of an occurrence code in order to appropriately categorize 
the HH claim to the applicable admission source. With respect to a HH 
claim with a non-Medicare institutional stay occurring with 14 days of 
home health admission, a HHA would need to submit an occurrence code on 
the HH claim in order to have the HH claim categorized as 
``institutional'' and paid the associated higher amount. Additionally, 
we plan to provide education and training regarding all aspects of the 
admission source process and to develop materials for guidance on 
claims adjustments, for resolution of claims processing issues, for 
defining timely filing windows, and for appropriate usage of occurrence 
codes through such resources as the Medicare Learning Network. We will 
also update guidance in the Medicare Claims Processing Manual as well 
as the Medicare Benefit Policy Manual as appropriate with detailed 
procedures. We will also work with our Medicare Administrative 
Contractors (MACs) to address any concerns regarding the processing of 
home health claims as well as develop training materials to facilitate 
all aspects of the transition to the PDGM, including the unique aspects 
of the admission source categories.
    With regards to the length of time for resubmission of home health 
claims that reflect a non-Medicare institutional claim, all appropriate 
Medicare rules regarding timely filing of claims will still apply. 
Procedures required for the resubmission of home health claims will 
apply uniformly for those claims that require editing due to the need 
to add or remove occurrence codes. Details regarding the timely filing 
guidelines for the Medicare program are available in the Medicare 
Claims Processing Manual, Chapter 1--General Billing Requirements, 
which is available at the following website: https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c01.pdf. 
Additionally, adjustments to any re-submitted home health claims will 
be processed in the same manner as other edited Medicare home health 
claims. Additionally, we plan to perform robust testing within the 
Medicare claims processing system to optimize and streamline the 
payment process.
    Regarding the process by which HHAs should verify a non-Medicare 
institutional stay, as we noted in in the CY 2018 HH PPS proposed rule, 
we expect home health agencies would utilize discharge summaries from 
all varieties of institutional providers (that is, Medicare and non-
Medicare) to inform the usage of these occurrence codes, and these 
discharge documents should already be part of the beneficiary's home 
health medical record used to support the certification of patient 
eligibility as outlined in Sec.  424.22(c) (82 FR 35309). Providers 
should utilize existing strategies and techniques for verification of 
such stays and incorporate relevant clinical information into the plan 
of care, as is already required by our Conditions of Participation.
    Our evaluation process within the Medicare claims processing system 
will check for the presence of an acute or PAC Medicare claim for an 
institutional stay occurring within 14 days of the home health 
admission on an ongoing basis. Under this approach, the Medicare 
systems would only evaluate for whether an acute or PAC Medicare claim 
for an institutional stay occurring within 14 days of the home health 
admission was processed by Medicare, not whether it was paid. 
Therefore, we do not expect that a home health claim will be denied due 
to unpaid Medicare claims for preceding acute or PAC admissions. 
Moreover, as previously stated above, we note that providers would have 
the option to submit the occurrence code indicating a preceding 
institutional stay in order to categorize the home health admission as 
``institutional.'' In the case of a HHA submitting an occurrence code 
because of a preceding Medicare institutional stay, if upon medical 
review after finding no Medicare acute or PAC claims in the National 
Claims History, and there is documentation of a Medicare acute or PAC 
stay within the 14 days prior to the home health admission, but the 
institutional setting did not submit its claim in a timely fashion, or 
at all, we would permit the institutional categorization for the 
payment of the home health claim through appropriate administrative 
action. Similarly, in the case of a HHA submitting an occurrence code 
because of a preceding non-Medicare institutional stay, if 
documentation of a non-Medicare acute or PAC stay within the 14 days 
prior to the home health admission, is found, we would permit the 
categorization of the home health claim as ``institutional''.
    However, if upon medical review after finding no acute or PAC 
Medicare claims in the National Claims History, and there is no 
documentation of an acute or PAC stay, either a Medicare or non-
Medicare stay, within 14 days of the home health admission, we would

[[Page 32400]]

correct the overpayment. If upon medical review after finding no 
Medicare acute or PAC claims in the National Claims History and we find 
that an HHA is systematically including occurrence codes that indicate 
the patient's admission source was ``institutional,'' but no 
documentation exists in the medical record of Medicare or non-Medicare 
stays, we would refer the HHA to the zone program integrity contractor 
(ZPIC) for further review. Moreover, we intend to consider targeted 
approaches for medical review after the implementation of the admission 
source element of the PDGM, including potentially identifying HHAs that 
have claims that are consistently associated with acute or PAC denials, 
whose utilization pattern of acute or PAC occurrence codes is aberrant 
when compared with their peers, or other such metrics that would 
facilitate any targeted reviews.
    For all of the reasons described above, we are proposing to 
establish two admission source categories for grouping 30-day periods 
of care under the PDGM--institutional and community--as determined by 
the healthcare setting utilized in the 14 days prior to home health 
admission. We are proposing that 30-day periods for beneficiaries with 
any inpatient acute care hospitalizations, skilled nursing facility 
(SNF) stays, inpatient rehabilitation facility (IRF) stays, or long 
term care hospital (LTCH) stays within the 14 days prior to a home 
health admission would be designated as institutional admissions. We 
are proposing that the institutional admission source category would 
also include patients that had an acute care hospital stay during a 
previous 30-day period of care and within 14 days prior to the 
subsequent, contiguous 30-day period of care and for which the patient 
was not discharged from home health and readmitted (that is, the 
admission date and from date for the subsequent 30-day period of care 
do not match) as we acknowledge that HHAs have discretion as to whether 
they discharge the patient due to a hospitalization and then readmit 
the patient after hospital discharge. However, we are proposing that we 
would not categorize PAC stays (SNF, IRF, LTCH stays) that occur during 
a previous 30-day period and within 14 days of a subsequent, contiguous 
30-day period of care (that is, the admission date and from date for 
the subsequent 30-day period of care do not match) as institutional, as 
we would expect the HHA to discharge the patient if the patient 
required PAC in a different setting and then readmitted the patient, if 
necessary, after discharge from such setting. If the patient was 
discharged and then readmitted to home health, the admission date and 
``from'' date on the 30-day claim would match and the claims processing 
system will look for an acute or a PAC stay within 14 days of the home 
health admission date. This admission source designation process would 
be applicable to institutional stays paid by Medicare or any other 
payer. All other 30-day periods would be designated as community 
admissions.
    For the purposes of a RAP, we would only adjust the final home 
health claim submitted for source of admission. For example, if a RAP 
for a community admission was submitted and paid, and then an acute or 
PAC Medicare claim was submitted for that patient before the final home 
health claim was submitted, we would not adjust the RAP and would only 
adjust the final home health claim so that it reflected an 
institutional admission. Additionally, HHAs would only indicate 
admission source occurrence codes on the final claim and not on any 
RAPs submitted.
    We invite public comments on the admission source component of the 
proposed PDGM payment system.
6. Clinical Groupings
    In the CY 2018 HH PPS proposed rule (82 FR 35307), we discussed the 
findings of the Home Health Study Report to Congress, which indicates 
that the current payment system may encourage HHAs to select certain 
types of patients over others.\39\ Patients with a higher severity of 
illness, including those receiving a greater level of skilled nursing 
care; for example, patients with wounds, with ostomies, or who are 
receiving total parenteral nutrition or mechanical ventilation were 
associated with higher resource use and lower margins. This may have 
produced a disincentive for providing care for patients with higher 
clinical acuity, and thereby may have limited access of home health 
services to these vulnerable patient populations.\40\ We noted that 
payment should be predicated on resource use and proposed that 
adjusting payment based on identified clinical characteristics and 
associated services would better align payment with resource use.
---------------------------------------------------------------------------

    \39\ Report to Congress. Medicare Home Health Study: An 
Investigation on Access to Care and Payment for Vulnerable Patient 
Populations. Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/Downloads/HH-Report-to-Congress.pdf.
    \40\ Report to the Congress: Medicare Payment Policy. (2015)Home 
health care services: Assessing payment adequacy and updating 
payments. Ch.9 http://www.medpac.gov/docs/default-source/reports/chapter-9-home-health-care-services-march-2015-report-.pdf?sfvrsn=0.
---------------------------------------------------------------------------

    For these reasons, we propose grouping 30-day periods of care into 
six clinical groups: Musculoskeletal Rehabilitation, Neuro/Stroke 
Rehabilitation, Wounds--Post-Op Wound Aftercare and Skin/Non-Surgical 
Wound Care, Behavioral Health Care (including Substance Use Disorder), 
Complex Nursing Interventions, Medication Management, Teaching and 
Assessment (MMTA). These clinical groups are designed to capture the 
most common types of care that HHAs provide. We propose placement of 
each 30-day period of care into a specific clinical group based on the 
primary reason the patient is receiving home health care as determined 
by the principal diagnosis reported on the claim. Although the 
principal diagnosis code is the basis for the clinical grouping, 
secondary diagnosis codes and patient characteristics would then be 
used to case-mix adjust the period further through the comorbidity 
adjustment and functional level. A complete list of ICD-10-CM codes and 
their assigned clinical groupings is posted on the CMS HHA Center web 
page (https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html). More information on the analysis and development of the 
groupings can be found in the CY 2018 HH PPS proposed rule as well as 
the HHGM technical report from December 2016, also available on the HHA 
Center webpage.
    In the CY 2018 HH PPS proposed rule, we solicited comments on the 
clinical groups and the assigned clinical groupings of the ICD-10-CM 
codes. Additionally, in February 2018, a Technical Expert Panel (TEP) 
was held in order to gain insight from industry leaders, clinicians, 
patient representatives, and researchers with experience in home health 
care and/or experience in home health agency management. Many 
commenters and TEP members supported the patient-centered approach to 
grouping patients by clinical characteristics, and several commenters 
felt that the clinical groupings did capture the majority of 
characteristics of the home health population. Specifically, commenters 
generally approved of the higher-weighted complex nursing and wound 
groups, and agreed with the ``importance the HHGM places on these 
complex patients through its proposed payment rate.'' One commenter 
stated that ``the most complex and costly beneficiaries for a HHA are 
those that require intensive nursing care, while

[[Page 32401]]

those that require intensive therapy produce a significant margin with 
less cost.'' Additional comments on the clinical groups generally 
included the following: Concern that some diagnosis codes are not used 
to group claims into the six clinical groups; concern about reduced 
therapy use in the clinical groups that aren't specifically for 
musculoskeletal or neurological rehabilitation; concern that the groups 
do not capture clinically complex patients that require multiple home 
health disciplines; suggestions that the clinical groups should be 
based on impairments rather than diagnoses; and concern that the MMTA 
clinical group encompasses too many diagnosis codes. Several commenters 
expressed concern that certain ICD 10-CM diagnosis codes were not used 
for payment (for example, codes that were not used to group claims into 
the six clinical groupings), which could possibly restrict access to 
the benefit or force beneficiaries to seek care in institutional 
settings. Others had concerns regarding specific diagnosis codes they 
felt should be reassigned to different clinical groups.
    As outlined in the HHGM technical report from December 2016 and in 
the CY 2018 HH PPS proposed rule (82 FR 35314), there were several 
reasons why a diagnosis code was not assigned to one of the six 
clinical groups. These included if the diagnosis code was too vague, 
meaning the code does not provide adequate information to support the 
need for skilled home health services (for example H57.9, Unspecified 
disorder of eye and adnexa); the code, based on ICD 10-CM, American 
Hospital Association (AHA) Coding Clinic, or Medicare Code Edits (MCE) 
would indicate a non-home health service (for example, dental codes); 
the code is a manifestation code subject to a manifestation/etiology 
convention, meaning that the etiology code must be reported as the 
principal diagnosis, or the code is subject to a code first sequencing 
convention (for example, G99.2 myelopathy in diseases classified 
elsewhere); the code identifies a condition which would be unlikely to 
require home health services (for example, L81.2, Freckles); the code 
is restricted to the acute care setting per ICD 10-CM/AHA Coding 
Clinic, or the diagnosis indicates death as the outcome (for example 
S06.1X7A, Traumatic cerebral edema with loss of consciousness of any 
duration with death due to brain injury prior to regaining 
consciousness). We did, however, review and re-group certain codes 
based on commenter feedback. For example, with regard to the 
classification of N39.0, Urinary tract infection, site not specified as 
an invalid code to group the home health period of care, we do agree 
that absent definitive information provided by the referring physician, 
a home health clinician would not know the exact site of a urinary 
tract infection (UTI). As such, Urinary tract infection, site not 
specified (N39.0) will be grouped under MMTA, as the home health 
services required would most likely involve teaching about the 
treatment for the UTI, as well as evaluating the effectiveness of the 
medication regimen. We encourage HHAs to review the list of diagnosis 
codes in the PDGM Grouping Tool posted on the HHA Center web page at: 
https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html. Additionally, the ICD-10-CM code set exceeds the ICD-9-CM 
in the number of diagnoses and conditions and contains codes that are 
much more granular. Therefore, we disagree that excluding certain codes 
from payment will restrict access, considering the increase in 
diagnoses potentially requiring home health.
    With regard to commenter concern that the HHGM clinical groups did 
not account for the need for therapy in home health periods that are 
not specifically grouped into musculoskeletal or neurological 
rehabilitation, we continue to expect the ordering physician, in 
conjunction with the therapist to develop and follow a plan of care for 
any home health patient, regardless of clinical group, as outlined in 
the skilled service requirements at Sec.  409.44, when therapy is 
deemed reasonable and necessary. Although the principal diagnosis is a 
contributing factor in the PDGM and determines the clinical group, it 
is not the only consideration in determining what home health services 
are needed in a patient's plan of care. It is the responsibility of the 
patient's treating physician to determine if and what type of therapy 
the patient needs regardless of clinical grouping. In accordance with 
Sec.  409.44(c)(1)(i), the therapy goals must be established by a 
qualified therapist in conjunction with the physician when determining 
the plan of care. As such, therapy may likely be included in the plan 
of care for a patient in any of the six clinical groupings. Any therapy 
indicated in the plan of care is expected to meet the requirements 
outlined in Sec.  409.44, which states that all therapy services must 
relate directly and specifically to a treatment regimen (established by 
the physician, after any needed consultation with the qualified 
therapist). Additional requirements dictate that the amount, frequency, 
and duration of the services must be reasonable and necessary, as 
determined by a qualified therapist and/or physician, using accepted 
standards of clinical practice. One goal in developing the PDGM is to 
provide an appropriate payment based on the identified resource use of 
different patient groups, not to encourage, discourage, value, or 
devalue one type of skilled care over another.
    Likewise, for patients requiring two or three home health 
disciplines, the PDGM takes into account the functional level and 
comorbidities of the patient after the primary reason for the period is 
captured by the clinical grouping. Decreasing functional status, as 
indicated by a specific set of OASIS items, and the presence of certain 
comorbid conditions, is associated with increased resource use. Here is 
where, when combined with the clinical grouping, any multi-disciplinary 
therapy patients would be captured. For instance, a patient grouped 
into the Neuro-Rehabilitation clinical grouping with a high Functional 
Level (meaning high functional impairment) indicates increased therapy 
needs, potentially utilizing all skilled therapy disciplines. 
Additionally, the comorbidity adjustment further case mixes the period 
and increases payment to capture the additional resource use for a 
patient regardless of whether the services are skilled nursing or 
therapy based. Therefore, a patient with complex needs, including 
multiple therapy disciplines and medical management, is captured by the 
combination of the different levels of the PDGM. Furthermore, the 
current case-mix adjustment methodology does not differentiate between 
utilization of therapy disciplines and whether or not all three are 
utilized for the same patient. We have determined that the PDGM's 
functional level when combined with the clinical grouping and 
comorbidity adjustment actually provides a much clearer picture of the 
patient's needs, particularly in relation to therapy services.
    Comments on the CY 2018 HH PPS proposed rule and at the 2018 TEP 
indicated that diagnosis does not always correlate with need and that 
impairments and functional limitations are better predictors of therapy 
services. Additionally, some commenters stated that clinicians are more 
likely to focus on impairments and functional limitations when 
conceptualizing overall patient care, and suggested using them as the 
basis for the clinical groups rather than diagnosis codes. We do agree 
that diagnosis alone does not

[[Page 32402]]

provide the entire clinical picture of the home health patient; 
however, in the same way the clinical group is one aspect of the PDGM, 
therapy services are only one aspect of home health. In fact, the 
multidisciplinary nature of the benefit is precisely the reason that 
diagnosis should be an important aspect of the clinical groupings 
model. The various home health disciplines have different but 
overlapping roles in treating the patient; however, a diagnosis is used 
across disciplines and has important implications for patient care. A 
patient's diagnosis consists of a known set of signs and symptoms 
agreed upon by the medical community. Each different healthcare 
discipline uses these identifiable signs and symptoms to apply its own 
approach and skill set to treat the patient. However, it remains a 
patient centered approach.
    Several commenters and TEP participants alike, stated that the MMTA 
clinical group is too broad and should be divided into more clinical 
groups or subgroups. One commenter questioned whether it made sense to 
assign patients to different clinical groupings if roughly 60 percent 
of 30-day periods will fall into the MMTA category. Others considered 
it an ``other'' category that was counter to the goal of clarifying the 
need for home health.
    A significant goal of the PDGM is to clearly define what types of 
services are provided in home health and accurately ascribe payment to 
resource use. Our analysis showed that there are four very broad 
categories of interventions frequently provided in the home that are 
not attributable to one specific intervention or diagnosis: Health 
teaching; guidance and counseling; case management; treatments and 
procedures; and surveillance. These categories cross the spectrum of 
diagnoses, medications, and interventions, which understandably is why 
this clinical grouping represents the majority of home health episodes. 
We believe that these four broad categories of interventions in MMTA 
cannot be underestimated in importance. We stated in the CY 2018 HH PPS 
proposed rule that many home health patients have multi-morbidity and 
polypharmacy, making education and surveillance crucial in the 
management of the home health patient in order to prevent medication 
errors and adverse effects. However, the principal diagnosis 
necessitating home care for these patients may not involve a complex 
nursing intervention, behavioral health, rehabilitation, or wound care. 
This group represents a broader, but no less important reason for home 
care. We believe MMTA is not so much an ``other'' category as much as 
it appears to represent the foundation of home health. Many commenters 
highlighted the complexity of home health patients; pointing to multi-
morbidity, ``quicker and sicker'' discharges, and polypharmacy as 
important factors in maintaining home health access. CMS agrees that 
these issues alone are important reasons for ordering home health 
services and necessitate their own clinical grouping.
    When initially developing the model, we looked at breaking MMTA 
into subgroups in order to account for differences amongst diagnoses 
within the broader category of this group. We found that the variation 
in resource use was similar across those subgroups and determined 
separating diagnoses further would only serve to make the model more 
complex and without significant variations in case-mix. However, in 
response to public comments and the discussion at the 2018 TEP,\20\ we 
performed further analysis on the division of MMTA into subgroups in 
order to estimate the payment regression if these groups were separated 
from MMTA. We conducted a thorough review of all the diagnosis codes 
grouped into MMTA. We then grouped the codes into subgroups based on 
feedback from public comments, which mainly focused on cardiac, 
oncology, infectious, and respiratory diagnoses. We created the 
additional subgroups (Surgical/Procedural Aftercare, Cardiac/
Circulatory, Endocrine, GI/GU, Infectious Diseases/Neoplasms, 
Respiratory, and Other) based on data that showed above-average 
resource use for the codes in those groups, and then combined certain 
groups that had a minimal number of codes. Those results are shown in 
Table 38.
---------------------------------------------------------------------------

    \20\ https://www.cms.gov/center/provider-Type/home-Health-Agency-HHA-Center.html.

                            Table 38--Distribution of Resource Use by 30-Day Periods
                                                [MMTA subgroups]
----------------------------------------------------------------------------------------------------------------
                            Subgroup                                     N             Mean           Median
----------------------------------------------------------------------------------------------------------------
Aftercare.......................................................         304,871       $1,605.43       $1,326.03
Cardiac/Circulatory.............................................       1,594,149        1,433.02        1,121.27
Endocrine.......................................................         425,077        1,524.45        1,062.41
GI/GU...........................................................         402,322        1,414.44        1,115.29
Infectious Diseases/Neoplasms/Blood-forming Diseases............         347,755        1,400.65        1,077.58
Respiratory.....................................................         724,722        1,411.61        1,122.23
Other...........................................................       1,226,750        1,366.56        1,035.76
                                                                 -----------------------------------------------
    Total.......................................................       5,025,646        1,428.17        1,105.20
----------------------------------------------------------------------------------------------------------------

    Table 39 shows the impact each MMTA variable has on case-mix 
weight. The impact is calculated by taking the regression coefficient 
for each variable (unreported here) and dividing by the average 
resource use of the 30-day periods in the model. Model 1 shows the 
result when MMTA clinical group is not separated into subgroups. Model 
1 shows that all else equal, being in MMTA--Low Functional impairment 
causes no increase in case-mix weight (for example, a 30-day period's 
case-mix weight would be calculated with the coefficients from the 
constant of the model plus the admission source/timing of the period 
plus the comorbidity adjustment). A 30-day period in MMTA--Medium 
Functional would increase the case-mix weight by 0.1560. A 30-day 
period in MMTA--High Functional would increase the case-mix weight by 
0.2731. Model 2 shows the same information but now includes the MMTA 
subgroups. In any given functional level, many of the MMTA subgroups 
have an impact on the case-mix weight that is similar to what is found 
in Model 1. For example, a period in MMTA (Other)--Medium Functional

[[Page 32403]]

has an increase in case-mix of 0.1568 (which is very similar to the 
0.1560 value found in Model 1). There are some groups like Aftercare, 
Endocrine, and GI/GU which show different impacts than Model 1. Also, 
to a lesser extent these differences also exist for the ``Infectious 
Diseases/Neoplasms/Blood forming Diseases'' and ``Respiratory'' 
subgroups. Some of these differences are driven by periods which are 
paid using an outlier adjustment. Model 3 removes outliers and the 
corresponding results for the Endocrine subgroup are very similar to 
Model 1. Some differences (for example in Aftercare) persist; however, 
the change in case-mix weight remains similar to Model 1.

                       Table 39--Change in Case-Mix Weight Associated With MMTA Variables
----------------------------------------------------------------------------------------------------------------
                                                                      Model 1         Model 2         Model 3
                                                                 --------------------------------    (outliers
                                                                                                     excluded)
                                                                  Change in case- Change in case----------------
                                                                    mix weight      mix weight    Change in case-
                                                                                                    mix weight
----------------------------------------------------------------------------------------------------------------
Variable
    MMTA--Low Functional........................................           0.000  ..............  ..............
    MMTA--Medium Functional.....................................          0.1560  ..............  ..............
    MMTA--High Functional.......................................          0.2731  ..............  ..............
    MMTA (Other)--Low Functional................................  ..............           0.000           0.000
    MMTA (Other)--Medium Functional.............................  ..............          0.1568          0.1523
    MMTA (Other)--High Functional...............................  ..............          0.2896          0.2748
    MMTA (Aftercare)--Low Functional............................  ..............         -0.1082         -0.1196
    MMTA (Aftercare)--Medium Functional.........................  ..............          0.0798          0.0701
    MMTA (Aftercare)--High Functional...........................  ..............          0.2588          0.2491
    MMTA (Cardiac/Circulatory)--Low Functional..................  ..............         -0.0239         -0.0050
    MMTA (Cardiac/Circulatory)--Medium Functional...............  ..............          0.1371          0.1652
    MMTA (Cardiac/Circulatory)--High Functional.................  ..............          0.2737          0.2952
    MMTA (Endocrine)--Low Functional............................  ..............          0.1105          0.0282
    MMTA (Endocrine)--Medium Functional.........................  ..............          0.2859          0.1833
    MMTA (Endocrine)--High Functional...........................  ..............          0.4071          0.3086
    MMTA (GI/GU)--Low Functional................................  ..............         -0.0751         -0.0639
    MMTA (GI/GU)--Medium Functional.............................  ..............          0.0997          0.1256
    MMTA (GI/GU)--High Functional...............................  ..............          0.1992          0.2231
    MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)-- ..............         -0.0452         -0.0472
     Low Functional.............................................
    MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)-- ..............          0.1068          0.1128
     Medium Functional..........................................
    MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)-- ..............          0.2281          0.2379
     High Functional............................................
    MMTA (Respiratory)--Low Functional..........................  ..............         -0.0501         -0.0488
    MMTA (Respiratory)--Medium Functional.......................  ..............          0.1027          0.1163
    MMTA (Respiratory)--High Functional.........................  ..............          0.2241          0.2400
----------------------------------------------------------------------------------------------------------------

    The results show that the change in case-mix weight was minimal for 
the 30-day periods assigned to these subgroups compared to the case-mix 
weights without the subgroups. Additionally, the impact of other 
variables in the model (admission source/timing, comorbidity 
adjustment) on the final case-mix weights were similar whether or not 
MMTA subgroups were used.
    Overall, using the MMTA subgroup model would result in more payment 
groups but not dramatic differences in case-mix weights across those 
groups. For this reason, we are not proposing to divide the MMTA 
clinical group into subgroups and to leave them as is shown in Table 
40. However, we are soliciting comments from the public on whether 
there may be other compelling reasons why MMTA should be broken out 
into subgroups as shown in Table 38, even if the additional subgroups 
do not result in significant differences in case-mix weights across 
those subgroups. We note that we also plan continue to examine trends 
in reporting and resource utilization to determine if future changes to 
the clinical groupings are needed after implementation of the PDGM.

           Table 40--Proposed Clinical Groups Used in the PDGM
------------------------------------------------------------------------
                                       The primary reason for the home
          Clinical groups              health encounter is to provide:
------------------------------------------------------------------------
Musculoskeletal Rehabilitation....  Therapy (physical, occupational or
                                     speech) for a musculoskeletal
                                     condition.
Neuro/Stroke Rehabilitation.......  Therapy (physical, occupational or
                                     speech) for a neurological
                                     condition or stroke.
Wounds--Post-Op Wound Aftercare     Assessment, treatment & evaluation
 and Skin/Non-Surgical Wound Care.   of a surgical wound(s); assessment,
                                     treatment & evaluation of non-
                                     surgical wounds, ulcers, burns, and
                                     other lesions.
Behavioral Health Care............  Assessment, treatment & evaluation
                                     of psychiatric conditions,
                                     including substance use disorders.
Complex Nursing Interventions.....  Assessment, treatment & evaluation
                                     of complex medical & surgical
                                     conditions including IV, TPN,
                                     enteral nutrition, ventilator, and
                                     ostomies.
Medication Management, Teaching     Assessment, evaluation, teaching,
 and Assessment (MMTA).              and medication management for a
                                     variety of medical and surgical
                                     conditions not classified in one of
                                     the above listed groups.
------------------------------------------------------------------------


[[Page 32404]]

7. Functional Levels and Corresponding OASIS Items
    As part of the overall payment adjustment under an alternative 
case-mix adjustment methodology, in the CY 2018 Home Health Prospective 
Payment System proposed rule (82 FR 35317), we proposed including a 
functional level adjustment to account for the resource costs 
associated with providing home health care to those patients with 
functional impairments. Research has shown a relationship exists 
between functional status, rates of hospital readmission, and the 
overall costs of health care services.\42\ Functional status is defined 
in a number of ways, but generally, functional status reflects an 
individual's ability to carry out activities of daily living (ADLs) and 
to participate in various life situations and in society.\43\ CMS 
currently requires the collection of data on functional status in home 
health through a standardized assessment instrument: The Outcome and 
Assessment Information Set (OASIS). Under the current HH PPS, a 
functional status score is derived from the responses to those items 
and this score contributes to the overall case-mix adjustment for a 
home health episode payment.
---------------------------------------------------------------------------

    \42\ Burke, R. MD, MS, Whitfield, E. Ph.D., Hittle, D. Ph.D., 
Min, S. Ph.D., Levy, C. MD, Ph.D., Prochazka, A. MD, MS, Coleman, E. 
MD, MPH, Schwartz, R. MD, Ginde, A. (2016). ``Hospital Readmission 
From Post-Acute Care Facilities: Risk Factors, Timing, and 
Outcomes''. The Journal of Post-Acute Care and Long Term Care 
Medicine. (17), 249-255.
    \43\ Clauser, S. Ph.D., and Arlene S. Bierman, M.D., M.S. 
(2003). ``Significance of Functional Status Data for Payment and 
Quality''. Health Care Financing Review. 24(3), 1-12.
---------------------------------------------------------------------------

    Including functional status in the case-mix adjustment methodology 
allows for higher payment for those patients with higher service needs. 
As functional status is commonly used for risk adjustment in various 
payment systems, including in the current HH PPS, we proposed that the 
alternative case-mix adjustment methodology would also adjust payments 
based on responses to selected functional OASIS items that have 
demonstrated higher resource use. Therefore, we examined every OASIS 
item for potential inclusion in the alternative case-mix adjustment 
methodology including those items associated with functional status.
    Generally, worsening functional status is associated with higher 
resource use, indicating that the responses to functional OASIS items 
may be useful as adjustors to construct case-mix weights for an 
alternative case-mix adjustment methodology. However, due to the lack 
of variation in resource use across certain responses and because 
certain responses were infrequently chosen, we combined some responses 
into larger response categories to better capture the relationship 
between worsening functional status and resource use. The resulting 
combinations of responses for these OASIS items are found at Exhibit 7-
2 in the HHGM technical report, ``Overview of the Home Health Groupings 
Model,'' on the HHA Center web page.\44\
---------------------------------------------------------------------------

    \44\ https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
---------------------------------------------------------------------------

    Each OASIS item included in the final model has a positive 
relationship with resource use, meaning as functional status declines 
(as measured by a higher response category), periods have more resource 
use, on average. As such, in the CY 2018 HH PPS proposed rule, we 
proposed that the following OASIS items would be included as part of 
the functional level adjustment under an alternative case-mix 
adjustment methodology:
    <bullet> M1800: Grooming.
    <bullet> M1810: Current Ability to Dress Upper Body.
    <bullet> M1820: Current Ability to Dress Lower Body.
    <bullet> M1830: Bathing.
    <bullet> M1840: Toilet Transferring.
    <bullet> M1850: Transferring.
    <bullet> M1860: Ambulation/Locomotion.
    <bullet> M1033 Risk of Hospitalization (at least four responses 
checked, excluding responses #8, #9, and #10).\45\
---------------------------------------------------------------------------

    \45\ Exclusions of the OASIS C-1 Item M1033 include, response 
#8: ``currently reports exhaustion''; response #9: ``other risk(s) 
not listed in 1-8; response #10: None of the above.
---------------------------------------------------------------------------

    In the CY 2018 HH PPS proposed rule, we discussed how under the 
HHGM a home health period of care receives points based on each of the 
responses associated with the proposed functional OASIS items which are 
then converted into a table of points corresponding to increased 
resource use. That is, the higher the points, the higher the functional 
impairment. The sum of all of these points' results in a functional 
impairment score which is used to group home health periods into a 
functional level with similar resource use. We proposed three 
functional impairment levels of low, medium, and high with 
approximately one third of home health periods from each of the 
clinical groups within each level. This means home health periods in 
the low impairment level have responses for the proposed functional 
OASIS items that are associated with the lowest resource use on 
average. Home health periods in the high impairment level have 
responses for the proposed functional OASIS items that are associated 
with the highest resource use on average. We also proposed that the 
functional impairment level thresholds would vary between the clinical 
groups to account for the patient characteristics within each clinical 
group associated with increased resource costs affected by functional 
impairment. We provided a detailed analysis of the development of the 
functional points and the functional impairment level thresholds by 
clinical group in the HHGM technical report \46\ and in Tables 36 and 
37 in the CY 2018 HH PPS proposed rule (82 FR 35321).
---------------------------------------------------------------------------

    \46\ ``Medicare Home Health Prospective Payment System: Case-Mix 
Methodology Refinements Overview of the Home Health Groupings 
Model'' located at https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
---------------------------------------------------------------------------

    In the CY 2018 HH PPS proposed rule, we solicited comments on the 
proposed functional OASIS items, the associated points, and the 
thresholds by clinical group used to group patients into three 
functional impairment levels under the HHGM, as outlined above. The 
majority of comments received were from physical therapists, physical 
therapy assistants, occupational therapists, and national physical, 
occupational, and speech-language pathology associations. Likewise, a 
Technical Expert Panel (TEP) was convened in February 2018 to collect 
perspectives, feedback, and identify and prioritize recommendations 
from a wide variety of industry experts and patient representatives 
regarding the public comments received on the proposed HHGM. Comments 
were very similar between those received on the CY 2018 HH PPS proposed 
rule and those made by the TEP participants.
    Most commenters agreed that the level of functional impairment 
should be included as part of the overall case-mix adjustment in a 
revised case-mix model. Likewise, commenters were generally supportive 
of the OASIS items selected to be used in the functional level payment 
adjustment. Commenters noted that the role of patient characteristics 
and functional status as an indicator of resource use is a well-
established principle in rehabilitation care. Some commenters stated 
that adopting a similar component in the home health payment system 
will help to remove the incentive to provide unnecessary therapy 
services to reach higher classifications for payment but will also move 
the HH PPS toward greater consistency with other post-acute care 
prospective payment systems. Other comments received on the functional 
impairment level adjustment

[[Page 32405]]

encompassed several common themes: The effect of the IMPACT Act 
provisions on the HHGM; adequacy of the functional impairment 
thresholds and corresponding payment adjustments; potential HHA 
behavioral changes to the provision of home health services; the impact 
of the removal of therapy thresholds on HHAs; and recommendations for 
the inclusion of other OASIS items into the functional impairment level 
adjustment.
    We note that the analysis presented in the CY 2018 HH PPS proposed 
rule was based on CY 2016 home health episodes using version OASIS-C1/
ICD-10 data set, which did not include the aforementioned IMPACT Act 
functional items. To accommodate new data being collected for the Home 
Health Quality Reporting Program in support of the IMPACT Act, CMS has 
proposed to add the functional items, Section GG, ``Functional 
Abilities and Goals'', to the OASIS data set effective January 1, 2019. 
Because these GG functional items are not required to be collected on 
the OASIS until January 1, 2019, we do not have the data to determine 
the effect, if any, of these newly added items on resource costs during 
a home health period of care. However, if the alternative case-mix 
adjustment methodology, is implemented in CY 2020, we would continue to 
examine the effects of all OASIS items, including the ``GG'' functional 
items, on resource use to determine if any refinements are warranted.
    Addressing those comments regarding the use and adequacy of the 
functional impairment thresholds to adjust payment, we remind 
commenters that the structure of categorizing functional impairment 
into Low, Medium, and High levels has been part of the home health 
payment structure since the implementation of the HH PPS. The current 
HH PPS groups' scores are based on functional OASIS items with similar 
average resource use within the same functional level, with 
approximately a third of episodes classified as low functional score, a 
third of episodes are classified as medium functional score, and a 
third of episodes are classified as high functional score. Likewise, 
the PDGM groups' scores would be based on functional OASIS items with 
similar resource use and would have three levels of functional 
impairment severity: Low, medium and high. However, the three 
functional impairment thresholds vary between the clinical groups to 
account for the patient characteristics within that clinical group 
associated with increased resource costs affected by functional 
impairment. This is to further ensure that payment is more accurately 
aligned with actual patient resource needs. As such, we believe the 
more granular structure of these functional levels provides the 
information needed on functional impairment and allows greater 
flexibility for clinicians to tailor a more patient-centered home 
health plan of care to meet the individualized needs of their patients. 
As HHA-reported OASIS information determines the functional impairment 
levels, accurate reporting on the OASIS will help to ensure that the 
case-mix adjustment is in alignment with the actual level of functional 
impairment.
    Concerns regarding HHAs changing the way they provide services to 
eligible beneficiaries, specifically therapy services, should be 
mitigated by the more granular functional impairment level adjustment 
(for example, functional thresholds which vary between each of the 
clinical groups). The functional impairment level case-mix payment 
adjustment is reflective of the resource costs associated with these 
reported OASIS items and therefore ensures greater payment accuracy 
based on patient characteristics. We believe that this approach will 
help to maintain and could potentially increase access to needed 
therapy services. We remind HHAs that the provision of home health 
services should be based on patient characteristics and identified care 
needs. This could include those patients with complex and/or chronic 
care needs, or those patients requiring home health services over a 
longer period of time or for which there is no measureable or expected 
improvement.
    While the majority of commenters agreed that the elimination of 
therapy thresholds is appropriate because of the financial incentive to 
overprovide therapy services, some commenters indicated that the 
reductions in payment for therapy visits could result in a decrease in 
HHA viability and could force some HHAs to go out of business, such as 
those HHAs that provide more therapy services than nursing. We note 
that section 51001(a)(3) of the BBA of 2018 amended section 
1894(b)(4)(B) of the Act to prohibit the use of therapy thresholds as 
part of the overall case-mix adjustment for CY 2020 and subsequent 
years. Consequently, we have no regulatory discretion in this matter.
    Several commenters provided recommendations for additional OASIS 
items for inclusion to account for functional impairment. Most notably, 
commenters suggested adding OASIS items associated with cognition, 
instrumental activities of daily living (IADLs), and caregiver support. 
The current HH PPS does not use OASIS items associated with cognition, 
IADLs, or caregiver support to case-mix adjust for payment. 
Nonetheless, the relationship between cognition and functional status 
is important and well-documented in health care literature so we 
included them in our analysis because they generally have clinical 
significance based on research and standards of practice. As described 
in the CY 2018 HH PPS proposed rule and the technical report, we 
examined every single OASIS item and its effect on costs. These 
included those OASIS items associated with cognition, IADLs, and 
caregiver support. Only those OASIS items associated with higher 
resource costs were considered for inclusion in the functional level 
adjustment in the HHGM. Despite commenters' recommendations, the 
variables suggested were only minimally helpful in explaining or 
predicting resource use and most reduced the amount of actual payment. 
As such, we excluded variables associated with cognition, IADLs, and 
caregiver support because they would decrease payment for a home health 
period of care which is counter to the purpose of a case-mix adjustment 
under the HHGM. The complete analysis of all of the OASIS items can be 
found in the HHGM technical report on the HHA Center web page.\47\
---------------------------------------------------------------------------

    \47\ https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf.
---------------------------------------------------------------------------

    After careful consideration of all comments received on the 
functional level adjustment as part of an alternative case-mix 
adjustment methodology, we believe that the three PDGM functional 
impairment levels in each of the six clinical groups are designed to 
capture the level of functional impairment. We believe that the more 
granular nature of the levels of functional impairment by clinical 
group would encourage therapists to determine the appropriate services 
for their patients in accordance with identified needs rather than an 
arbitrary threshold of visits. While the functional level adjustment is 
not meant to be a direct proxy for the therapy thresholds, the PDGM has 
other case-mix variables to adjust payment for those patients requiring 
multiple therapy disciplines or those chronically ill patients with 
significant functional impairment. We believe that also accounting for 
timing, source of admission, clinical group (meaning the primary reason 
the patient requires home health services), and the presence of 
comorbidities will provide the necessary adjustments to payment to 
ensure that care needs are met based on

[[Page 32406]]

actual patient characteristics. Therefore, we continue to uphold that 
the functional impairment level adjustment is sufficient and along with 
the other case-mix adjustments, payment will better align with the 
costs of providing services.
    In summary, we are proposing that the OASIS items identified in the 
CY 2018 HH PPS proposed rule would be included as part of the 
functional impairment level payment adjustment under the proposed PDGM. 
These items are:
    <bullet> M1800: Grooming.
    <bullet> M1810: Current Ability to Dress Upper Body.
    <bullet> M1820: Current Ability to Dress Lower Body.
    <bullet> M1830: Bathing.
    <bullet> M1840: Toilet Transferring.
    <bullet> M1850: Transferring.
    <bullet> M1860: Ambulation/Locomotion.
    <bullet> M1033: Risk of Hospitalization.\48\
---------------------------------------------------------------------------

    \48\ In Version OASIS C-2 (effective 1/1/2018), three responses 
are excluded: #8:``currently reports exhaustion'', #9: ``other risks 
not listed in 1-8'', and #10: ``None of the above''.
---------------------------------------------------------------------------

    We are proposing that a home health period of care receives points 
based on each of the responses associated with the proposed functional 
OASIS items which are then converted into a table of points 
corresponding to increased resource use (See Table 41). The sum of all 
of these points results in a functional score which is used to group 
home health periods into a functional level with similar resource use. 
We are proposing three functional levels of low impairment, medium 
impairment, and high impairment with approximately one third of home 
health periods from each of the clinical groups within each functional 
impairment level (See Table 42). The CY 2018 HH PPS Proposed rule (82 
FR 35320) and the technical report posted on the HHA Center web page 
provide a more detailed explanation as to the construction of these 
functional impairment levels using the proposed OASIS items.

Table 41--Oasis Points Table for Those Items Associated With Increased Resource Use Using a Reduced Set of Oasis
                                                 Items, CY 2017
----------------------------------------------------------------------------------------------------------------
                                                                                                    Percent of
                                                                                                    periods in
                                                        Response category         Points  (2017)  2017 with this
                                                                                                     response
                                                                                                     category
----------------------------------------------------------------------------------------------------------------
M1800: Grooming...............................  1...............................               4            56.9
M1810: Current Ability to Dress Upper Body....  1...............................               6            60.0
M1820: Current Ability to Dress Lower Body....  1...............................               5            59.3
2.............................................  11..............................            20.9
M1830: Bathing................................  1...............................               3            18.0
                                                2...............................              13            53.1
                                                3...............................              21            23.6
M1840: Toilet Transferring....................  1...............................               4            32.1
M1850: Transferring...........................  1...............................               4            37.8
                                                2...............................               8            59.2
M1860: Ambulation/Locomotion..................  1...............................              11            25.2
                                                2...............................              13            52.8
                                                3...............................              25            14.8
M1033: Risk of Hospitalization................  4 or more items checked.........              11            17.8
----------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017(as of March 2, 2018).


  Table 42--Thresholds for Functional Levels by Clinical Group, CY 2017
------------------------------------------------------------------------
                                                           Points (2017
          Clinical group             Level of impairment       data)
------------------------------------------------------------------------
MMTA..............................  Low.................            0-37
                                    Medium..............           38-53
                                    High................             54+
Behavioral Health.................  Low.................            0-38
                                    Medium..............           39-53
                                    High................             54+
Complex Nursing Interventions.....  Low.................            0-36
                                    Medium..............           37-57
                                    High................             58+
Musculoskeletal Rehabilitation....  Low.................            0-39
                                    Medium..............           40-53
                                    High................             54+
Neuro Rehabilitation..............  Low.................            0-45
                                    Medium..............           46-61
                                    High................             62+
Wound.............................  Low.................            0-43
                                    Medium..............           44-63
                                    High................             64+
------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before
  December 31, 2017 (as of March 2, 2018).


[[Page 32407]]

    Table 43 shows the average resource use by clinical group and 
functional level for CY 2017:

                                     Table 43--Average Resource Use by Clinical Group and Functional Level, CY 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
                                          Mean  resource   Frequency of     Percent of     deviation of    Percentile of      Median       Percentile of
                                                use           periods         periods      resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
MMTA--Low...............................       $1,236.05       1,650,146            19.1       $1,076.20         $511.06         $907.38       $1,632.74
MMTA--Medium............................        1,487.24       1,709,484            19.8        1,162.37          628.29        1,202.12        2,020.73
MMTA--High..............................        1,667.38       1,402,299            16.3        1,274.53          719.29        1,371.99        2,265.39
Behavioral Health--Low..................          971.26          98,193             1.1          845.25          397.45          686.39        1,285.36
Behavioral Health--Medium...............        1,309.40          93,145             1.1          990.34          557.57        1,064.55        1,784.48
Behavioral Health--High.................        1,485.06          96,899             1.1        1,092.42          653.44        1,233.97        2,027.14
Complex--Low............................        1,313.78         104,504             1.2        1,194.16          553.50          953.84        1,669.45
Complex--Medium.........................        1,668.06         104,717             1.2        1,415.99          694.35        1,275.32        2,202.65
Complex--High...........................        1,771.05          97,779             1.1        1,527.71          704.28        1,336.79        2,361.61
MS Rehab--Low...........................        1,545.07         587,873             6.8        1,048.07          779.96        1,323.12        2,055.60
MS Rehab--Medium........................        1,731.15         536,444             6.2        1,111.26          931.97        1,527.46        2,293.96
MS Rehab--High..........................        1,900.89         469,117             5.4        1,243.84        1,009.66        1,672.76        2,520.57
Neuro--Low..............................        1,591.74         308,011             3.6        1,163.69          744.21        1,323.86        2,127.18
Neuro--Medium...........................        1,833.25         287,788             3.3        1,271.31          900.27        1,568.22        2,467.92
Neuro--High.............................        1,945.49         303,787             3.5        1,420.56          899.47        1,618.16        2,629.54
Wound--Low..............................        1,663.25         275,383             3.2        1,271.45          790.83        1,328.52        2,152.26
Wound--Medium...........................        1,893.35         238,063             2.8        1,370.79          927.26        1,550.78        2,475.29
Wound--High.............................        2,044.09         261,144             3.0        1,520.35          975.19        1,644.10        2,669.06
    Total...............................        1,570.68       8,624,776           100.0        1,221.38          679.12        1,272.18        2,117.47
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).

    Like the annual recalibration of the case-mix weights under the 
current HH PPS, we expect that annual recalibrations would also be made 
to the PDGM case-mix weights. If the PDGM is finalized for CY 2020, we 
will update the functional points and thresholds using the most current 
claims data available. Likewise, we would continue to analyze all of 
the components of the case-mix adjustment, including adjustment for 
functional status, and would make refinements as necessary to ensure 
that payment for home health periods are in alignment with the costs of 
providing care. We invite comments on the proposed OASIS items and the 
associated points and thresholds used to group patients into three 
functional impairment levels under the PDGM, as outlined above.
8. Comorbidity Adjustment
    The alternative case-mix adjustment methodology proposed in the CY 
2018 HH PPS proposed rule, groups home health periods based on the 
primary reason for home health care (principal diagnosis), functional 
level, admission source, and timing. To further account for differences 
in resource use based on patient characteristics, in the CY 2018 HH PPS 
proposed rule, we proposed to use the presence of comorbidities as part 
of the overall case-mix adjustment under the alternative case-mix 
adjustment methodology. Specifically, we proposed a home health 
specific list of comorbidities further refined into broader, body 
system-based categories and more granular subcategories to capture 
those conditions that affect resource costs during a home health period 
of care. The proposed comorbidities included those conditions that 
represent more than 0.1 percent of periods and had at least as high as 
the median resource use as they indicate a direct relationship between 
the comorbidity and resource utilization.
    Specifically, we proposed a list based on the principles of patient 
assessment by body systems and their associated diseases, conditions, 
and injuries to develop larger categories of conditions that identified 
clinically relevant relationships associated with increased resource 
use. The broad, body system-based categories we proposed to use to 
group comorbidities within the HHGM included the following:

<bullet> Heart Disease
<bullet> Respiratory Disease
<bullet> Circulatory Disease and Blood Disorders
<bullet> Cerebral Vascular Disease
<bullet> Gastrointestinal Disease
<bullet> Neurological Disease and Associated Conditions
<bullet> Endocrine Disease
<bullet> Neoplasms
<bullet> Genitourinary and Renal Disease
<bullet> Skin Disease
<bullet> Musculoskeletal Disease or Injury
<bullet> Behavioral Health (including Substance Use Disorders)
<bullet> Infectious Disease

    These broad categories used to group comorbidities within the 
alternative case-mix adjustment methodology were further refined by 
grouping similar diagnoses within the broad categories into 
statistically and clinically significant subcategories which would 
receive the comorbidity adjustment in the alternative case-mix 
adjustment methodology (for example, Heart Disease 1; Cerebral Vascular 
Disease 4). All of the comorbidity diagnoses grouped into the 
aforementioned categories and subcategories are posted on the Home 
Health Agency web page and listed in the HHGM technical report at the 
following link: https://www.cms.gov/Center/Provider-Type/Home-Health-
Agency-HHA-Center.html.
    We originally proposed that if a 30-day period of care had at least 
one secondary diagnosis reported on the home health claim that fell 
into one of the subcategories, that 30-day period of care would receive 
a comorbidity adjustment to account for higher costs associated with 
the comorbidity. Therefore, the payment adjustment for comorbidities 
would be predicated on the presence of one of the identified diagnoses 
within the subcategories associated with increased resource use at or 
above the median. The comorbidity adjustment amount would be the same

[[Page 32408]]

across all of the subcategories. A 30-day period of care would receive 
only one comorbidity adjustment regardless of the number of secondary 
diagnoses reported on the home health claim that fell into one of the 
subcategories associated with higher resource use. If there is no 
reported diagnosis that meets the comorbidity adjustment criteria, the 
30-day period of care would not qualify for the payment adjustment.
    We solicited comments on the proposed comorbidity adjustment in the 
CY 2018 HH PPS proposed rule, including the proposed comorbidity 
diagnoses and their associated subcategories, as part of the overall 
alternative case-mix adjustment methodology. While all commenters 
supported the inclusion of a comorbidity adjustment, most commenters 
said that a single comorbidity payment amount as part of the overall 
case-mix adjustment is insufficient to fully capture the home health 
needs and resource costs associated with the presence of comorbidities. 
Meeting the requirement of section 51001 of the BBA of 2018, a 
Technical Expert Panel (TEP) was convened in February 2018 to collect 
perspectives, feedback, and identify and prioritize recommendations 
from a wide variety of industry experts and patient representatives 
regarding the public comments received on the proposed alternative 
case-mix adjustment methodology. Comments on the comorbidity adjustment 
and suggestions for refinement to this adjustment were very similar 
between those received on the CY 2018 HH PPS proposed rule and those 
made by the TEP participants. Specifically, the majority of commenters 
stated that the presence of multiple comorbidities has more of an 
effect on home health resource use than a single comorbidity and that 
any case-mix adjustment should account for multiple comorbidities. 
There was general agreement that most home health patients have 
multiple conditions which increase the complexity of their care and 
affects the ability to care for one's self at home. Several suggested 
that CMS should let the data help determine how many comorbidity 
adjustment levels there should be and what percentage of 30-day periods 
should be in each level. Some commenters stated they preferred 
specificity and complexity over simplicity if the complexity improved 
accuracy. Others suggested including interactions between comorbidities 
in the model, specifically interactions of comorbid conditions with the 
principal diagnosis and with other comorbidities. Commenters and TEP 
members alike focused on those conditions they saw as most impactful on 
the provision of care to home health beneficiaries. These conditions 
included chronic respiratory and cardiac conditions, as well as 
psychological and diabetes-related conditions. Most encouraged CMS to 
continue to develop a system to allow for appropriate changes to be 
made over time to the list of comorbidity subcategories that would 
assign a comorbidity adjustment to a 30-day period of care.
    We agree with commenters that the relationship between 
comorbidities and resource use can be complex and that a single 
adjustment, regardless of the type or number of comorbidities, may be 
insufficient to fully capture the resource use of a varied population 
of home health beneficiaries. However, we also recognize that adjusting 
payment based on the number of reported comorbidities may encourage 
HHAs to inappropriately report comorbid conditions in order to increase 
payment, regardless of any true impact on the home health plan of care. 
Currently, OASIS instructions state that clinicians must list each 
diagnosis for which the patient is receiving home care and to enter the 
level of highest specificity as required by ICD-10 CM coding 
guidelines. These instructions state that clinicians should list 
diagnoses in the order that best reflects the seriousness of each 
condition and supports the disciplines and services provided.\49\ We 
also note that CMS currently uses interaction items as part of the HH 
PPS case-mix adjustments. In the CY 2008 HH PPS final rule (72 FR 
49772), we added secondary diagnoses and their interactions with the 
principal diagnosis as part of the clinical dimension in the overall 
case-mix adjustment. However, analysis since then has shown that 
nominal case-mix growth became an ongoing issue resulting from the 
incentive in the current HH PPS to code only those conditions 
associated with clinical points even though the data did not show an 
associated increase in resource utilization. Likewise, when we looked 
at a multi-morbidity approach to the overall case-mix adjustment to a 
home health period of care, for the CY 2018 HH PPS proposed rule our 
analysis showed that the reporting of secondary diagnoses on home 
health claims was not robust enough to support a payment adjustment 
based on the presence of multiple comorbidities. This means that the 
data did not show significant variations in resource use with an 
increase in reported comorbidities.
---------------------------------------------------------------------------

    \49\ ``Outcome and Assessment I OASIS Information Set C2 
Guidance Manual Effective January 1, 2018 accessed at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/OASIS-C2-Guidance-Manual-Effective_1_1_18.pdf.
---------------------------------------------------------------------------

    In spite of concerns of potential manipulation of coding patterns 
to increase payment due to the comorbidity adjustment, the results of 
our most recent analyses for this proposed rule show compelling 
evidence that patients with certain comorbidities and interactions of 
certain comorbid conditions (as described later in this section) have 
home health episodes with higher resource use than home health episodes 
without those comorbidities or interactions. The goal of our analyses 
was to identify those clinically and statistically significant 
comorbidities and interactions that could be used to further case-mix 
adjust a 30-day home health period of care. As a result of these 
analyses, we identified that there were certain individual comorbidity 
subgroups and interactions of the comorbidity subgroups (for example, 
having diagnoses associated with two of the comorbidity subgroups) 
which could be used as part of the comorbidity case-mix adjustment in 
the PDGM.
    To identify these relationships with resource utilization, we 
looked at all diagnoses reported on the OASIS (M1021, M1023, and M1025) 
for each 30-day period of care. These fields represent 18 different 
diagnoses which could be reported on the OASIS. In the PDGM, the 
principal diagnosis assigns each 30-day period of care into a clinical 
group which identifies the primary reason the patient requires home 
health services. During our analysis, this usually was the reported 
principal diagnosis, but in cases where the diagnosis did not link to a 
clinical group (for example, the diagnosis could not be reported as a 
principal diagnosis in accordance with ICD-10 CM coding guidelines), we 
used a secondary diagnosis to assign the 30-day period of care into a 
clinical group. Any other diagnoses, except the one used to link the 
30-day period of care into a clinical group, were considered 
comorbidities. However, if one of those comorbid diagnoses was in the 
same ICD-10 CM block of codes as the diagnosis used to place the 30-day 
period of care into a clinical group, then that comorbid diagnosis was 
excluded (for example, if the reported principal diagnosis was I63.432, 
Cerebral infarction due to embolism of left post cerebral artery, and 
the reported secondary diagnosis was I65.01, Occlusion and stenosis of 
right vertebral artery, I65.01 would be excluded as a comorbidity as 
both codes are in the same block of ICD-10

[[Page 32409]]

diagnosis codes, Cerebrovascular Diseases, and both would group into 
the Neuro clinical group if reported as the principal diagnosis). Then, 
we checked those reported comorbid diagnoses against the home health-
specific comorbidity subgroup list to see if any reported secondary 
diagnoses are listed in a subgroup (for example, if a reported 
secondary diagnosis was I50.9, Heart Failure, unspecified, this 
diagnosis is found in the Heart 11 subgroup).
    We went through the following steps to determine which individual 
comorbidity subgroups would be used as part of the comorbidity 
adjustment:
    <bullet> After dropping the comorbidity subgroups with a small 
number of 30-day periods of care (for example, those that made up fewer 
than 0.1 percent of 30-day periods of care), this left 59 different 
comorbidity subgroups.
    <bullet> Of those, there are 56 comorbidity subgroups with a p-
value less than or equal to 0.05.
    <bullet> Of those 56 subgroups, there are 22 comorbidity subgroups 
that have a positive coefficient when regressing resource use on the 
comorbidity subgroups (and the interactions as described below) and 
indicators for the clinical group, functional level, admission source, 
and timing. We determine the median coefficient of those 22 comorbidity 
subgroups to be $60.67.
    <bullet> There are 11 comorbidity subgroups with coefficients that 
are at or above the median (for example, $60.67 or above). This is a 
decrease from the 15 subgroups presented in the CY 2018 HH PPS proposed 
rule. Potential reasons for this decrease include the use of CY 2017 
data in this analysis, whereas the 2018 HH PPS proposed rule used CY 
2016 data; the combination and/or addition of comorbidity groups; and 
the inclusion of the interactions between the comorbidities.
    Those 11 individual comorbidity subgroups that are statistically 
and clinically significant for potential inclusion in the comorbidity 
case-mix adjustment are listed below in Table 44:

        Table 44--Individual Subgroups for Comorbidity Adjustment
------------------------------------------------------------------------
    Comorbidity  subgroup             Description           Coefficient
------------------------------------------------------------------------
Neuro 11.....................  Includes diabetic                  $61.23
                                retinopathy and other
                                blindness.
Neuro 10.....................  Includes diabetic                   67.98
                                neuropathies.
Circulatory 9................  Includes acute and                  86.62
                                chronic embolisms and
                                thrombosis.
Heart 11.....................  Includes heart failure...          101.57
Cerebral 4...................  Includes sequelae of               128.78
                                cerebrovascular diseases.
Neuro 5......................  Includes Parkinson's               144.99
                                Disease.
Skin 1.......................  Includes cutaneous                 174.93
                                abscess, cellulitis, and
                                lymphangitis.
Neuro 7......................  Includes hemiplegia,               204.42
                                paraplegia, and
                                quadriplegia.
Circulatory 10...............  Includes varicose veins            215.67
                                with ulceration.
Skin 3.......................  Include diseases of                365.78
                                arteries, arterioles and
                                capillaries with
                                ulceration and non-
                                pressure chronic ulcers.
Skin 4.......................  Includes stages Two-Four           484.83
                                and unstageable pressure
                                ulcers by site.
------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before
  December 31, 2017 (as of March 2, 2018).

    Next, we examined the impact of interactions between the various 
comorbidity subgroups on resource use. The following steps show how we 
identified which interactions (for example, diagnoses from two 
different comorbidity subgroups) had a clinically and statistically 
significant relationship with increased resource utilization and could 
be used for the comorbidity adjustment:
    <bullet> After dropping the combinations of comorbidity subgroups 
and interactions with a small number of 30-day periods of care (that 
is, those that made up fewer than 0.1 percent of 30-day periods of 
care), there are 343 different comorbidity subgroup interactions (for 
example, comorbidity subgroup interaction Skin 1 plus Skin 3). As 
mentioned previously, we regressed resource use on the comorbidity 
subgroups, the interactions, and indicators for the clinical group, 
functional level, admission source, and timing.
    <bullet> From that regression, we found 187 comorbidity subgroup 
interactions with a p-value less than or equal to 0.05.
    <bullet> Of those 187 comorbidity subgroup interactions, there are 
27 comorbidity subgroup interactions where the coefficient on the 
comorbidity subgroup interaction term plus the coefficients on both 
single comorbidity variables equals a value that exceeds $150. We used 
$150 as the inclusion threshold as this amount is approximately three 
times that of the median value for the individual comorbidity subgroups 
and we believe is appropriate to reflect the increased resource use 
associated with comorbidity interactions. The 27 comorbidity subgroup 
interactions that are statistically and clinically significant for 
potential inclusion in the comorbidity adjustment are listed in Table 
45.

                     Table 45--Comorbidity Subgroup Interactions for Comorbidity Adjustment
----------------------------------------------------------------------------------------------------------------
                                                                                                       Sum of
                                                                                                     interaction
   Comorbidity        Comorbidity                              Comorbidity                            term plus
    subgroup            subgroup           Description           subgroup           Description        single
   interaction                                                                                       comorbidity
                                                                                                    coefficients
----------------------------------------------------------------------------------------------------------------
1...............  Circulatory 4......  Hypertensive        Neuro 11...........  Includes diabetic        $151.98
                                        Chronic Kidney                           retinopathy and
                                        Disease.                                 other blindness.
2...............  Endocrine 3........  Diabetes with       Neuro 7............  Includes                  162.35
                                        Complications.                           hemiplegia,
                                                                                 paraplegia, and
                                                                                 quadriplegia.
3...............  Neuro 3............  Dementia in         Skin 3.............  Diseases of               190.30
                                        diseases                                 arteries,
                                        classified                               arterioles and
                                        elsewhere.                               capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
4...............  Circulatory 4......  Hypertensive        Skin 1.............  Cutaneous abscess,        193.33
                                        Chronic Kidney                           cellulitis, and
                                        Disease.                                 lymphangitis.
5...............  Cerebral 4.........  Sequelae of         Heart 11...........  Heart Failure.....        195.55
                                        Cerebrovascular
                                        Diseases.
6...............  Neuro 7............  Includes            Renal 3............  Nephrogenic               202.44
                                        hemiplegia,                              Diabetes
                                        paraplegia, and                          Insipidus.
                                        quadriplegia.
7...............  Circulatory 10.....  Includes varicose   Endocrine 3........  Diabetes with             205.52
                                        veins with                               Complications.
                                        ulceration.
8...............  Heart 11...........  Heart Failure.....  Neuro 5............  Parkinson's               212.88
                                                                                 Disease.

[[Page 32410]]

 
9...............  Heart 12...........  Other Heart         Skin 3.............  Diseases of               260.83
                                        Diseases.                                arteries,
                                                                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
10..............  Neuro 3............  Dementia in         Skin 4.............  Stages Two-Four           274.16
                                        diseases                                 and unstageable
                                        classified                               pressure ulcers
                                        elsewhere.                               by site.
11..............  Behavioral 2.......  Mood Disorders....  Skin 3.............  Diseases of               287.42
                                                                                 arteries,
                                                                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
12..............  Circulatory 10.....  Includes varicose   Heart 11...........  Heart Failure.....        292.39
                                        veins with
                                        ulceration.
13..............  Circulatory 4......  Hypertentive        Skin 3.............  Diseases of               296.70
                                        Chronic Kidney                           arteries,
                                        Disease.                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
14..............  Renal 1............  Chronic kidney      Skin 3.............  Diseases of               300.31
                                        disease and ESRD.                        arteries,
                                                                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
15..............  Respiratory 5......  COPD and Asthma...  Skin 3.............  Diseases of               306.63
                                                                                 arteries,
                                                                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
16..............  Skin 1.............  Cutaneous abscess,  Skin 3.............  Diseases of               390.47
                                        cellulitis, and                          arteries,
                                        lymphangitis.                            arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
17..............  Renal 3............  Nephrogenic         Skin 4.............  Stages Two-Four           422.34
                                        Diabetes                                 and unstageable
                                        Insipidus.                               pressure ulcers
                                                                                 by site.
18..............  Heart 11...........  Heart Failure.....  Skin 3.............  Diseases of               422.20
                                                                                 arteries,
                                                                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
19..............  Heart 12...........  Other Heart         Skin 4.............  Stages Two-Four           423.08
                                        Diseases.                                and unstageable
                                                                                 pressure ulcers
                                                                                 by site.
20..............  Respiratory 5......  COPD and Asthma...  Skin 4.............  Stages Two-Four           428.02
                                                                                 and unstageable
                                                                                 pressure ulcers
                                                                                 by site.
21..............  Circulatory 7......  Atherosclerosis...  Skin 3.............  Diseases of               432.46
                                                                                 arteries,
                                                                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
22..............  Renal 1............  Chronic kidney      Skin 4.............  Stages Two-Four           436.39
                                        disease and ESRD.                        and unstageable
                                                                                 pressure ulcers
                                                                                 by site.
23..............  Endocrine 3........  Diabetes with       Skin 4.............  Stages Two-Four           487.96
                                        Complications.                           and unstageable
                                                                                 pressure ulcers
                                                                                 by site.
24..............  Endocrine 3........  Diabetes with       Skin 3.............  Diseases of               504.54
                                        Complications.                           arteries,
                                                                                 arterioles and
                                                                                 capillaries with
                                                                                 ulceration and
                                                                                 non-pressure
                                                                                 chronic ulcers.
25..............  Circulatory 4......  Hypertensive        Skin 4.............  Stages Two-Four           509.63
                                        Chronic Kidney                           and unstageable
                                        Disease.                                 pressure ulcers
                                                                                 by site.
26..............  Heart 11...........  Heart Failure.....  Skin 4.............  Stages Two-Four           529.47
                                                                                 and unstageable
                                                                                 pressure ulcers
                                                                                 by site.
27..............  Skin 3.............  Diseases of         Skin 4.............  Stages Two-Four           750.85
                                        arteries,                                and unstageable
                                        arterioles and                           pressure ulcers
                                        capillaries with                         by site.
                                        ulceration and
                                        non-pressure
                                        chronic ulcers.
----------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).

    In order to be considered a comorbidity subgroup interaction, at 
least two reported diagnoses, must occur in the above corresponding 
combinations, as shown in Table 45. For example, one diagnosis from 
Heart 11 must be reported along with at least one diagnosis from Neuro 
5 in order to qualify for comorbidity subgroup interaction 8. In other 
words, the comorbidity subgroups are not interchangeable between the 
interaction groups (for example, reported conditions from the Renal 1 
and Respiratory 5 subgroups would not be considered an interaction for 
purposes of the comorbidity adjustment).
    For illustrative purposes, this would mean that if a 30-day period 
of care had the following secondary diagnoses reported, I50.22, chronic 
systolic (congestive) heart failure and G20, Parkinson's Disease (these 
diagnoses fall under comorbidity subgroups Heart 11 and Neuro 5 
respectively and are in the same comorbidity subgroup interaction), 
this interaction of comorbid conditions results in a higher level of 
resource use than just having a comorbid diagnosis classified in Heart 
11 or in Neuro 5. There will be an updated PDGM Grouper Tool posted on 
the HHA Center web page that HHAs can access to simulate the HIPPS code 
and case-mix weight under the PDGM.\50\ This Grouper Tool allows 
providers to fill in information, including the comorbidities, to 
determine whether a home health period of care would receive a 
comorbidity adjustment under the PDGM.
---------------------------------------------------------------------------

    \50\ https://www.cms.gov/Center/Provider-Type/Home-Health-
Agency-HHA-Center.html.
---------------------------------------------------------------------------

    The comorbidity interactions identify subgroup combinations of 
comorbidities that are associated with higher levels of resource use. 
As such, we believe that the comorbidity adjustment payment should be 
dependent on whether the 30-day period of care has an individual 
comorbidity subgroup associated with higher resource use or there is a 
comorbidity subgroup interaction resulting in higher resource use. 
Therefore, we propose to have three levels in the PDGM comorbidity 
case-mix adjustment: No Comorbidity Adjustment, Low Comorbidity 
Adjustment, and High Comorbidity Adjustment. This means that depending 
on if and which secondary diagnoses are reported, a 30-day period of 
care may receive no comorbidity adjustment (meaning, no secondary 
diagnoses exist or do not meet the criteria for a comorbidity 
adjustment), a ``low'' comorbidity adjustment, or a ``high'' 
comorbidity adjustment. We propose that home health 30-day periods of 
care can receive a comorbidity payment adjustment under the following 
circumstances:
    <bullet> Low comorbidity adjustment: There is a reported secondary 
diagnosis that falls within one of the home-health specific individual 
comorbidity subgroups, as listed in Table 44, (for example, Heart 
Disease 11, Cerebral Vascular Disease 4, etc.) associated with higher 
resource use, or;
    <bullet> High comorbidity adjustment: There are two or more 
secondary diagnoses reported that fall within the

[[Page 32411]]

same comorbidity subgroup interaction, as listed in Table 45, (for 
example, Heart 11 plus Neuro 5) that are associated with higher 
resource use.
    Under the PDGM, a 30-day period of care can receive payment for a 
low comorbidity adjustment or a high comorbidity adjustment, but not 
both. A 30-day period of care can receive only one low comorbidity 
adjustment regardless of the number of secondary diagnoses reported on 
the home health claim that fell into one of the individual comorbidity 
subgroups or one high comorbidity adjustment regardless of the number 
of comorbidity group interactions, as applicable. The low comorbidity 
adjustment amount would be the same across all 11 individual 
comorbidity subgroups. Similarly, the high comorbidity adjustment 
amount would be the same across all 27 comorbidity subgroup 
interactions. See Table 48 in section III.F.10 of this proposed rule 
for the coefficient amounts associated with both the low and high 
comorbidity adjustment, as well as for all of the case-mix variables in 
the PDGM. If a 30-day home health period of care does not have any 
reported comorbidities that fall into one of the payment adjustments 
described above, there would be no comorbidity adjustment applied. 
Table 46 illustrates the average resource use for each of the 
comorbidity levels as described in this section.

                                            Table 46--Average Resource Use by Comorbidity Adjustment, CY 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Standard          25th                            75th
                                           Mean resource   Frequency of     Percent of     deviation of    percentile of      Median       percentile of
                                                use           periods         periods      resource use    resource use    resource use    resource use
--------------------------------------------------------------------------------------------------------------------------------------------------------
No Comorbidity Adjustment...............       $1,539.92       5,402,694            62.6       $1,183.86         $673.27       $1,253.95       $2,078.68
Comorbidity Adjustment--Has at least one        1,575.12       2,721,969            31.6        1,248.71          658.77        1,262.47        2,131.92
 comorbidity from comorbidity list, no
 interaction from interaction list......
Comorbidity Adjustment--Has at least one        1,878.84         500,113             5.8        1,412.06          880.07        1,523.87        2,469.93
 interaction from interaction list......
                                         ---------------------------------------------------------------------------------------------------------------
    Total...............................        1,570.68       8,624,776           100.0        1,221.38          679.12        1,272.18        2,117.47
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).

    Changing to three comorbidity levels results in 216 possible case-
mix groups for the purposes of adjusting payment in the PDGM. While 
this is more case-mix groups than the 144 case-mix groups proposed in 
the CY 2018 HH PPS proposed rule, this change is responsive to the 
comments received regarding refinements to the comorbidity adjustment 
without being unduly complex. We believe that this method for adjusting 
payment for the presence of comorbidities is more robust, reflective of 
patient characteristics, better aligns payment with actual resource 
use, and addresses comments received from the CY 2018 HH PPS proposed 
rule and recommendations from TEP members. The comorbidity payment 
adjustment takes into account the presence of individual comorbid 
conditions, as well as the interactions between multiple comorbid 
conditions, and reflects the types of conditions most commonly seen in 
home health patients. Similar to monitoring of nominal case-mix growth 
under the current HH PPS, upon implementation of the PDGM, CMS will 
monitor the reporting of secondary diagnoses to determine whether 
adjustments to payment based on the number of reported comorbidities is 
resulting in HHAs inappropriately reporting comorbid conditions solely 
for the purpose of increased payment and appropriate program integrity 
actions will be taken.
    As mentioned previously in this section, there will be an updated 
PDGM Grouper Tool posted on the HHA Center web page which will be key 
to understanding whether a 30-day home health period of care would 
receive a no, low, or high comorbidity adjustment under the PDGM. If 
implemented, we would continue to examine the relationship of reported 
comorbidities on resource utilization and make the appropriate payment 
refinements to help ensure that payment is in alignment with the actual 
costs of providing care. We invite comments on the change to the 
comorbidity case-mix adjustment in the PDGM including the three 
comorbidity levels: No Comorbidity, Low Comorbidity, and High 
Comorbidity Adjustment. We also invite comments on the payment 
associated with the Low Comorbidity and High Comorbidity Adjustment to 
account for increased resource utilization resulting from the presence 
of certain comorbidities and comorbidity interactions.
9. Change in the Low-Utilization Payment Adjustment (LUPA) Threshold
    Currently, a 60-day episode with four or fewer visits is paid the 
national per visit amount by discipline, adjusted by the appropriate 
wage index based on the site of service of the beneficiary, instead of 
the full 60-day episode payment amount. Such payment adjustments are 
called Low Utilization Payment Adjustments (LUPAs). While the 
alternative case-mix model proposed in the CY 2018 HH PPS proposed rule 
still included LUPAs, the approach to calculating the LUPA thresholds 
needed to change due to the proposed change in the unit of payment to 
30-day periods of care from 60-day episodes. The 30-day periods of care 
have substantially more episodes with four or fewer visits than 60-day 
episodes. To create LUPA thresholds we proposed in the CY 2018 HH PPS 
proposed rule to set the LUPA threshold at the 10th percentile value of 
visits or 2, whichever is higher, for each payment group, (82 FR 
35324).
    We received comments in response to the CY 2018 HH PPS proposed 
rule on maintaining the use of a single LUPA threshold instead of 
varying the thresholds at the subgroup level. Other commenters 
expressed concern that the variable LUPA thresholds will add

[[Page 32412]]

additional administrative burden and create additional opportunity for 
error. After analyzing the data to evaluate the potential impact, we 
believe that the change to a 30-day period of care under the proposed 
PDGM from the current 60-day episode warrants variable LUPA thresholds 
depending on the payment group to which it is assigned. We believe that 
the proposed LUPA thresholds that vary based on the case-mix assignment 
for the 30-day period of care in the proposed PDGM is an improvement 
over the current 5 visit threshold that does not vary by case-mix 
assignment. This is the same approach proposed in the CY 2018 proposed 
rule where LUPA thresholds would vary by case-mix group. LUPA 
thresholds that vary by case-mix group take into account different 
resource use patterns based on beneficiaries' clinical characteristics. 
Additionally, we do not believe that the case-mix-specific LUPA 
thresholds would result in additional administrative burden as LUPA 
visits are billed the same as non-LUPA periods. Likewise, the PDGM will 
not be implemented until January 1, 2020, giving HHAs and vendors 
sufficient time to make necessary changes to their systems and to 
ensure that appropriate quality checks are in place to minimize any 
claims errors. Therefore, we propose to vary the LUPA threshold for a 
30-day period of care under the PDGM depending on the PDGM payment 
group to which it is assigned.
    We note that in the current payment system, approximately 8 percent 
of episodes are LUPAs. Under the PDGM, consistent with the CY 2018 HH 
PPS proposed rule, we propose the 10th percentile value of visits or 2 
visits, whichever is higher, in order to target approximately the same 
percentage of LUPAs (approximately 7.1 percent of 30-day periods would 
be LUPAs (assuming no behavior change)). For example, for episodes in 
the payment group corresponding to ``MMTA- Functional Level Medium--
Early Timing--Institutional Admission--No Comorbidity'' (HIPPS code 
2AB1 in Table 47), the threshold is four visits. If a home health 30-
day period of care is assigned to that particular payment group had 
three or fewer visits the HHA would be paid using the national per-
visit rates in section III.C.4 of this proposed rule instead of the 
case-mix adjusted 30-day period of care payment amount. The LUPA 
thresholds for the PDGM payment group with the corresponding HIPPS code 
is listed in Table 47.

                     Table 47--Proposed LUPA Thresholds for the Proposed PDGM Payment Groups
----------------------------------------------------------------------------------------------------------------
                                                                               Comorbidity
                                                                             adjustment (0 =    Visit threshold
           HIPPS               Clinical group and     Timing and admission   none, 1 = single   (10th percentile
                                functional level             source          comorbidity, 2 =   or 2--whichever
                                                                               interaction)        is higher)
----------------------------------------------------------------------------------------------------------------
1AA11......................  MMTA--Low.............  Early--Community.....                  0                  4
1AA21......................  MMTA--Low.............  Early--Community.....                  1                  4
1AA31......................  MMTA--Low.............  Early--Community.....                  2                  4
1AB11......................  MMTA--Medium..........  Early--Community.....                  0                  4
1AB21......................  MMTA--Medium..........  Early--Community.....                  1                  4
1AB31......................  MMTA--Medium..........  Early--Community.....                  2                  5
1AC11......................  MMTA--High............  Early--Community.....                  0                  4
1AC21......................  MMTA--High............  Early--Community.....                  1                  4
1AC31......................  MMTA--High............  Early--Community.....                  2                  4
1BA11......................  Neuro--Low............  Early--Community.....                  0                  4
1BA21......................  Neuro--Low............  Early--Community.....                  1                  5
1BA31......................  Neuro--Low............  Early--Community.....                  2                  5
1BB11......................  Neuro--Medium.........  Early--Community.....                  0                  5
1BB21......................  Neuro--Medium.........  Early--Community.....                  1                  5
1BB31......................  Neuro--Medium.........  Early--Community.....                  2                  5
1BC11......................  Neuro--High...........  Early--Community.....                  0                  4
1BC21......................  Neuro--High...........  Early--Community.....                  1                  5
1BC31......................  Neuro--High...........  Early--Community.....                  2                  5
1CA11......................  Wound--Low............  Early--Community.....                  0                  4
1CA21......................  Wound--Low............  Early--Community.....                  1                  4
1CA31......................  Wound--Low............  Early--Community.....                  2                  4
1CB11......................  Wound--Medium.........  Early--Community.....                  0                  5
1CB21......................  Wound--Medium.........  Early--Community.....                  1                  5
1CB31......................  Wound--Medium.........  Early--Community.....                  2                  5
1CC11......................  Wound--High...........  Early--Community.....                  0                  4
1CC21......................  Wound--High...........  Early--Community.....                  1                  5
1CC31......................  Wound--High...........  Early--Community.....                  2                  4
1DA11......................  Complex--Low..........  Early--Community.....                  0                  3
1DA21......................  Complex--Low..........  Early--Community.....                  1                  2
1DA31......................  Complex--Low..........  Early--Community.....                  2                  4
1DB11......................  Complex--Medium.......  Early--Community.....                  0                  3
1DB21......................  Complex--Medium.......  Early--Community.....                  1                  3
1DB31......................  Complex--Medium.......  Early--Community.....                  2                  4
1DC11......................  Complex--High.........  Early--Community.....                  0                  3
1DC21......................  Complex--High.........  Early--Community.....                  1                  3
1DC31......................  Complex--High.........  Early--Community.....                  2                  3
1EA11......................  MS Rehab--Low.........  Early--Community.....                  0                  5
1EA21......................  MS Rehab--Low.........  Early--Community.....                  1                  5
1EA31......................  MS Rehab--Low.........  Early--Community.....                  2                  5
1EB11......................  MS Rehab--Medium......  Early--Community.....                  0                  5
1EB21......................  MS Rehab--Medium......  Early--Community.....                  1                  5
1EB31......................  MS Rehab--Medium......  Early--Community.....                  2                  5

[[Page 32413]]

 
1EC11......................  MS Rehab--High........  Early--Community.....                  0                  5
1EC21......................  MS Rehab--High........  Early--Community.....                  1                  5
1EC31......................  MS Rehab--High........  Early--Community.....                  2                  5
1FA11......................  Behavioral Health--Low  Early--Community.....                  0                  3
1FA21......................  Behavioral Health--Low  Early--Community.....                  1                  3
1FA31......................  Behavioral Health--Low  Early--Community.....                  2                  3
1FB11......................  Behavioral Health--     Early--Community.....                  0                  4
                              Medium.
1FB21......................  Behavioral Health--     Early--Community.....                  1                  4
                              Medium.
1FB31......................  Behavioral Health--     Early--Community.....                  2                  4
                              Medium.
1FC11......................  Behavioral Health--     Early--Community.....                  0                  4
                              High.
1FC21......................  Behavioral Health--     Early--Community.....                  1                  4
                              High.
1FC31......................  Behavioral Health--     Early--Community.....                  2                  4
                              High.
2AA11......................  MMTA--Low.............  Early--Institutional.                  0                  3
2AA21......................  MMTA--Low.............  Early--Institutional.                  1                  4
2AA31......................  MMTA--Low.............  Early--Institutional.                  2                  4
2AB11......................  MMTA--Medium..........  Early--Institutional.                  0                  4
2AB21......................  MMTA--Medium..........  Early--Institutional.                  1                  5
2AB31......................  MMTA--Medium..........  Early--Institutional.                  2                  5
2AC11......................  MMTA--High............  Early--Institutional.                  0                  4
2AC21......................  MMTA--High............  Early--Institutional.                  1                  4
2AC31......................  MMTA--High............  Early--Institutional.                  2                  4
2BA11......................  Neuro--Low............  Early--Institutional.                  0                  5
2BA21......................  Neuro--Low............  Early--Institutional.                  1                  5
2BA31......................  Neuro--Low............  Early--Institutional.                  2                  5
2BB11......................  Neuro--Medium.........  Early--Institutional.                  0                  6
2BB21......................  Neuro--Medium.........  Early--Institutional.                  1                  6
2BB31......................  Neuro--Medium.........  Early--Institutional.                  2                  6
2BC11......................  Neuro--High...........  Early--Institutional.                  0                  5
2BC21......................  Neuro--High...........  Early--Institutional.                  1                  5
2BC31......................  Neuro--High...........  Early--Institutional.                  2                  5
2CA11......................  Wound--Low............  Early--Institutional.                  0                  4
2CA21......................  Wound--Low............  Early--Institutional.                  1                  4
2CA31......................  Wound--Low............  Early--Institutional.                  2                  4
2CB11......................  Wound--Medium.........  Early--Institutional.                  0                  5
2CB21......................  Wound--Medium.........  Early--Institutional.                  1                  5
2CB31......................  Wound--Medium.........  Early--Institutional.                  2                  5
2CC11......................  Wound--High...........  Early--Institutional.                  0                  4
2CC21......................  Wound--High...........  Early--Institutional.                  1                  5
2CC31......................  Wound--High...........  Early--Institutional.                  2                  4
2DA11......................  Complex--Low..........  Early--Institutional.                  0                  3
2DA21......................  Complex--Low..........  Early--Institutional.                  1                  3
2DA31......................  Complex--Low..........  Early--Institutional.                  2                  4
2DB11......................  Complex--Medium.......  Early--Institutional.                  0                  4
2DB21......................  Complex--Medium.......  Early--Institutional.                  1                  4
2DB31......................  Complex--Medium.......  Early--Institutional.                  2                  5
2DC11......................  Complex--High.........  Early--Institutional.                  0                  4
2DC21......................  Complex--High.........  Early--Institutional.                  1                  4
2DC31......................  Complex--High.........  Early--Institutional.                  2                  4
2EA11......................  MS Rehab--Low.........  Early--Institutional.                  0                  5
2EA21......................  MS Rehab--Low.........  Early--Institutional.                  1                  5
2EA31......................  MS Rehab--Low.........  Early--Institutional.                  2                  5
2EB11......................  MS Rehab--Medium......  Early--Institutional.                  0                  6
2EB21......................  MS Rehab--Medium......  Early--Institutional.                  1                  6
2EB31......................  MS Rehab--Medium......  Early--Institutional.                  2                  6
2EC11......................  MS Rehab--High........  Early--Institutional.                  0                  6
2EC21......................  MS Rehab--High........  Early--Institutional.                  1                  6
2EC31......................  MS Rehab--High........  Early--Institutional.                  2                  6
2FA11......................  Behavioral Health--Low  Early--Institutional.                  0                  3
2FA21......................  Behavioral Health--Low  Early--Institutional.                  1                  3
2FA31......................  Behavioral Health--Low  Early--Institutional.                  2                  4
2FB11......................  Behavioral Health--     Early--Institutional.                  0                  4
                              Medium.
2FB21......................  Behavioral Health--     Early--Institutional.                  1                  4
                              Medium.
2FB31......................  Behavioral Health--     Early--Institutional.                  2                  5
                              Medium.
2FC11......................  Behavioral Health--     Early--Institutional.                  0                  4
                              High.
2FC21......................  Behavioral Health--     Early--Institutional.                  1                  4
                              High.
2FC31......................  Behavioral Health--     Early--Institutional.                  2                  5
                              High.
3AA11......................  MMTA--Low.............  Late--Community......                  0                  2
3AA21......................  MMTA--Low.............  Late--Community......                  1                  2

[[Page 32414]]

 
3AA31......................  MMTA--Low.............  Late--Community......                  2                  3
3AB11......................  MMTA--Medium..........  Late--Community......                  0                  2
3AB21......................  MMTA--Medium..........  Late--Community......                  1                  2
3AB31......................  MMTA--Medium..........  Late--Community......                  2                  3
3AC11......................  MMTA--High............  Late--Community......                  0                  2
3AC21......................  MMTA--High............  Late--Community......                  1                  2
3AC31......................  MMTA--High............  Late--Community......                  2                  3
3BA11......................  Neuro--Low............  Late--Community......                  0                  2
3BA21......................  Neuro--Low............  Late--Community......                  1                  2
3BA31......................  Neuro--Low............  Late--Community......                  2                  2
3BB11......................  Neuro--Medium.........  Late--Community......                  0                  2
3BB21......................  Neuro--Medium.........  Late--Community......                  1                  2
3BB31......................  Neuro--Medium.........  Late--Community......                  2                  3
3BC11......................  Neuro--High...........  Late--Community......                  0                  2
3BC21......................  Neuro--High...........  Late--Community......                  1                  2
3BC31......................  Neuro--High...........  Late--Community......                  2                  2
3CA11......................  Wound--Low............  Late--Community......                  0                  2
3CA21......................  Wound--Low............  Late--Community......                  1                  3
3CA31......................  Wound--Low............  Late--Community......                  2                  3
3CB11......................  Wound--Medium.........  Late--Community......                  0                  3
3CB21......................  Wound--Medium.........  Late--Community......                  1                  3
3CB31......................  Wound--Medium.........  Late--Community......                  2                  3
3CC11......................  Wound--High...........  Late--Community......                  0                  3
3CC21......................  Wound--High...........  Late--Community......                  1                  3
3CC31......................  Wound--High...........  Late--Community......                  2                  3
3DA11......................  Complex--Low..........  Late--Community......                  0                  2
3DA21......................  Complex--Low..........  Late--Community......                  1                  2
3DA31......................  Complex--Low..........  Late--Community......                  2                  2
3DB11......................  Complex--Medium.......  Late--Community......                  0                  2
3DB21......................  Complex--Medium.......  Late--Community......                  1                  2
3DB31......................  Complex--Medium.......  Late--Community......                  2                  2
3DC11......................  Complex--High.........  Late--Community......                  0                  2
3DC21......................  Complex--High.........  Late--Community......                  1                  2
3DC31......................  Complex--High.........  Late--Community......                  2                  2
3EA11......................  MS Rehab--Low.........  Late--Community......                  0                  2
3EA21......................  MS Rehab--Low.........  Late--Community......                  1                  2
3EA31......................  MS Rehab--Low.........  Late--Community......                  2                  2
3EB11......................  MS Rehab--Medium......  Late--Community......                  0                  2
3EB21......................  MS Rehab--Medium......  Late--Community......                  1                  2
3EB31......................  MS Rehab--Medium......  Late--Community......                  2                  3
3EC11......................  MS Rehab--High........  Late--Community......                  0                  2
3EC21......................  MS Rehab--High........  Late--Community......                  1                  2
3EC31......................  MS Rehab--High........  Late--Community......                  2                  3
3FA11......................  Behavioral Health--Low  Late--Community......                  0                  2
3FA21......................  Behavioral Health--Low  Late--Community......                  1                  2
3FA31......................  Behavioral Health--Low  Late--Community......                  2                  2
3FB11......................  Behavioral Health--     Late--Community......                  0                  2
                              Medium.
3FB21......................  Behavioral Health--     Late--Community......                  1                  2
                              Medium.
3FB31......................  Behavioral Health--     Late--Community......                  2                  2
                              Medium.
3FC11......................  Behavioral Health--     Late--Community......                  0                  2
                              High.
3FC21......................  Behavioral Health--     Late--Community......                  1                  2
                              High.
3FC31......................  Behavioral Health--     Late--Community......                  2                  2
                              High.
4AA11......................  MMTA--Low.............  Late--Institutional..                  0                  3
4AA21......................  MMTA--Low.............  Late--Institutional..                  1                  3
4AA31......................  MMTA--Low.............  Late--Institutional..                  2                  3
4AB11......................  MMTA--Medium..........  Late--Institutional..                  0                  3
4AB21......................  MMTA--Medium..........  Late--Institutional..                  1                  3
4AB31......................  MMTA--Medium..........  Late--Institutional..                  2                  4
4AC11......................  MMTA--High............  Late--Institutional..                  0                  3
4AC21......................  MMTA--High............  Late--Institutional..                  1                  3
4AC31......................  MMTA--High............  Late--Institutional..                  2                  4
4BA11......................  Neuro--Low............  Late--Institutional..                  0                  3
4BA21......................  Neuro--Low............  Late--Institutional..                  1                  4
4BA31......................  Neuro--Low............  Late--Institutional..                  2                  3
4BB11......................  Neuro--Medium.........  Late--Institutional..                  0                  4
4BB21......................  Neuro--Medium.........  Late--Institutional..                  1                  4
4BB31......................  Neuro--Medium.........  Late--Institutional..                  2                  5
4BC11......................  Neuro--High...........  Late--Institutional..                  0                  4

[[Page 32415]]

 
4BC21......................  Neuro--High...........  Late--Institutional..                  1                  4
4BC31......................  Neuro--High...........  Late--Institutional..                  2                  4
4CA11......................  Wound--Low............  Late--Institutional..                  0                  3
4CA21......................  Wound--Low............  Late--Institutional..                  1                  3
4CA31......................  Wound--Low............  Late--Institutional..                  2                  3
4CB11......................  Wound--Medium.........  Late--Institutional..                  0                  4
4CB21......................  Wound--Medium.........  Late--Institutional..                  1                  4
4CB31......................  Wound--Medium.........  Late--Institutional..                  2                  4
4CC11......................  Wound--High...........  Late--Institutional..                  0                  3
4CC21......................  Wound--High...........  Late--Institutional..                  1                  4
4CC31......................  Wound--High...........  Late--Institutional..                  2                  4
4DA11......................  Complex--Low..........  Late--Institutional..                  0                  2
4DA21......................  Complex--Low..........  Late--Institutional..                  1                  3
4DA31......................  Complex--Low..........  Late--Institutional..                  2                  3
4DB11......................  Complex--Medium.......  Late--Institutional..                  0                  3
4DB21......................  Complex--Medium.......  Late--Institutional..                  1                  3
4DB31......................  Complex--Medium.......  Late--Institutional..                  2                  4
4DC11......................  Complex--High.........  Late--Institutional..                  0                  3
4DC21......................  Complex--High.........  Late--Institutional..                  1                  3
4DC31......................  Complex--High.........  Late--Institutional..                  2                  3
4EA11......................  MS Rehab--Low.........  Late--Institutional..                  0                  3
4EA21......................  MS Rehab--Low.........  Late--Institutional..                  1                  3
4EA31......................  MS Rehab--Low.........  Late--Institutional..                  2                  3
4EB11......................  MS Rehab--Medium......  Late--Institutional..                  0                  4
4EB21......................  MS Rehab--Medium......  Late--Institutional..                  1                  4
4EB31......................  MS Rehab--Medium......  Late--Institutional..                  2                  4
4EC11......................  MS Rehab--High........  Late--Institutional..                  0                  4
4EC21......................  MS Rehab--High........  Late--Institutional..                  1                  4
4EC31......................  MS Rehab--High........  Late--Institutional..                  2                  4
4FA11......................  Behavioral Health--Low  Late--Institutional..                  0                  2
4FA21......................  Behavioral Health--Low  Late--Institutional..                  1                  2
4FA31......................  Behavioral Health--Low  Late--Institutional..                  2                  2
4FB11......................  Behavioral Health--     Late--Institutional..                  0                  3
                              Medium.
4FB21......................  Behavioral Health--     Late--Institutional..                  1                  3
                              Medium.
4FB31......................  Behavioral Health--     Late--Institutional..                  2                  3
                              Medium.
4FC11......................  Behavioral Health--     Late--Institutional..                  0                  3
                              High.
4FC21......................  Behavioral Health--     Late--Institutional..                  1                  3
                              High.
4FC31......................  Behavioral Health--     Late--Institutional..                  2                  4
                              High.
----------------------------------------------------------------------------------------------------------------

    In summary, we propose to vary the LUPA threshold for a 30-day 
period of care under the PDGM depending on the PDGM payment group to 
which it is assigned. We also propose that the LUPA thresholds for each 
PDGM payment group would be re-evaluated every year based on the most 
current utilization data available. We invite public comments on the 
LUPA threshold methodology proposed for the PDGM and the associated 
regulations text changes in section III.F.13 of this proposed rule.
10. HH PPS Case-Mix Weights Under the PDGM
    Section 1895(b)(4)(B) requires the Secretary to establish 
appropriate case mix adjustment factors for home health services in a 
manner that explains a significant amount of the variation in cost 
among different units of services. In the CY 2018 HH PPS proposed rule 
(82 FR 35270), we proposed an alternative case-mix adjustment 
methodology to better align payment with patient care needs. The 
proposed alternative case-mix adjustment methodology places patients 
into meaningful payment categories based on patient characteristics 
(principal diagnosis, functional level, comorbid conditions, referral 
source and timing). We did not finalize the alternative case-mix 
adjustment methodology in the CY 2018 final rule in order to consider 
comments and feedback for any potential refinements to the model. 
Refinements were made to the comorbidity case-mix adjustment while all 
other variables remain as proposed in the CY 2018 HH PPS proposed rule 
(for example, clinical group, functional level, admission source, and 
episode timing). As outlined in previous sections of this proposed 
rule, we are again proposing an alternative case-mix adjustment 
methodology, called the PDGM, but this methodology now results in 216 
unique case-mix groups. These 216 unique case-mix payment groups are 
called Home Health Resource Groups (HHRGs). In accordance with the BBA 
of 2018, the proposed PDGM will be implemented in a budget neutral 
manner.
    To generate PDGM case-mix weights, we utilized a data file based on 
home health episodes of care, as reported in Medicare home health 
claims. The claims data provide episode-level data as well as visit-
level data. The claims also provide data on whether non-routine 
supplies (NRS) was provided during the episode and the total charges 
for NRS. We used CY 2017 home health claims data with linked OASIS 
assessment data to obtain patient characteristics. We determined the 
case-mix weight for each of the different PDGM payment groups by 
regressing

[[Page 32416]]

resource use on a series of indicator variables for each of the 
categories using a fixed effects model. The regression measures 
resource use with the Cost per Minute (CPM) + NRS approach outlined in 
section III.F.2 of this proposed rule. The model used in the PDGM 
payment regression generates outcomes that are statistically 
significant and consistent with findings.
    We received comments in response to the proposed alternative case-
mix adjustment methodology in the CY 2018 HH PPS proposed rule on the 
standards for subsequent case-mix weight recalibration (nature and 
timing). Similar to the annual recalibration of the case-mix weights 
under the current HH PPS, annual recalibration will be made to the PDGM 
case-mix weights. We will make refinements as necessary to ensure that 
payment for home health periods are in alignment with costs. We note 
that this includes a re-calculation of the proposed PDGM case-mix 
weights for CY 2020 in the CY 2020 HH PPS proposed rule using CY 2018 
home health claims data linked with OASIS assessment data. In other 
words, the table below represents the PDGM case-mix weights if we were 
to implement the PDGM in CY 2019. However, since we are proposing to 
implement the PDGM on January 1, 2020, the actual PDGM case-mix weights 
for CY 2020 will be updated in the CY 2020 HH PPS proposed rule. We 
also received a comment from MedPAC about the development of 
alternative case-mix adjustment methodology using the regression 
approach, which is a statistical estimate of the cost associated with a 
payment group instead of the actual cost. MedPAC stated that this 
approach results in estimated payments that may not equal the actual 
costs experienced by HHAs. As noted, CMS has used a regression approach 
since the inception of the HH PPS in 2000. The regression smoothens 
weights compared to a system where each payment group receives a weight 
that is based solely on the average resource use of all 30-day periods 
in a payment group compared to the overall average resource use across 
all 30 day periods. Smoothing the weights helps to see relationships 
between variables and foresee trends. In addition, using a regression 
approach to calculate case-mix weights allows CMS to use a fixed 
effects model, which will estimate the variation observed within 
individual HHAs and opposed to estimating the variation across HHAs. 
With the fixed effects, the coefficients should better estimate the 
relationship the regression variables have with resource use compared 
to not accounting for fixed effects. We continue to believe that using 
a regression approach for the calculation of the HH PPS case-mix 
weights is most appropriate.
    After best fitting the model on home health episodes from 2017 
data, we used the estimated coefficients of the model to predict the 
expected average resource use of each episode based on the five PDGM 
categories. In order to normalize the results, we have divided the 
regression predicted resource use of each episode by the overall 
average resource use of all episodes used to estimate the model in 
order to calculate the case mix weight of all episodes within a 
particular payment group, where each payment group is defined as the 
unique combination of the subgroups within the five PDGM categories 
(admission source, timing of the 30-day period, clinical grouping, 
functional level, and comorbidity adjustment). The case-mix weight is 
then used to adjust the base payment rate to determine each period's 
payment. Table 48 shows the coefficients of the payment regression used 
to generate the weights, and the coefficients divided by average 
resource use. Information can be found in section III.F.6 of this rule 
for the clinical groups, section III.F.7 of this rule for the 
functional levels, section III.F.5 for admission source, section 
III.F.4 for timing, and section III.F.8 for the comorbidity adjustment.

 Table 48--Coefficient of Payment Regression and Coefficient Divided by
               Average Resource Use for PDGM Payment Group
------------------------------------------------------------------------
                                                            Coefficient
                                                            divided by
                Variable                    Coefficient       average
                                                           resource use
------------------------------------------------------------------------
       Clinical Group and Functional Level (MMTA--Low is excluded)
------------------------------------------------------------------------
MMTA--Medium Functional.................         $237.83          0.1514
MMTA--High Functional...................          416.75          0.2653
Behavioral Health--Low Functional.......         -116.39         -0.0741
Behavioral Health--Medium Functional....          169.86          0.1081
Behavioral Health--High Functional......          309.97          0.1974
Complex--Low Functional.................          -27.39         -0.0174
Complex--Medium Functional..............          331.88          0.2113
Complex--High Functional................          476.69          0.3035
MS Rehab--Low Functional................          141.37          0.0900
MS Rehab--Medium Functional.............          338.96          0.2158
MS Rehab--High Functional...............          558.95          0.3559
Neuro--Low Functional...................          329.19          0.2096
Neuro--Medium Functional................          593.98          0.3782
Neuro--High Functional..................          711.48          0.4530
Wound--Low Functional...................          368.43          0.2346
Wound--Medium Functional................          628.37          0.4001
Wound--High Functional..................          822.84          0.5239
------------------------------------------------------------------------
         Referral Source With Timing (Community Early excluded)
------------------------------------------------------------------------
Community--Late.........................         -646.84         -0.4118
Institutional--Early....................          278.85          0.1775
Institutional--Late.....................           45.71          0.0291
------------------------------------------------------------------------

[[Page 32417]]

 
  Comorbidity Adjustment (No Comorbidity Adjustment Group is excluded)
------------------------------------------------------------------------
Comorbidity Adjustment--Has at least one           92.44          0.0589
 comorbidity from comorbidity list, no
 interaction from interaction list......
Comorbidity Adjustment--Has at least one          345.20          0.2198
 interaction from interaction list......
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 Constant...............................       $1,560.37          0.9934
Average Resource Use....................       $1,570.68  ..............
N.......................................       8,624,776  ..............
Adj. R-Squared..........................          0.2925  ..............
------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before
  December 31, 2017 (as of March 2, 2018) for which we had a linked
  OASIS assessment. LUPA episodes, outlier episodes, and episodes with
  PEP adjustments were excluded.

    Table 49 presents the case-mix weight for each HHRG in the 
regression model (Table 48). LUPA episodes, outlier episodes, and 
episodes with PEP adjustments were excluded. Please find LUPA 
information in section III.F.9 of this rule. Weights are determined by 
first calculating the predicted resource use for episodes with a 
particular combination of admission source, episode timing, clinical 
grouping, functional level, and comorbidity adjustment. This 
combination specific calculation is then divided by the average 
resource use of all the episodes that were used to estimate the 
standard 30-day payment rate, which is $1,570.68. The resulting ratio 
represents the case-mix weight for that particular combination of a 
HHRG payment group. The adjusted R-squared value for this model is 
0.2925 which is slightly higher than the adjusted R-squared value of 
0.2704 that we proposed in CY 2018 by using the CY 2016 claims data. 
The adjusted R-squared value provides a measure of how well observed 
outcomes are replicated by the model, based on the proportion of total 
variation of outcomes explained by the model.
    As noted above, there are 216 different HHRG payment groups under 
the PDGM. There are 15 HHRG payment groups that represent roughly 50.2 
percent of the total episodes. There are 61 HHRG payment groups that 
represent roughly 1.0 percent of total episodes. The HHRG payment group 
with the smallest weight has a weight of 0.5075 (community admitted, 
late, behavioral health, low functional impairment level, with no 
comorbidity adjustment). The HHRG payment group with the largest weight 
has a weight of 1.9146 (institutional admitted, early, wound, high 
functional impairment level, with interactive comorbidity adjustment).

                             Table 49--Case Mix Weights for Each HHRG Payment Group
----------------------------------------------------------------------------------------------------------------
                                Clinical group and        Timing and admission      Comorbidity     Proposed CY
           HIPPS                 functional level                source             adjustment      2019 weight
----------------------------------------------------------------------------------------------------------------
1AA11.....................  MMTA--Low................  Early--Community.........               0          0.9934
1AA21.....................  MMTA--Low................  Early--Community.........               1          1.0523
1AA31.....................  MMTA--Low................  Early--Community.........               2          1.2132
1AB11.....................  MMTA--Medium.............  Early--Community.........               0          1.1449
1AB21.....................  MMTA--Medium.............  Early--Community.........               1          1.2037
1AB31.....................  MMTA--Medium.............  Early--Community.........               2          1.3646
1AC11.....................  MMTA--High...............  Early--Community.........               0          1.2588
1AC21.....................  MMTA--High...............  Early--Community.........               1          1.3176
1AC31.....................  MMTA--High...............  Early--Community.........               2          1.4785
1BA11.....................  Neuro--Low...............  Early--Community.........               0          1.2030
1BA21.....................  Neuro--Low...............  Early--Community.........               1          1.2619
1BA31.....................  Neuro--Low...............  Early--Community.........               2          1.4228
1BB11.....................  Neuro--Medium............  Early--Community.........               0          1.3716
1BB21.....................  Neuro--Medium............  Early--Community.........               1          1.4305
1BB31.....................  Neuro--Medium............  Early--Community.........               2          1.5914
1BC11.....................  Neuro--High..............  Early--Community.........               0          1.4464
1BC21.....................  Neuro--High..............  Early--Community.........               1          1.5053
1BC31.....................  Neuro--High..............  Early--Community.........               2          1.6662
1CA11.....................  Wound--Low...............  Early--Community.........               0          1.2280
1CA21.....................  Wound--Low...............  Early--Community.........               1          1.2869
1CA31.....................  Wound--Low...............  Early--Community.........               2          1.4478
1CB11.....................  Wound--Medium............  Early--Community.........               0          1.3935
1CB21.....................  Wound--Medium............  Early--Community.........               1          1.4523
1CB31.....................  Wound--Medium............  Early--Community.........               2          1.6133
1CC11.....................  Wound--High..............  Early--Community.........               0          1.5173
1CC21.....................  Wound--High..............  Early--Community.........               1          1.5762
1CC31.....................  Wound--High..............  Early--Community.........               2          1.7371
1DA11.....................  Complex--Low.............  Early--Community.........               0          0.9760

[[Page 32418]]

 
1DA21.....................  Complex--Low.............  Early--Community.........               1          1.0348
1DA31.....................  Complex--Low.............  Early--Community.........               2          1.1958
1DB11.....................  Complex--Medium..........  Early--Community.........               0          1.2047
1DB21.....................  Complex--Medium..........  Early--Community.........               1          1.2636
1DB31.....................  Complex--Medium..........  Early--Community.........               2          1.4245
1DC11.....................  Complex--High............  Early--Community.........               0          1.2969
1DC21.....................  Complex--High............  Early--Community.........               1          1.3558
1DC31.....................  Complex--High............  Early--Community.........               2          1.5167
1EA11.....................  MS Rehab--Low............  Early--Community.........               0          1.0834
1EA21.....................  MS Rehab--Low............  Early--Community.........               1          1.1423
1EA31.....................  MS Rehab--Low............  Early--Community.........               2          1.3032
1EB11.....................  MS Rehab--Medium.........  Early--Community.........               0          1.2092
1EB21.....................  MS Rehab--Medium.........  Early--Community.........               1          1.2681
1EB31.....................  MS Rehab--Medium.........  Early--Community.........               2          1.4290
1EC11.....................  MS Rehab--High...........  Early--Community.........               0          1.3493
1EC21.....................  MS Rehab--High...........  Early--Community.........               1          1.4082
1EC31.....................  MS Rehab--High...........  Early--Community.........               2          1.5691
1FA11.....................  Behavioral Health--Low...  Early--Community.........               0          0.9193
1FA21.....................  Behavioral Health--Low...  Early--Community.........               1          0.9782
1FA31.....................  Behavioral Health--Low...  Early--Community.........               2          1.1391
1FB11.....................  Behavioral Health--Medium  Early--Community.........               0          1.1016
1FB21.....................  Behavioral Health--Medium  Early--Community.........               1          1.1604
1FB31.....................  Behavioral Health--Medium  Early--Community.........               2          1.3214
1FC11.....................  Behavioral Health--High..  Early--Community.........               0          1.1908
1FC21.....................  Behavioral Health--High..  Early--Community.........               1          1.2496
1FC31.....................  Behavioral Health--High..  Early--Community.........               2          1.4106
2AA11.....................  MMTA--Low................  Early--Institutional.....               0          1.1710
2AA21.....................  MMTA--Low................  Early--Institutional.....               1          1.2298
2AA31.....................  MMTA--Low................  Early--Institutional.....               2          1.3907
2AB11.....................  MMTA--Medium.............  Early--Institutional.....               0          1.3224
2AB21.....................  MMTA--Medium.............  Early--Institutional.....               1          1.3812
2AB31.....................  MMTA--Medium.............  Early--Institutional.....               2          1.5422
2AC11.....................  MMTA--High...............  Early--Institutional.....               0          1.4363
2AC21.....................  MMTA--High...............  Early--Institutional.....               1          1.4951
2AC31.....................  MMTA--High...............  Early--Institutional.....               2          1.6561
2BA11.....................  Neuro--Low...............  Early--Institutional.....               0          1.3805
2BA21.....................  Neuro--Low...............  Early--Institutional.....               1          1.4394
2BA31.....................  Neuro--Low...............  Early--Institutional.....               2          1.6003
2BB11.....................  Neuro--Medium............  Early--Institutional.....               0          1.5491
2BB21.....................  Neuro--Medium............  Early--Institutional.....               1          1.6080
2BB31.....................  Neuro--Medium............  Early--Institutional.....               2          1.7689
2BC11.....................  Neuro--High..............  Early--Institutional.....               0          1.6239
2BC21.....................  Neuro--High..............  Early--Institutional.....               1          1.6828
2BC31.....................  Neuro--High..............  Early--Institutional.....               2          1.8437
2CA11.....................  Wound--Low...............  Early--Institutional.....               0          1.4055
2CA21.....................  Wound--Low...............  Early--Institutional.....               1          1.4644
2CA31.....................  Wound--Low...............  Early--Institutional.....               2          1.6253
2CB11.....................  Wound--Medium............  Early--Institutional.....               0          1.5710
2CB21.....................  Wound--Medium............  Early--Institutional.....               1          1.6299
2CB31.....................  Wound--Medium............  Early--Institutional.....               2          1.7908
2CC11.....................  Wound--High..............  Early--Institutional.....               0          1.6948
2CC21.....................  Wound--High..............  Early--Institutional.....               1          1.7537
2CC31.....................  Wound--High..............  Early--Institutional.....               2          1.9146
2DA11.....................  Complex--Low.............  Early--Institutional.....               0          1.1535
2DA21.....................  Complex--Low.............  Early--Institutional.....               1          1.2124
2DA31.....................  Complex--Low.............  Early--Institutional.....               2          1.3733
2DB11.....................  Complex--Medium..........  Early--Institutional.....               0          1.3823
2DB21.....................  Complex--Medium..........  Early--Institutional.....               1          1.4411
2DB31.....................  Complex--Medium..........  Early--Institutional.....               2          1.6020
2DC11.....................  Complex--High............  Early--Institutional.....               0          1.4745
2DC21.....................  Complex--High............  Early--Institutional.....               1          1.5333
2DC31.....................  Complex--High............  Early--Institutional.....               2          1.6942
2EA11.....................  MS Rehab--Low............  Early--Institutional.....               0          1.2610
2EA21.....................  MS Rehab--Low............  Early--Institutional.....               1          1.3198
2EA31.....................  MS Rehab--Low............  Early--Institutional.....               2          1.4807
2EB11.....................  MS Rehab--Medium.........  Early--Institutional.....               0          1.3868
2EB21.....................  MS Rehab--Medium.........  Early--Institutional.....               1          1.4456
2EB31.....................  MS Rehab--Medium.........  Early--Institutional.....               2          1.6065
2EC11.....................  MS Rehab--High...........  Early--Institutional.....               0          1.5268
2EC21.....................  MS Rehab--High...........  Early--Institutional.....               1          1.5857

[[Page 32419]]

 
2EC31.....................  MS Rehab--High...........  Early--Institutional.....               2          1.7466
2FA11.....................  Behavioral Health--Low...  Early--Institutional.....               0          1.0969
2FA21.....................  Behavioral Health--Low...  Early--Institutional.....               1          1.1557
2FA31.....................  Behavioral Health--Low...  Early--Institutional.....               2          1.3166
2FB11.....................  Behavioral Health--Medium  Early--Institutional.....               0          1.2791
2FB21.....................  Behavioral Health--Medium  Early--Institutional.....               1          1.3380
2FB31.....................  Behavioral Health--Medium  Early--Institutional.....               2          1.4989
2FC11.....................  Behavioral Health--High..  Early--Institutional.....               0          1.3683
2FC21.....................  Behavioral Health--High..  Early--Institutional.....               1          1.4272
2FC31.....................  Behavioral Health--High..  Early--Institutional.....               2          1.5881
3AA11.....................  MMTA--Low................  Late--Community..........               0          0.5816
3AA21.....................  MMTA--Low................  Late--Community..........               1          0.6405
3AA31.....................  MMTA--Low................  Late--Community..........               2          0.8014
3AB11.....................  MMTA--Medium.............  Late--Community..........               0          0.7330
3AB21.....................  MMTA--Medium.............  Late--Community..........               1          0.7919
3AB31.....................  MMTA--Medium.............  Late--Community..........               2          0.9528
3AC11.....................  MMTA--High...............  Late--Community..........               0          0.8469
3AC21.....................  MMTA--High...............  Late--Community..........               1          0.9058
3AC31.....................  MMTA--High...............  Late--Community..........               2          1.0667
3BA11.....................  Neuro--Low...............  Late--Community..........               0          0.7912
3BA21.....................  Neuro--Low...............  Late--Community..........               1          0.8500
3BA31.....................  Neuro--Low...............  Late--Community..........               2          1.0110
3BB11.....................  Neuro--Medium............  Late--Community..........               0          0.9598
3BB21.....................  Neuro--Medium............  Late--Community..........               1          1.0186
3BB31.....................  Neuro--Medium............  Late--Community..........               2          1.1796
3BC11.....................  Neuro--High..............  Late--Community..........               0          1.0346
3BC21.....................  Neuro--High..............  Late--Community..........               1          1.0934
3BC31.....................  Neuro--High..............  Late--Community..........               2          1.2544
3CA11.....................  Wound--Low...............  Late--Community..........               0          0.8162
3CA21.....................  Wound--Low...............  Late--Community..........               1          0.8750
3CA31.....................  Wound--Low...............  Late--Community..........               2          1.0360
3CB11.....................  Wound--Medium............  Late--Community..........               0          0.9817
3CB21.....................  Wound--Medium............  Late--Community..........               1          1.0405
3CB31.....................  Wound--Medium............  Late--Community..........               2          1.2015
3CC11.....................  Wound--High..............  Late--Community..........               0          1.1055
3CC21.....................  Wound--High..............  Late--Community..........               1          1.1643
3CC31.....................  Wound--High..............  Late--Community..........               2          1.3253
3DA11.....................  Complex--Low.............  Late--Community..........               0          0.5642
3DA21.....................  Complex--Low.............  Late--Community..........               1          0.6230
3DA31.....................  Complex--Low.............  Late--Community..........               2          0.7840
3DB11.....................  Complex--Medium..........  Late--Community..........               0          0.7929
3DB21.....................  Complex--Medium..........  Late--Community..........               1          0.8518
3DB31.....................  Complex--Medium..........  Late--Community..........               2          1.0127
3DC11.....................  Complex--High............  Late--Community..........               0          0.8851
3DC21.....................  Complex--High............  Late--Community..........               1          0.9440
3DC31.....................  Complex--High............  Late--Community..........               2          1.1049
3EA11.....................  MS Rehab--Low............  Late--Community..........               0          0.6716
3EA21.....................  MS Rehab--Low............  Late--Community..........               1          0.7305
3EA31.....................  MS Rehab--Low............  Late--Community..........               2          0.8914
3EB11.....................  MS Rehab--Medium.........  Late--Community..........               0          0.7974
3EB21.....................  MS Rehab--Medium.........  Late--Community..........               1          0.8563
3EB31.....................  MS Rehab--Medium.........  Late--Community..........               2          1.0172
3EC11.....................  MS Rehab--High...........  Late--Community..........               0          0.9375
3EC21.....................  MS Rehab--High...........  Late--Community..........               1          0.9963
3EC31.....................  MS Rehab--High...........  Late--Community..........               2          1.1573
3FA11.....................  Behavioral Health--Low...  Late--Community..........               0          0.5075
3FA21.....................  Behavioral Health--Low...  Late--Community..........               1          0.5664
3FA31.....................  Behavioral Health--Low...  Late--Community..........               2          0.7273
3FB11.....................  Behavioral Health--Medium  Late--Community..........               0          0.6898
3FB21.....................  Behavioral Health--Medium  Late--Community..........               1          0.7486
3FB31.....................  Behavioral Health--Medium  Late--Community..........               2          0.9095
3FC11.....................  Behavioral Health--High..  Late--Community..........               0          0.7790
3FC21.....................  Behavioral Health--High..  Late--Community..........               1          0.8378
3FC31.....................  Behavioral Health--High..  Late--Community..........               2          0.9987
4AA11.....................  MMTA--Low................  Late--Institutional......               0          1.0225
4AA21.....................  MMTA--Low................  Late--Institutional......               1          1.0814
4AA31.....................  MMTA--Low................  Late--Institutional......               2          1.2423
4AB11.....................  MMTA--Medium.............  Late--Institutional......               0          1.1740
4AB21.....................  MMTA--Medium.............  Late--Institutional......               1          1.2328
4AB31.....................  MMTA--Medium.............  Late--Institutional......               2          1.3937

[[Page 32420]]

 
4AC11.....................  MMTA--High...............  Late--Institutional......               0          1.2879
4AC21.....................  MMTA--High...............  Late--Institutional......               1          1.3467
4AC31.....................  MMTA--High...............  Late--Institutional......               2          1.5076
4BA11.....................  Neuro--Low...............  Late--Institutional......               0          1.2321
4BA21.....................  Neuro--Low...............  Late--Institutional......               1          1.2910
4BA31.....................  Neuro--Low...............  Late--Institutional......               2          1.4519
4BB11.....................  Neuro--Medium............  Late--Institutional......               0          1.4007
4BB21.....................  Neuro--Medium............  Late--Institutional......               1          1.4595
4BB31.....................  Neuro--Medium............  Late--Institutional......               2          1.6205
4BC11.....................  Neuro--High..............  Late--Institutional......               0          1.4755
4BC21.....................  Neuro--High..............  Late--Institutional......               1          1.5344
4BC31.....................  Neuro--High..............  Late--Institutional......               2          1.6953
4CA11.....................  Wound--Low...............  Late--Institutional......               0          1.2571
4CA21.....................  Wound--Low...............  Late--Institutional......               1          1.3160
4CA31.....................  Wound--Low...............  Late--Institutional......               2          1.4769
4CB11.....................  Wound--Medium............  Late--Institutional......               0          1.4226
4CB21.....................  Wound--Medium............  Late--Institutional......               1          1.4814
4CB31.....................  Wound--Medium............  Late--Institutional......               2          1.6424
4CC11.....................  Wound--High..............  Late--Institutional......               0          1.5464
4CC21.....................  Wound--High..............  Late--Institutional......               1          1.6053
4CC31.....................  Wound--High..............  Late--Institutional......               2          1.7662
4DA11.....................  Complex--Low.............  Late--Institutional......               0          1.0051
4DA21.....................  Complex--Low.............  Late--Institutional......               1          1.0639
4DA31.....................  Complex--Low.............  Late--Institutional......               2          1.2249
4DB11.....................  Complex--Medium..........  Late--Institutional......               0          1.2338
4DB21.....................  Complex--Medium..........  Late--Institutional......               1          1.2927
4DB31.....................  Complex--Medium..........  Late--Institutional......               2          1.4536
4DC11.....................  Complex--High............  Late--Institutional......               0          1.3260
4DC21.....................  Complex--High............  Late--Institutional......               1          1.3849
4DC31.....................  Complex--High............  Late--Institutional......               2          1.5458
4EA11.....................  MS Rehab--Low............  Late--Institutional......               0          1.1125
4EA21.....................  MS Rehab--Low............  Late--Institutional......               1          1.1714
4EA31.....................  MS Rehab--Low............  Late--Institutional......               2          1.3323
4EB11.....................  MS Rehab--Medium.........  Late--Institutional......               0          1.2383
4EB21.....................  MS Rehab--Medium.........  Late--Institutional......               1          1.2972
4EB31.....................  MS Rehab--Medium.........  Late--Institutional......               2          1.4581
4EC11.....................  MS Rehab--High...........  Late--Institutional......               0          1.3784
4EC21.....................  MS Rehab--High...........  Late--Institutional......               1          1.4373
4EC31.....................  MS Rehab--High...........  Late--Institutional......               2          1.5982
4FA11.....................  Behavioral Health--Low...  Late--Institutional......               0          0.9484
4FA21.....................  Behavioral Health--Low...  Late--Institutional......               1          1.0073
4FA31.....................  Behavioral Health--Low...  Late--Institutional......               2          1.1682
4FB11.....................  Behavioral Health--Medium  Late--Institutional......               0          1.1307
4FB21.....................  Behavioral Health--Medium  Late--Institutional......               1          1.1895
4FB31.....................  Behavioral Health--Medium  Late--Institutional......               2          1.3505
4FC11.....................  Behavioral Health--High..  Late--Institutional......               0          1.2199
4FC21.....................  Behavioral Health--High..  Late--Institutional......               1          1.2787
4FC31.....................  Behavioral Health--High..  Late--Institutional......               2          1.4397
----------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 for which we had a
  linked OASIS assessment. LUPA episodes, outlier episodes, and episodes with PEP adjustments were excluded.

    In conjunction with the implementation of the PDGM, we are 
proposing to revise the frequency with which we update the HH PPS 
Grouper software used to assign the appropriate HIPPS code used for 
case-mix adjustment onto the claim. Since CY 2004 when the HH PPS moved 
from a fiscal year to a calendar year basis, we have updated the 
Grouper software twice a year. We provide an updated version of the 
Grouper software effective every October 1 in order to address ICD 
coding revisions, which are effective on October 1. We also provide an 
updated version of the HH PPS Grouper software effective on January 1 
in order to capture the new or revised HH PPS policies that become 
effective on January 1. In an effort to reduce provider burden 
associated with testing and installing two software releases, we 
propose to discontinue the October release of the HH PPS Grouper 
software and provide a single HH PPS Grouper software release effective 
January 1 of each calendar year. We propose that the January release of 
the HH PPS Grouper software would include the most recent revisions to 
the ICD coding system as well as the payment policy updates contained 
in the HH PPS final rule. Therefore, under this proposal, during the 
last quarter of each calendar year, HHAs would continue to use the ICD-
10-CM codes and reporting guidelines that they would have used for the 
first three calendar quarters. HHAs would begin using the most recent 
ICD-10-CM codes and reporting guidelines on home health claims 
beginning on January 1 of each calendar year. We are soliciting 
comments on this proposal.
    We invite comments on the proposed PDGM case-mix weights, case-mix

[[Page 32421]]

weight methodology and proposed annual recalibration of the case-mix 
weights, updates to the HH PPS Grouper software, and the associated 
regulations text changes in section III.F.13 of this proposed rule.
11. Low-Utilization Payment Adjustment (LUPA) Add-On Payments and 
Partial Payment Adjustments Under PDGM
    LUPA episodes qualify for an add-on payment in the case that the 
established episode is the first or only episode in a sequence of 
adjacent episodes. As stated in the CY 2008 HH PPS final rule, LUPA 
add-on payments are made because the national per-visit payment rates 
do not adequately account for the front-loading of costs for the first 
episode of care as the average visit lengths in these initial LUPAs are 
16 to 18 percent higher than the average visit lengths in initial non-
LUPA episodes (72 FR 49848). LUPA episodes that occur as the only 
episode or as an initial episode in a sequence of adjacent episodes are 
adjusted by applying an additional amount to the LUPA payment before 
adjusting for area wage differences. Under the PDGM, we propose that 
the LUPA add-on factors will remain the same as the current payment 
system, described in section III.C.4 of this proposed rule. We multiply 
the per-visit payment amount for the first SN, PT, or SLP visit in LUPA 
episodes that occur as the only episode or an initial episode in a 
sequence of adjacent episodes by the appropriate factor (1.8451 for SN, 
1.6700 for PT, and 1.6266 for SLP) to determine the LUPA add-on payment 
amount.
    The current partial episode payment (PEP) adjustment is a 
proportion of the episode payment and is based on the span of days 
including the start-of-care date (for example, the date of the first 
billable service) through and including the last billable service date 
under the original plan of care before the intervening event in a home 
health beneficiary's care defined as:
    <bullet> A beneficiary elected transfer, or
    <bullet> A discharge and return to home health that would warrant, 
for purposes of payment, a new OASIS assessment, physician 
certification of eligibility, and a new plan of care.
    We received comments on eliminating PEPs in response to the CY 2018 
HH PPS proposed rule. We note that the change in the unit of payment 
from 60 days to 30 days will reduce the number of instances where a PEP 
adjustment occurs. However, we believe maintaining a PEP adjustment 
policy is appropriate to ensure that Medicare is not paying twice for 
the same period of care, as the PEP is involved with patient transfers 
there is a risk of a duplicate payment error. For example, if a patient 
chooses to transfer to a different HHA during the course of a home 
health period of care, the payment is proportionally adjusted to 
reflect the length of time the beneficiary remained under the agency's 
care prior to the intervening event and ensures that Medicare is not 
paying two HHAs for the same 30-day period of care.
    In summary for 30-day periods of care, we propose that the process 
for partial payment adjustments would remain the same as the existing 
policies pertaining to partial episode payments. When a new 30-day 
period begins due to the intervening event of the beneficiary elected 
transfer or discharge and return to home health during the 30-day 
episode, the original 30-day period would be proportionally adjusted to 
reflect the length of time the beneficiary remained under the agency's 
care prior to the intervening event. The proportional payment is the 
partial payment adjustment. The partial payment adjustment is 
calculated by using the span of days (first billable service date 
through and including the last billable service date) under the 
original plan of care as a proportion of 30. The proportion is 
multiplied by the original case-mix and wage index 30-day payment.
12. Payments for High-Cost Outliers Under the PDGM
    As described in section III.E of this proposed rule, section 
1895(b)(5) of the Act allows for the provision of an addition or 
adjustment to the home health payment amount in the case of outliers 
because of unusual variations in the type or amount of medically 
necessary care. The history of and current methodology for payment of 
high-cost outliers under the HH PPS is described in detail in section 
III.E of this proposed rule. In the CY 2018 HH PPS proposed rule (82 FR 
35270), we proposed that we would maintain the current methodology for 
payment of high-cost outliers upon implementation of a 30-day unit of 
payment and that we would calculate payment for high-cost outliers 
based upon 30-day periods of care.
    Commenters expressed concerns regarding the outlier policy proposed 
in the CY 2018 HH PPS proposed rule and the potential for more 
providers to exceed the 10 percent outlier cap under a 30-day period of 
care. Commenters also suggested modification to the 8-hour cap on the 
amount of time per day that is permitted to be counted toward the 
estimation of an episode's costs for outlier calculation purposes.
    While we appreciate commenters' feedback regarding the proposed 
outlier payment policy described in the CY 2018 HH PPS proposed rule, 
we are proposing to maintain the existing outlier policy under the 
proposed PDGM, except that outlier payments would be determined on a 
30-day basis to align with the 30-day unit of payment under the 
proposed PDGM. We believe that maintaining the existing outlier policy 
and applying such policy to 30-day periods of care would ensure a 
smooth transition within the framework of the proposed PDGM. We plan to 
closely evaluate and model projected outlier payments within the 
framework of the PDGM and consider modifications to the outlier policy 
as appropriate. The requirement that the total amount of outlier 
payments not exceed 2.5 percent of total home health payments as well 
as the 10 percent cap on outlier payments at the home health agency 
level are statutory requirements, as described in section 1895(b)(5) of 
the Act. Therefore, we do not have the authority to adjust or eliminate 
the 10-percent cap or increase the 2.5 percent maximum outlier payment 
amount.
    Regarding the 8-hour limit on the amount of time per day counted 
toward the estimation of an episode's costs, as noted in the CY2017 HH 
PPS final rule (81 FR 76729), where a patient is eligible for coverage 
of home health services, Medicare statute limits the amount of part-
time or intermittent home health aide services and skilled nursing 
services covered during a home health episode. Section 1861(m)(7)(B) of 
the Act states that the term `` `part-time or intermittent services' 
means skilled nursing and home health aide services furnished any 
number of days per week as long as they are furnished (combined) less 
than 8 hours each day and 28 or fewer hours each week (or, subject to 
review on a case-by-case basis as to the need for care, less than 8 
hours each day and 35 or fewer hours per week).'' Therefore, the daily 
and weekly cap on the amount of skilled nursing and home health aide 
services combined is a limit defined within the statute. As we further 
noted in the CY 2018 HH PPS final rule (81 FR 76729), because outlier 
payments are predominately driven by the provision of skilled nursing 
services, the 8-hour daily cap on services aligns with the statute, 
which requires that skilled nursing and home health aide services 
combined be furnished less than 8 hours each day. Therefore, we believe 
that maintaining the 8-hour per day cap is appropriate under the 
proposed PDGM.

[[Page 32422]]

    Simulating payments using preliminary CY 2017 claims data and the 
CY 2019 payment rates, we estimate that outlier payments under the 
proposed PDGM with 30-day periods of care would comprise approximately 
4.77 percent of total HH PPS payments in CY 2019. Given the statutory 
requirement to target up to, but no more than, 2.5 percent of total 
payments as outlier payments, we currently estimate that the FDL ratio 
under the proposed PDGM would need to change from 0.55 to 0.71. 
However, given the proposed implementation of the PDGM for 30-day 
periods of care beginning on or after January 1, 2020, we will update 
our estimate of outlier payments as a percent of total HH PPS payments 
using the most current and complete utilization data available at the 
time of CY 2020 rate-setting.
    We invite public comments on maintaining the current outlier 
payment methodology outlined in section III.E of this proposed rule for 
the proposed PDGM and the associated changes in the regulations text as 
described in section III.F.13 of this proposed rule.
13. Conforming Regulations Text Revisions for the Implementation of the 
PDGM in CY 2020
    We are proposing to make a number of revisions to the regulations 
to implement the PDGM for episodes beginning on or after January 1, 
2020, as outlined in sections III.F.1 through III.F.12 of this proposed 
rule. We propose to make conforming changes in Sec.  409.43 and part 
484 Subpart E to revise the unit of service from a 60-day episode to a 
30-day period. In addition, we are proposing to restructure Sec.  
484.205. These revisions would be effective on January 1, 2020. 
Specifically, we propose to:
    <bullet> Revise Sec.  409.43, which outlines plan of care 
requirements. We propose to revise several paragraphs to phase out the 
unit of service from a 60-day episode for claims beginning on or before 
December 31, 2019, and to implement a 30-day period as the new unit of 
service for claims beginning on or after January 1, 2020 under the 
PDGM. We propose to move and revise paragraph (c)(2) to Sec.  484.205 
as paragraph (c)(2) aligns more closely with the regulations addressing 
the basis of payment.
    <bullet> Revise the definitions of rural area and urban area in 
Sec.  484.202 to remove ``with respect to home health episodes ending 
on or after January 1, 2006'' from each definition as this verbiage is 
no longer necessary.
    <bullet> Restructure Sec.  484.205 to provide more logical 
organization and revise to account for the change in the unit of 
payment under the HH PPS for CY 2020. The PDGM uses 30-day periods 
rather than the 60-day episode used in the current payment system. 
Therefore, we propose to revise Sec.  484.205 to remove references to 
``60-day episode'' and to refer more generally to the ``national, 
standardized prospective payment''. We are also proposing revisions to 
Sec.  484.205 as follows:
    ++ Add paragraphs to paragraph (b) to define the unit of payment.
    ++ Move language which addresses the requirement for OASIS 
submission from Sec.  484.210 and insert it into Sec.  484.205 as new 
paragraph (c).
    ++ Move paragraph (c)(2) from Sec.  409.43 to Sec.  484.205 as new 
paragraph (g) in order to better align with the regulations detailing 
the basis of payment.
    ++ Add paragraph (h) to discuss split percentage payments under the 
current model and the proposed PDGM.
    We are not proposing to change the requirements or policies 
relating to durable medical equipment or furnishing negative pressure 
wound therapy using a disposable device.
    <bullet> Remove Sec.  484.210 which discusses data used for the 
calculation of the national prospective 60-day episode payment as we 
believe that this information is duplicative and already incorporated 
in other sections of part 484, subpart E.
    <bullet> Revise the section heading of Sec.  484.215 from ``Initial 
establishment of the calculation of the national 60-day episode 
payment'' to ``Initial establishment of the calculation of the 
national, standardized prospective 60-day episode payment and 30-day 
payment rates.'' Also, we propose to add paragraph (f) to this section 
to describe how the national, standardized prospective 60-day episode 
payment rate is converted into a national, standardized prospective 30-
day period payment and when it applies.
    <bullet> Revise the section heading of Sec.  484.220 from 
``Calculation of the adjusted national prospective 60-day episode 
payment rate for case-mix and area wage levels'' to ``Calculation of 
the case-mix and wage area adjusted prospective payment rates.'' We 
propose to remove the reference to ``national 60-day episode payment 
rate'' and replace it with ``national, standardized prospective 
payment''.
    <bullet> Revise the section heading in Sec.  484.225 from ``Annual 
update of the unadjusted national prospective 60-day episode payment 
rate'' to ``Annual update of the unadjusted national, standardized 
prospective 60-day episode and 30-day payment rates''. Also, we propose 
to revise Sec.  484.225 to remove references to ``60-day episode'' and 
to refer more generally to the ``national, standardized prospective 
payment''. In addition, we propose to add paragraph (d) to describe the 
annual update for CY 2020 and subsequent calendar years.
    <bullet> Revise the section heading of Sec.  484.230 from 
``Methodology used for the calculation of low-utilization payment 
adjustment'' to ``Low utilization payment adjustment''. Also, we 
propose to designate the current text to paragraph (a) and insert 
language such that proposed paragraph (a) applies to claims beginning 
on or before December 31, 2019, using the current payment system. We 
propose to add paragraph (b) to describe how low utilization payment 
adjustments are determined for claims beginning on or after January 1, 
2020, using the proposed PDGM.
    <bullet> Revise the section heading of Sec.  484.235 from 
``Methodology used for the calculation of partial episode payment 
adjustments'' to ``Partial payment adjustments''. We propose to remove 
paragraphs (a), (b), and (c). We propose to remove paragraphs (1), (2), 
and (3) which describe partial payment adjustments from paragraph (d) 
in Sec.  484.205 and incorporate them into Sec.  484.235. We propose to 
add paragraph (a) to describe partial payment adjustments under the 
current system, that is, for claims beginning on or before December 31, 
2019, and paragraph (b) to describe partial payment adjustments under 
the proposed PDGM, that is, for claims beginning on or after January 1, 
2020.
    <bullet> Revise the section heading for Sec.  484.240 from 
``Methodology used for the calculation of the outlier payment'' to 
``Outlier payments.'' In addition, we propose to remove language at 
paragraph (b) and append it to paragraph (a). We propose to add 
language to proposed revised paragraph (a) such that paragraph (a) will 
apply to payments under the current system, that is, for claims 
beginning on or before December 31, 2019. We propose to revise 
paragraph (b) to describe payments under the proposed PDGM, that is, 
for claims beginning on or after January 1, 2020. In paragraph (c), we 
propose to replace the ``estimated'' cost with ``imputed'' cost. 
Lastly, we propose to revise paragraph (d) to reflect the per-15 minute 
unit approach to imputing the cost for each claim.
    We are soliciting comments on the proposed PDGM as outlined in 
sections III.F.1 through III.F.12 and the associated regulations text 
changes

[[Page 32423]]

described above and in section IX of this proposed rule.

G. Proposed Changes Regarding Certifying and Recertifying Patient 
Eligibility for Medicare Home Health Services

1. Background
    Sections 1814(a) and 1835(a) of the Act require that a physician 
certify patient eligibility for home health services (and recertify, 
where such services are furnished over a period of time). The 
certifying physician is responsible for determining whether the patient 
meets the eligibility criteria (that is, homebound status and need for 
skilled services) and for understanding the current clinical needs of 
the patient such that the physician can establish an effective plan of 
care. In addition, as a condition for payment, section 6407 of the 
Affordable Care Act amended sections 1814(a)(2)(C) and 1835(a)(2)(A) of 
the Act requiring, as part of the certification for home health 
services, that prior to certifying a patient's eligibility for the 
Medicare home health benefit the certifying physician must document 
that the physician himself or herself or an allowed non-physician 
practitioner had a face-to-face encounter with the patient. The 
regulations at 42 CFR 424.22(a) and (b) set forth the requirements for 
certification and recertification of eligibility for home health 
services. The regulations at Sec.  424.22(c) provide the supporting 
documentation requirements used as the basis for determining patient 
eligibility for Medicare home health services.
2. Current Supporting Documentation Requirements
    In determining whether the patient is or was eligible to receive 
services under the Medicare home health benefit at the start of care, 
as of January 1, 2015, we require documentation in the certifying 
physician's medical records and/or the acute/post-acute care facility's 
medical records (if the patient was directly admitted to home health) 
to be used as the basis for certification of home health eligibility as 
described at Sec.  424.22(c). Specifically, the certifying physician 
and/or the acute/post-acute care facility medical record (if the 
patient was directly admitted to home health) for the patient must 
contain information that justifies the referral for Medicare home 
health services. This includes documentation that substantiates the 
patient's:
    <bullet> Need for the skilled services; and
    <bullet> Homebound status;
    Likewise, the certifying physician and/or the acute/post-acute care 
facility medical record (if the patient was directly admitted to home 
health) for the patient must contain the actual clinical note for the 
face-to-face encounter visit that demonstrates that the encounter:
    <bullet> Occurred within the required timeframe,
    <bullet> Was related to the primary reason the patient requires 
home health services; and
    <bullet> Was performed by an allowed provider type.
    This information can be found most often in clinical and progress 
notes and discharge summaries. While the face-to-face encounter must be 
related to the primary reason for home health services, the patient's 
skilled need and homebound status can be substantiated through an 
examination of all submitted medical record documentation from the 
certifying physician, acute/post-acute care facility, and/or HHA (if 
certain requirements are met). The synthesis of progress notes, 
diagnostic findings, medications, and nursing notes, help to create a 
longitudinal clinical picture of the patient's health status to make 
the determination that the patient is eligible for home health 
services. HHAs must obtain as much documentation from the certifying 
physician's medical records and/or the acute/post-acute care facility's 
medical records (if the patient was directly admitted to home health) 
as they deem necessary to assure themselves that the Medicare home 
health patient eligibility criteria have been met. HHAs must be able to 
provide it to CMS and its review entities upon request. If the 
documentation used as the basis for the certification of eligibility 
(that is, the certifying physician's and/or the acute/post-acute care 
facility's medical record documentation) is not sufficient to 
demonstrate that the patient is or was eligible to receive services 
under the Medicare home health benefit, payment will not be rendered 
for home health services provided.
3. Proposed Regulations Text Changes Regarding Information Used to 
Satisfy Documentation of Medicare Eligibility for Home Health Services
    Section 51002 of the BBA of 2018 amended sections 1814(a) and 
1835(a) of the Act to provide that, effective for physician 
certifications and recertifications made on or after January 1, 2019, 
in addition to using the documentation in the medical record of the 
certifying physician or of the acute or post-acute care facility (where 
home health services were furnished to an individual who was directly 
admitted to the HHA from such facility), the Secretary may use 
documentation in the medical record of the HHA as supporting material, 
as appropriate to the case involved. We believe the BBA of 2018 
provisions are consistent with our existing policy in this area, which 
is currently reflected in sub-regulatory guidance in the Medicare 
Benefit Policy Manual (Pub.100-02, chapter 7, section 30.5.1.2) and the 
Medicare Program Integrity Manual (Pub. 100-08, chapter 6, section 
6.2.3).\51\ The sub-regulatory guidance describes the circumstances in 
which HHA documentation can be used along with the certifying physician 
and/or acute/post-acute care facility medical record to support the 
patient's homebound status and skilled need. Specifically, we state 
that information from the HHA, such as the plan of care required in 
accordance with 42 CFR 409.43 and the initial and/or comprehensive 
assessment of the patient required in accordance with 42 CFR 484.55, 
can be incorporated into the certifying physician's medical record for 
the patient and used to support the patient's homebound status and need 
for skilled care. However, this information must be corroborated by 
other medical record entries in the certifying physician's and/or the 
acute/post-acute care facility's medical record for the patient. This 
means that the appropriately incorporated HHA information, along with 
the certifying physician's and/or the acute/post-acute care facility's 
medical record, creates a clinically consistent picture that the 
patient is eligible for Medicare home health services. The certifying 
physician officially incorporates the HHA information into his/her 
medical record for the patient by signing and dating the material. Once 
incorporated, the documentation from the HHA, in conjunction with the 
certifying physician and/or acute/post-acute care facility 
documentation, must substantiate the patient's eligibility for home 
health services.
---------------------------------------------------------------------------

    \51\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c07.pdf and https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/pim83c06.pdf.
---------------------------------------------------------------------------

    While we believe the provisions in section 51002 of the BBA of 2018 
do not require a change to the current regulations because the 
provisions are consistent with existing CMS policy, we are 
discretionarily proposing to amend the regulations text at 42 CFR 
424.22(c) to align the regulations text with current sub-regulatory 
guidance to allow medical record documentation from the HHA to be used 
to support the basis for certification and/or recertification of

[[Page 32424]]

home health eligibility, if the following requirements are met:
    <bullet> The documentation from the HHA can be corroborated by 
other medical record entries in the certifying physician's and/or the 
acute/post-acute care facility's medical record for the patient, 
thereby creating a clinically consistent picture that the patient is 
eligible for Medicare home health services as specified in Sec.  424.22 
(a)(1) and (b).
    <bullet> The certifying physician signs and dates the HHA 
documentation demonstrating that the documentation from the HHA was 
considered when certifying patient eligibility for Medicare home health 
services. HHA documentation can include, but is not limited to, the 
patient's plan of care required in accordance with 42 CFR 409.43 and 
the initial and/or comprehensive assessment of the patient required in 
accordance with 42 CFR 484.55.
    We believe that this proposal incorporates existing sub-regulatory 
flexibilities into the regulations text that allow HHA medical record 
documentation to support the basis of home health eligibility. By 
incorporating the existing sub-regulatory guidance into regulation, 
HHAs are assured that HHA-generated documentation can be used as 
supporting material for the basis of home health eligibility, as long 
as all conditions are met, as described previously. HHAs have the 
discretion to determine the type and format of any documentation used 
to support home health eligibility. The expectation is that the HHA-
generated supporting medical record documentation would be used to 
support the existing medical record of the certifying physician or the 
acute/post-acute care facility to create a clinically consistent 
picture that the individual is confined to the home and requires 
skilled services. Anecdotally, we have received reports from HHAs that 
they typically include this supporting information on the plan of care. 
Generally, the certifying physician is also the physician who 
establishes the plan of care and the plan of care must be signed by the 
physician. Consequently, no additional burden is incurred by either the 
HHA or the certifying physician. As existing sub-regulatory guidance 
allows HHA-generated documentation to be used as supporting material 
for the physician's determination of eligibility for home health 
services, we expect that most HHAs already have a process in place to 
provide this information to the certifying physician or the acute/post-
acute care facility. We welcome comments on this assumption.
    We invite comments on this proposal to amend the regulations text 
at Sec.  424.22(c), which would codify subregulatory guidance allowing 
HHA-generated medical record documentation to be used as supporting 
material to the certifying physician's or the acute and/or post-acute 
care facility's medical record documentation as part of the 
certification and/or recertification of eligibility for home health 
services, under certain circumstances. The corresponding proposed 
regulations text changes can be found in section VIII. of this proposed 
rule.
4. Proposed Elimination of Recertification Requirement To Estimate How 
Much Longer Home Health Services Will Be Required
    In the CY 2018 HH PPS proposed rule (82 FR 35378), we invited 
public comments about improvements that can be made to the health care 
delivery system that reduce unnecessary burdens for clinicians, other 
providers, and patients and their families. Specifically, we asked the 
public to submit their ideas for regulatory, sub-regulatory, policy, 
practice, and procedural changes to reduce burdens for hospitals, 
physicians, and patients, improve the quality of care, decrease costs, 
and ensure that patients and their providers and physicians are making 
the best health care choices possible. We specifically stated that CMS 
would not respond to the comment submissions in the final rule. 
Instead, we would review the comments submitted in response to the 
requests for information and actively consider them as we develop 
future regulatory proposals or future sub-regulatory policy guidance.
    Several commenters requested that CMS consider eliminating the 
requirement that the certifying physician include an estimate of how 
much longer skilled services will be required at each home health 
recertification, as set forth at Sec.  424.22(b)(2) and in sub-
regulatory guidance in the Medicare Benefit Policy Manual (Chapter 7, 
Section 30.5.2). Commenters stated that this estimate is duplicative of 
the Home Health Conditions of Participation (CoP) requirements for the 
content of the home health plan of care, set out at 42 CFR 
484.60(a)(2).
    The Home Health CoP at Sec.  484.60(a)(2) sets forth the 
requirements for the content of the home health plan of care, which 
includes the types of services, supplies, and equipment required, as 
well as, the frequency and duration of visits to be made. Commenters 
stated that the plan of care requirement already includes the frequency 
and duration of visits to be made and is an estimate of how much longer 
home health services are expected to be required by the patient. They 
observed that including this information as part of the recertification 
statement is duplicative and unnecessary. Commenters went on to say 
that because the certifying physician must review, sign and date the 
plan of care at least every 60-days, he/she is attesting to how much 
longer he/she thinks the patient will require home health services. 
Commenters also stated that this estimate appears to have no value to 
the patient, the physician, the HHA, or to CMS, but failure to include 
the physician's estimate of how much longer skilled care will be 
required can result in claim denials.
    We have determined that the estimate of how much longer skilled 
care will be required at each recertification is not currently used for 
quality, payment, or program integrity purposes. Given this 
consideration and the Home Health CoP requirements for the content of 
the home health plan of care, and to mitigate any potential denials of 
home health claims that otherwise would meet all other Medicare 
requirements, we are proposing to eliminate the regulatory requirement 
as set forth at 42 CFR 424.22(b)(2), that the certifying physician, as 
part of the recertification process, provide an estimate of how much 
longer skilled services will be required. All other recertification 
content requirements under Sec.  424.22(b)(2) would remain unchanged. 
We believe the elimination of this recertification requirement would 
result in a reduction of burden for certifying physicians by reducing 
the amount of time physicians spend on the recertification process and 
would result in an overall cost savings of $14.2 million. We provided a 
more detailed description of this burden reduction in section 
VIII.C.1.c. of this proposed rule.
    We invite comments regarding the proposed elimination of the 
requirement that the certifying physician include an estimate of how 
much longer skilled services will be required at each home health 
recertification, as well as the corresponding regulations text changes 
at Sec.  424.22(b)(2).
    While we are not proposing any additional changes to the home 
health payment regulations in this proposed rule as suggested by 
commenters in the RFI, we will continue to consider whether future 
regulatory or sub-regulatory changes are warranted to reduce 
unnecessary burden. We thank

[[Page 32425]]

the commenters for taking the time to convey their thoughts and 
suggestions on this initiative.

H. Proposed Change Regarding Remote Patient Monitoring Under the 
Medicare Home Health Benefit

    Section 4012 of the 21st Century Cures Act directed the Centers for 
Medicare & Medicaid Services (CMS) to provide information on the 
current use of and/or barriers to telehealth services. This directive, 
along with advancements in technology, prompted us to examine ways in 
which HHAs can integrate telehealth and/or remote patient monitoring 
into the care planning process. Telehealth services, under section 
1834(m)(4) of the Act, include services such as professional 
consultations, office visits, pharmacologic management, and office 
psychiatry services furnished via a telecommunications system by a 
distant site physician or practitioner to a patient located at a 
designated ``originating site.'' Originating sites, as defined under 
section 1834(m)(4)(C) of the Act, generally must be certain kinds of 
healthcare settings located in certain geographic areas. This 
definition generally does not include the beneficiary's home. As a 
Medicare condition for payment, an interactive telecommunications 
system generally is required when furnishing telehealth services. 
Medicare defines ``interactive telecommunication systems'' as audio and 
video equipment permitting two-way, real-time interactive communication 
between the patient and distant site physician or practitioner (42 CFR 
410.78). Telehealth services are used to substitute for professional 
in-person visits when certain eligibility criteria are met. For 
patients receiving care under the Medicare home health benefit, section 
1895(e)(1)(A) of the Act prohibits payment for services furnished via a 
telecommunications system if such services substitute for in-person 
home health services ordered as part of a plan of care certified by a 
physician. However, the statute does not define the term 
``telecommunications system'' as it relates to the provision of home 
health care and explicitly notes that an HHA is not prevented from 
providing services via a telecommunications system, assuming the 
service is not considered a home health visit for purposes of 
eligibility or payment.
    Remote patient monitoring, while a service using a form of 
telecommunications, is not considered a Medicare telehealth service as 
defined under section 1834(m) of the Act, but rather uses ``digital 
technologies to collect medical and other forms of health data from 
individuals in one location and electronically transmit that 
information securely to health care providers in a different location 
for assessment and recommendations.'' \52\ For example, remote patient 
monitoring allows the patient to collect and transmit his or her own 
clinical data, such as weight, blood pressure, and heart rate for 
monitoring and analysis. The clinical data is monitored without a 
direct interaction between the practitioner and beneficiary, and then 
reviewed by the HHA for potential consultation with the certifying 
physician for changes in the plan of care. Additionally, because remote 
patient monitoring is not statutorily considered a telehealth service, 
it would not be subject to the restrictions on originating site and 
interactive telecommunications systems technology.
---------------------------------------------------------------------------

    \52\ http://www.cchpca.org/remote-patient-monitoring.
---------------------------------------------------------------------------

    We believe remote patient monitoring could be beneficial in 
augmenting the home health services outlined in the patient's plan of 
care, without replicating or replacing home health visits. The plan of 
care, in accordance with the home health conditions of participation 
(CoPs), must identify patient-specific measurable outcomes and goals, 
and be established, periodically reviewed, and signed by a physician 
(42 CFR 484.60(a)). The HHA must also promptly alert the relevant 
physician(s) to any changes in the patient's condition or needs that 
suggest that outcomes are not being achieved, or that the plan of care 
must be altered (42 CFR 484.60(c)). Remote patient monitoring could 
enable the HHA to more quickly identify any changes in the patient's 
clinical condition, as well as monitor patient compliance, prompting 
physician review of, and potential changes to, the plan of care, as 
required per the CoPs. Particularly in cases where the home health 
patient is admitted for skilled observation and assessment of the 
patient's condition due to a reasonable potential for complications or 
an acute episode, remote patient monitoring could augment home health 
visits until the patient's clinical condition stabilized. Fluctuating 
or abnormal vital signs could be monitored between visits, potentially 
leading to quicker interventions and updates to the treatment plan.
    A review of the literature shows that utilizing remote patient 
monitoring in chronic disease management has the potential to 
``significantly improve an individual's quality of life, allowing 
patients to maintain independence, prevent complications, and minimize 
costs.'' \53\ Specifically for patients with chronic obstructive 
pulmonary disease (COPD) and congestive heart failure (CHF), research 
indicates that remote patient monitoring has been successful in 
reducing readmissions and long-term acute care utilization.\54\ 
Likewise, a systematic review of evidence collected by the Agency for 
Healthcare Research and Quality (AHRQ) revealed that remote patient 
monitoring of chronic cardiac and respiratory conditions resulted in 
lower mortality, improved quality of life, and reductions in hospital 
admissions.\55\ If changes in condition are identified early through 
careful monitoring, serious complications may be avoided, potentially 
preventing emergency department visits and hospital admissions. 
Surveillance and case management are frequently occurring interventions 
in home health, and remote patient monitoring leverages technology to 
encourage patient involvement and accountability in order to improve 
care coordination.
---------------------------------------------------------------------------

    \53\ Rojhan, K., Laplante, S., Sloand, J., Main, C., Ibrahim, 
A., Wild, J., Sturt, N. Remote Monitoring of Chronic Diseases: A 
Landscape Assessment of Policies in Four European Countries (2016) 
PLOS One. V11 (5) https://dx.doi.org/10.1371%2Fjournal.pone.0155738.
    \54\ Broad, J., Davis, C., Bender, M., Smith, T. (2014) 
Feasibility and Acute Care Utilization Outcomes of a Post-Acute 
Transitional Telemonitoring Program for Underserved Chronic Disease 
Patients. Journal of Cardiac Failure. Vol 20 (8S) S116. http://dx.doi.org/10.1016/j.cardfail.2014.06.328.
    \55\ Department of Health and Human Services, Agency for 
Healthcare Research and Quality, Telehealth: Mapping the Evidence 
for Patient Outcomes from Systematic Reviews, Technical Brief Number 
26 (Washington, DC: June 2016).
---------------------------------------------------------------------------

    Anecdotally, we have heard from various home health agencies 
regarding integration of remote patient monitoring into the care 
planning process. For example, on a recent site visit to a home health 
agency, CMS participated in a care coordination meeting, which included 
a discussion of the agency's experience implementing remote patient 
monitoring in home health episodes. Certain patients with chronic 
conditions received tablets pre-loaded with software enabling patients 
to take and transmit their vital signs on a daily basis. The 
transmitted health data was then monitored and analyzed by an outside 
service, which contacted the HHA with any changes or abnormalities. 
This example highlights how remote patient monitoring could be 
integrated into the home health episode of care.
    Additionally, we believe that the growth of technology and new 
software development could be used in the

[[Page 32426]]

provision of care and care coordination in the home, as well as empower 
patients to be active participants in their disease management. Other 
than the statutory requirement that services furnished via a 
telecommunications system may not substitute for in-person home health 
services ordered as part of a plan of care certified by a physician, we 
do not have specific policies surrounding the use of remote patient 
monitoring by HHAs. We anticipate that HHAs would follow clinical and 
manufacturer guidelines when implementing the technology into clinical 
practice, while still meeting all statutory requirements, conditions 
for payment, and the home health conditions of participation.
    Medicare began making separate payment in CY 2018 for CPT code 
99091 that allows physicians and other healthcare professionals to bill 
for the collection and interpretation of physiologic data digitally 
stored and/or transmitted by the patient and/or caregiver to the 
physician or other qualified health care professional (82 CFR 53013). 
CPT code 99091 is paid under the Medicare physician fee schedule, and 
thus cannot be billed by HHAs. Additionally, it includes the 
interpretation of the physiologic data, whereas the HHA would only be 
responsible for the collection of the data. However, with this 
distinction, we feel the code's description accurately describes remote 
monitoring services. Therefore, we propose to define remote patient 
monitoring under the Medicare home health benefit as ``the collection 
of physiologic data (for example, ECG, blood pressure, glucose 
monitoring) digitally stored and/or transmitted by the patient and/or 
caregiver to the HHA.''
    Although the cost of remote patient monitoring is not separately 
billable under the HH PPS and may not be used as a substitute for in-
person home health services, there is nothing to preclude HHAs from 
using remote patient monitoring to augment the care planning process as 
appropriate. As such, we believe the expenses of remote patient 
monitoring, if used by the HHA to augment the care planning process, 
must be reported on the cost report as allowable administrative costs 
(that is, operating expenses) that are factored into the costs per 
visit. Currently, costs associated with remote patient monitoring are 
reported on line 23.20 on Worksheet A, as direct costs associated with 
telemedicine. For 2016, approximately 3 percent of HHAs reported 
telemedicine costs that accounted for roughly 1 percent of their total 
agency costs on the HHA cost report. However, these costs are not 
allocated to the costs per visit. We propose to amend the regulations 
at 42 CFR 409.46 to include the costs of remote patient monitoring as 
an allowable administrative cost (that is, operating expense), if 
remote patient monitoring is used by the HHA to augment the care 
planning process. This would allow HHAs to report the costs of remote 
patient monitoring on the HHA cost report as part of their operating 
expenses. These costs would then be factored into the costs per visit. 
Factoring the costs associated with remote patient monitoring into the 
costs per visit has important implications for assessing home health 
costs relevant to payment, including HHA Medicare margin calculations. 
We are soliciting comments on the proposed definition of remote patient 
monitoring under the HH PPS to describe telecommunication services used 
to augment the plan of care during a home health episode. Additionally, 
we welcome comments regarding additional utilization of 
telecommunications technologies for consideration in future rulemaking. 
We are also soliciting comments on the proposed changes to the 
regulations at 42 CFR 409.46, to include the costs of remote patient 
monitoring as allowable administrative costs (that is, operating 
expenses), as detailed in section IX. of this proposed rule.

IV. Home Health Value-Based Purchasing (HHVBP) Model

A. Background

    As authorized by section 1115A of the Act and finalized in the CY 
2016 HH PPS final rule (80 FR 68624), we began testing the HHVBP Model 
on January 1, 2016. The HHVBP Model has an overall purpose of improving 
the quality and delivery of home health care services to Medicare 
beneficiaries. The specific goals of the Model are to: (1) Provide 
incentives for better quality care with greater efficiency; (2) study 
new potential quality and efficiency measures for appropriateness in 
the home health setting; and (3) enhance the current public reporting 
process.
    Using the randomized selection methodology finalized in the CY 2016 
HH PPS final rule, we selected nine states for inclusion in the HHVBP 
Model, representing each geographic area across the nation. All 
Medicare-certified Home Health Agencies (HHAs) providing services in 
Arizona, Florida, Iowa, Maryland, Massachusetts, Nebraska, North 
Carolina, Tennessee, and Washington (competing HHAs) are required to 
compete in the Model. Requiring all Medicare-certified HHAs providing 
services in the selected states to participate in the Model ensures 
that: (1) There is no selection bias; (2) participating HHAs are 
representative of HHAs nationally; and, (3) there is sufficient 
participation to generate meaningful results.
    As finalized in the CY 2016 HH PPS final rule, the HHVBP Model uses 
the waiver authority under section 1115A(d)(1) of the Act to adjust 
Medicare payment rates under section 1895(b) of the Act beginning in CY 
2018 based on the competing HHAs' performance on applicable measures. 
Payment adjustments will be increased incrementally over the course of 
the HHVBP Model in the following manner: (1) A maximum payment 
adjustment of 3 percent (upward or downward) in CY 2018; (2) a maximum 
payment adjustment of 5 percent (upward or downward) in CY 2019; (3) a 
maximum payment adjustment of 6 percent (upward or downward) in CY 
2020; (4) a maximum payment adjustment of 7 percent (upward or 
downward) in CY 2021; and (5) a maximum payment adjustment of 8 percent 
(upward or downward) in CY 2022. Payment adjustments are based on each 
HHA's Total Performance Score (TPS) in a given performance year (PY) 
comprised of: (1) A set of measures already reported via the Outcome 
and Assessment Information Set (OASIS) and completed Home Health 
Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) 
surveys for all patients serviced by the HHA and select claims data 
elements; and (2) three New Measures for which points are achieved for 
reporting data.
    For CY 2019, we are proposing to remove five measures and add two 
new proposed composite measures to the applicable measure set for the 
HHVBP model, revise our weighting methodology for the measures, and 
rescore the maximum number of improvement points.

B. Quality Measures

1. Proposal To Remove Two OASIS-Based Measures Beginning With 
Performance Year 4 (CY 2019)
    In the CY 2016 HH PPS final rule, we finalized a set of quality 
measures in Figure 4a: Final PY1 Measures and Figure 4b: Final PY1 New 
Measures (80 FR 68671 through 68673) for the HHVBP Model used in PY1, 
referred to as the starter set. We also stated that this set of 
measures will be subject to change or retirement during subsequent 
model years and revised through the rulemaking process (80 FR 68669).

[[Page 32427]]

    The measures were selected for the Model using the following 
guiding principles: (1) Use a broad measure set that captures the 
complexity of the services HHAs provide; (2) incorporate flexibility 
for future inclusion of the Improving Medicare Post-Acute Care 
Transformation Act of 2014 (IMPACT) measures that cut across post-acute 
care settings; (3) develop `second generation' (of the HHVBP Model) 
measures of patient outcomes, health and functional status, shared 
decision making, and patient activation; (4) include a balance of 
process, outcome and patient experience measures; (5) advance the 
ability to measure cost and value; (6) add measures for appropriateness 
or overuse; and (7) promote infrastructure investments. This set of 
quality measures encompasses the multiple National Quality Strategy 
(NQS) domains \56\ (80 FR 68668). The NQS domains include six priority 
areas identified in the CY 2016 HH PPS final rule (80 FR 68668) as the 
CMS Framework for Quality Measurement Mapping. These areas are: (1) 
Clinical quality of care; (2) Care coordination; (3) Population & 
community health; (4) Person- and Caregiver-centered experience and 
outcomes; (5) Safety; and (6) Efficiency and cost reduction. Figures 4a 
and 4b of the CY 2016 HH PPS final rule identified 15 outcome measures 
(five from the HHCAHPS, eight from OASIS, and two claims-based 
measures), and nine process measures (six from OASIS, and three New 
Measures, which were not previously reported in the home health 
setting) for use in the Model.
---------------------------------------------------------------------------

    \56\ 2015 Annual Report to Congress, http://www.ahrq.gov/workingforquality/reports/annual-reports/nqs2015annlrpt.htm.
---------------------------------------------------------------------------

    In the CY 2017 HH PPS final rule, we removed four measures from the 
measure set for PY1 and subsequent performance years: (1) Care 
Management: Types and Sources of Assistance; (2) Prior Functioning ADL/
IADL; (3) Influenza Vaccine Data Collection Period: Does this episode 
of care include any dates on or between October 1 and March 31?; and 
(4) Reason Pneumococcal Vaccine Not Received, for the reasons discussed 
in that final rule (81 FR 76743 through 76747).
    In the CY 2018 HH PPS final rule, we removed the Drug Education on 
All Medications Provided to Patient/Caregiver during All Episodes of 
Care from the set of applicable measures beginning with PY3 for the 
reasons discussed in that final rule (82 FR 51703 through 51704).
    For PY4 and subsequent performance years, we propose to remove two 
OASIS-based process measures, Influenza Immunization Received for 
Current Flu Season and Pneumococcal Polysaccharide Vaccine Ever 
Received, from the set of applicable measures. We adopted the Influenza 
Immunization Received for Current Flu Season measure beginning PY1 of 
the model. Since that time, we have received input from both 
stakeholders and a Technical Expert Panel (TEP) convened by our 
contractor in 2017 that because the measure does not exclude HHA 
patients who were offered the vaccine but declined it and patients who 
were ineligible to receive it due to contraindications, the measure may 
not fully capture HHA performance in the administration of the 
influenza vaccine. In response to these concerns, we are proposing to 
remove the measure from the applicable measure set beginning PY4.
    We also adopted the Pneumococcal Polysaccharide Vaccine Ever 
Received measure beginning PY1 of the model. This process measure 
reports the percentage of HH episodes during which patients were 
determined to have ever received the Pneumococcal Polysaccharide 
Vaccine. The measure is based on guidelines previously issued by the 
Advisory Committee on Immunization Practices (ACIP),\57\ which 
recommended use of a single dose of the 23-valent pneumococcal 
polysaccharide vaccine (PPSV23) among all adults aged 65 years and 
older and those adults aged 19-64 years with underlying medical 
conditions that put them at greater risk for serious pneumococcal 
infection.\58\ In 2014, the ACIP updated its guidelines to recommend 
that both PCV13 and PPSV23 be given to all immunocompetent adults aged 
>=65 years.\59\ The recommended intervals for sequential administration 
of PCV13 and PPSV23 depend on several patient factors including: The 
current age of the adult, whether the adult had previously received 
PPSV23, and the age of the adult at the time of prior PPSV23 
vaccination (if applicable). Because the Pneumococcal Polysaccharide 
Vaccine Ever Received measure does not fully reflect the current ACIP 
guidelines, we are proposing to remove this measure from the model 
beginning PY4.
---------------------------------------------------------------------------

    \57\ The Advisory Committee on Immunization Practices was 
established under Section 222 of the Public Health Service Act (42 
U.S.C. 217a), as amended, to assist states and their political 
subdivisions in the prevention and control of communicable diseases; 
to advise the states on matters relating to the preservation and 
improvement of the public's health; and to make grants to states 
and, in consultation with the state health authorities, to agencies 
and political subdivisions of states to assist in meeting the costs 
of communicable disease control programs. (Charter of the Advisory 
Committee on Immunization Practices, filed April 1, 2018. https://www.cdc.gov/vaccines/acip/committee/ACIP-Charter-2018.pdf).
    \58\ Prevention of Pneumococcal Disease: Recommendations of the 
Advisory Committee on Immunization Practices (ACIP), MMWR 1997;46:1-
24.
    \59\ Tomczyk S, Bennett NM, Stoecker C, et al. Use of 13-valent 
pneumococcal conjugate vaccine and 23-valent pneumococcal 
polysaccharide vaccine among adults aged >=65 years: Recommendations 
of the Advisory Committee on Immunization Practices (ACIP). MMWR 
2014; 63: 822-5.
---------------------------------------------------------------------------

2. Proposal To Replace Three OASIS-Based Measures With Two Composite 
Measures Beginning With Performance Year 4
    As previously noted, one of the goals of the HHVBP Model is to 
study new potential quality and efficiency measures for appropriateness 
in the home health setting. In the CY 2018 HH PPS Final Rule, we 
solicited comment on additional quality measures for future 
consideration in the HHVBP model, specifically a Total Change in ADL/
IADL Peformance by HHA Patients Measure, a Composite Functional Decline 
Measure, and behavioral health measures (82 FR 51706 through 51711). 
For the reasons discussed, we are proposing to replace three individual 
OASIS measures (Improvement in Bathing, Improvement in Bed 
Transferring, and Improvement in Ambulation-Locomotion) with two 
composite measures: Total Normalized Composite Change in Self-Care and 
Total Normalized Composite Change in Mobility. These proposed measures 
use several of the same ADLs as the composite measures discussed in the 
CY 2018 HH PPS Final Rule (82 FR 51707). Our contractor convened a TEP 
in November 2017, which supported the use of two proposed composite 
measures in place of the three individual measures because HHA 
performance on the three individual measures would be combined with HHA 
performance on six additional ADL measures to create a more 
comprehensive assessment of HHA performance across a broader range of 
patient ADL outcomes. The TEP also noted that HHA performance is 
currently measured based on any change in improvement in patient 
status, while the composite measures would report the magnitude of 
patient change (either improvement or decline) across six self-care and 
three mobility patient outcomes.
    There are currently three ADL improvement measures in the HHVBP 
Model (Improvement in Bathing,

[[Page 32428]]

Improvement in Bed Transferring, and Improvement in Ambulation-
Locomotion). The maximum cumulative score across all three measures is 
30. Because we are proposing to replace these three measures with the 
two composite measures, we are also proposing that each of the two 
composite measures would have a maximum score of 15 points, to ensure 
that the relative weighting of ADL-based measures would stay the same 
if the proposal to replace the three ADL improvement measures with the 
two composite measures is adopted. That is, there would still be a 
maximum of 30 points available for ADL related measures.
    The proposed Total Normalized Composite Change in Self-Care and 
Total Normalized Composite Change in Mobility measures would represent 
a new direction in how quality of patient care is measured in home 
health. Both of these proposed composite measures combine several 
existing and endorsed Home Health Quality Reporting Program (HH QRP) 
outcome measures into focused composite measures to enhance quality 
reporting. These proposed composite measures fit within the Patient and 
Family Engagement \60\ domain as functional status and functional 
decline are important to assess for residents in home health settings. 
Patients who receive care from an HHA may have functional limitations 
and may be at risk for further decline in function because of limited 
mobility and ambulation.
---------------------------------------------------------------------------

    \60\ 2017 Measures under Consideration List. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/2017-CMS-Measurement-Priorities-and-Needs.pdf.
---------------------------------------------------------------------------

    The proposed Total Normalized Composite Change in Self-Care measure 
computes the magnitude of change, either positive or negative, based on 
a normalized amount of possible change on each of six OASIS-based 
quality outcomes. These six outcomes are as follows:

<bullet> Improvement in Grooming (M1800)
<bullet> Improvement in Upper Body Dressing (M1810)
<bullet> Improvement in Lower Body Dressing (M1820)
<bullet> Improvement in Bathing (M1830)
<bullet> Improvement in Toileting Hygiene (M1845)
<bullet> Improvement in Eating (M1870)

    The proposed Total Normalized Composite Change in Mobility measure 
computes the magnitude of change, either positive or negative, based on 
the normalized amount of possible change on each of three OASIS-based 
quality outcomes. These three outcomes are as follows:

<bullet> Improvement in Toilet Transferring (M1840)
<bullet> Improvement in Bed Transferring (M1850)
<bullet> Improvement in Ambulation/Locomotion (M1860)

    The magnitude of possible change for these OASIS items varies based 
on the number of response options. For example, M1800 (grooming) has 
four behaviorally-benchmarked response options (0 = most independent; 3 
= least independent) while M1830 (bathing) has seven behaviorally-
benchmarked response options (0 = most independent; 6 = least 
independent). The maximum possible change for a patient on item M1800 
is 3, while the maximum possible change for a patient on item M1830 is 
6. Both proposed composite measures would be computed and normalized at 
the episode level, then aggregated to the HHA level using the following 
steps:
    <bullet> Step 1: Calculate absolute change score for each OASIS 
item (based on change between Start of Care(SOC)/Resumption of Care 
(ROC) and discharge) used to compute the Total Normalized Composite 
Change in Self-Care (6 items) or Total Normalized Composite Change in 
Mobility (3 items) measures.
    <bullet> Step 2: Normalize scores based on maximum change possible 
for each OASIS item (which varies across different items). The 
normalized scores result in a maximum possible change for any single 
item equal to ``1''; this score is provided when a patient achieves the 
maximum possible change for the OASIS item.
    <bullet> Step 3: Total score for Total Normalized Composite Change 
in Self-Care or Total Normalized Composite Change in Mobility is 
calculated by summing the normalized scores for the items in the 
measure. Hence, the maximum possible range of normalized scores at the 
patient level for Total Normalized Composite Change in Self-Care is -6 
to +6, and for Total Normalized Composite Change in Mobility is -3 to 
+3.
    We created two prediction models for the proposed Total Normalized 
Composite Change in Self-Care (TNC_SC) and Total Normalized Composite 
Change in Mobility (TNC_MOB) measures using information from OASIS 
items and patient clinical condition categories (see Table 50 for 
details on the number of OASIS items and OASIS clinical categories used 
in the prediction models). We computed multiple ordinary least squares 
(OLS) analyses beginning with risk factors that were available from 
OASIS D items and patient condition groupings. Any single OASIS D item 
might have more than one risk factor because we create dichotomous risk 
factors for each response option on scaled (from dependence to 
independence) OASIS items. Those risk factors that were statistically 
significant at p <0.0001 level were kept in the prediction model. These 
two versions (CY 2014 and CY 2015) of the prediction models were done 
as ``proof of concept.'' We are proposing that the actual prediction 
models that would be used if the proposed composite measures are 
finalized would use episodes of care that ended in CY 2017, which would 
be the baseline year for the quality outcome measures used to compute 
the two proposed composite measures, as listed previously. The baseline 
year for these two composite measures would be calendar year 2017.
    The following Table 50 provides an overview of results from the CY 
2014 and CY 2015 prediction models for each proposed measure with 
estimated R-squared values comparing observed vs. predicted episode-
level performance.

 Table 50--Observed Versus Predicted Episode-Level Peformance for the Proposed Total Normalized Composite Change
                                                    Measures
----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Number of
                      Prediction model for                          OASIS items      clinical     R[dash]squared
                                                                       used         categories         value
----------------------------------------------------------------------------------------------------------------
2014 TNC_SC.....................................................              42              14           0.299
2015 TNC_SC.....................................................              41              13           0.311
2014 TNC_MOB....................................................              42              16           0.289

[[Page 32429]]

 
2015 TNC_MOB....................................................              41              18           0.288
----------------------------------------------------------------------------------------------------------------

    Table 50 presents the following summary information for the 
prediction models for the two proposed composite measures.
    <bullet> Prediction Model for: This column identifies the measure 
and year of data used for the two ``proof of concept'' prediction 
models created for each of the two proposed composite measures, Total 
Normalized Composite Change in Self-Care (TNC_SC) and Total Normalized 
Composite Change in Mobility (TNC_MOB). The development of the 
prediction models was identical in terms of the list of potential risk 
factors and clinical categories. The only difference was one set of 
prediction models used episodes of care that ended in CY 2014, while 
the other set of prediction models used episodes of care that ended in 
CY 2015.
    <bullet> Number of OASIS Items Used: This column indicates the 
number of OASIS items used as risk factors in the prediction model. For 
each prediction model, the number of OASIS items used is based on the 
number of risk factors that were statistically significant at p <0.0001 
level in the prediction model.
    <bullet> Number of Clinical Categories: This column indicates the 
number of patient clinical categories (for example, diagnoses related 
to infections or neoplasms or endocrine disorders) that are used as 
risk factors in the prediction model.
    <bullet> R-squared Value: The R-squared values are a measure of the 
proportion of the variation in outcomes that is accounted for by the 
prediction model. The results show that the methodology that was used 
to create the prediction models produced very consistent models that 
predict at least 29 percent of the variability in the proposed 
composite measures.
    The prediction models are applied at the episode level to create a 
specific predicted value for the composite measure for each episode of 
care. These episode level predicted values are averaged to compute a 
national predicted value and an HHA predicted value. The episode level 
observed values are averaged to compute the HHA observed value. The HHA 
TNC_SC and TNC_MOB observed scores are risk adjusted based on the 
following formula:

HHA Risk Adjusted = HHA Observed + National Predicted-HHA Predicted

    HHAs are not allowed to skip any of the OASIS items that are used 
to compute these proposed composite measures or the risk factors that 
comprise the prediction models for the two proposed composite measures. 
The OASIS items typically do not include ``not available (NA)'' or 
``unknown (UK)'' response options, and per HHQRP requirements,\61\ HHAs 
must provide responses to all OASIS items for the OASIS assessment to 
be accepted into the CMS data repository. Therefore, while we believe 
the likelihood that a value for one of these items would be missing is 
extremely small, we are proposing to impute a value of ``0'' if a value 
is ``missing.'' Specifically, if for some reason the information on one 
or more OASIS items that are used to compute TNC_SC or TNC_MOB is 
missing, we impute the value of ``0'' (no change) for the missing 
value. Similarly, if for some reason the information on one or more 
OASIS items that are used as a risk factor is missing, we impute the 
value of ``0'' (no effect) for missing values that comprise the 
prediction models for the two proposed composite measures. Table 51 
contains summary information for these two proposed composite measures. 
Because the proposed TNC_SC and TNC_MOB are composite measures rather 
than simple outcome measures, the terms ``Numerator'' and 
``Denominator'' do not apply to how these measures are calculated. 
Therefore, for these proposed composite measures, the ``Numerator'' and 
``Denominator'' columns in Table 51 are replaced with columns 
describing ``Measure Computation'' and ``Risk Adjustment''.
---------------------------------------------------------------------------

    \61\ Data Specifications--https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/OASIS/DataSpecifications.html.
---------------------------------------------------------------------------

    Table 51 contains the set of applicable measures under the HHVBP 
model, if we finalize our proposals to remove the OASIS-based measures, 
Influenza Immunization Received for Current Flu Season, Pneumococcal 
Polysaccharide Vaccine Ever Received, Improvement in Ambulation-
Locomotion, Improvement in Bed Transferring, and Improvement in 
Bathing, and add the two proposed OASIS-based outcome composite 
measures, Total Change in Self-Care and Total Change in Mobility. This 
measure set, if our proposals are finalized, would be applicable to PY4 
and each subsequent performance year until such time that another set 
of applicable measures, or changes to this measure set, are proposed 
and finalized in future rulemaking.

                                               Table 51--Measure Set for the HHVBP Model Beginning PY 4 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
           NQS domains               Measure title       Measure type         Identifier          Data source          Numerator          Denominator
--------------------------------------------------------------------------------------------------------------------------------------------------------
Clinical Quality of Care........  Improvement in      Outcome...........  NA................  OASIS (M1400).....  Number of home      Number of home
                                   Dyspnea.                                                                        health episodes     health episodes
                                                                                                                   of care where the   of care ending
                                                                                                                   discharge           with a discharge
                                                                                                                   assessment          during the
                                                                                                                   indicates less      reporting period,
                                                                                                                   dyspnea at          other than those
                                                                                                                   discharge than at   covered by
                                                                                                                   start (or           generic or
                                                                                                                   resumption) of      measure-specific
                                                                                                                   care.               exclusions.
Communication & Care              Discharged to       Outcome...........  NA................  OASIS (M2420).....  Number of home      Number of home
 Coordination.                     Community.                                                                      health episodes     health episodes
                                                                                                                   where the           of care ending
                                                                                                                   assessment          with discharge or
                                                                                                                   completed at the    transfer to
                                                                                                                   discharge           inpatient
                                                                                                                   indicates the       facility during
                                                                                                                   patient remained    the reporting
                                                                                                                   in the community    period, other
                                                                                                                   after discharge.    than those
                                                                                                                                       covered by
                                                                                                                                       generic or
                                                                                                                                       measure-specific
                                                                                                                                       exclusions.

[[Page 32430]]

 
Efficiency & Cost Reduction.....  Acute Care          Outcome...........  NQF0171...........  CCW (Claims)......  Number of home      Number of home
                                   Hospitalization:                                                                health stays for    health stays that
                                   Unplanned                                                                       patients who have   begin during the
                                   Hospitalization                                                                 a Medicare claim    12-month
                                   during first 60                                                                 for an unplanned    observation
                                   days of Home                                                                    admission to an     period. A home
                                   Health.                                                                         acute care          health stay is a
                                                                                                                   hospital in the     sequence of home
                                                                                                                   60 days following   health payment
                                                                                                                   the start of the    episodes
                                                                                                                   home health stay.   separated from
                                                                                                                                       other home health
                                                                                                                                       payment episodes
                                                                                                                                       by at least 60
                                                                                                                                       days.
Efficiency & Cost Reduction.....  Emergency           Outcome...........  NQF0173...........  CCW (Claims)......  Number of home      Number of home
                                   Department Use                                                                  health stays for    health stays that
                                   without                                                                         patients who have   begin during the
                                   Hospitalization.                                                                a Medicare claim    12-month
                                                                                                                   for outpatient      observation
                                                                                                                   emergency           period. A home
                                                                                                                   department use      health stay is a
                                                                                                                   and no claims for   sequence of home
                                                                                                                   acute care          health payment
                                                                                                                   hospitalization     episodes
                                                                                                                   in the 60 days      separated from
                                                                                                                   following the       other home health
                                                                                                                   start of the home   payment episodes
                                                                                                                   health stay.        by at least 60
                                                                                                                                       days.
Patient Safety..................  Improvement in      Outcome...........  NQF0177...........  OASIS (M1242).....  Number of home      Number of home
                                   Pain Interfering                                                                health episodes     health episodes
                                   with Activity.                                                                  of care where the   of care ending
                                                                                                                   value recorded on   with a discharge
                                                                                                                   the discharge       during the
                                                                                                                   assessment          reporting period,
                                                                                                                   indicates less      other than those
                                                                                                                   frequent pain at    covered by
                                                                                                                   discharge than at   generic or
                                                                                                                   the start (or       measure-specific
                                                                                                                   resumption) of      exclusions.
                                                                                                                   care.
Patient Safety..................  Improvement in      Outcome...........  NQF0176...........  OASIS (M2020).....  Number of home      Number of home
                                   Management of                                                                   health episodes     health episodes
                                   Oral Medications.                                                               of care where the   of care ending
                                                                                                                   value recorded on   with a discharge
                                                                                                                   the discharge       during the
                                                                                                                   assessment          reporting period,
                                                                                                                   indicates less      other than those
                                                                                                                   impairment in       covered by
                                                                                                                   taking oral         generic or
                                                                                                                   medications         measure-specific
                                                                                                                   correctly at        exclusions.
                                                                                                                   discharge than at
                                                                                                                   start (or
                                                                                                                   resumption) of
                                                                                                                   care.
Patient & Caregiver-Centered      Care of Patients..  Outcome...........  ..................  CAHPS.............  NA................  NA.
 Experience.
Patient & Caregiver-Centered      Communications      Outcome...........  ..................  CAHPS.............  NA................  NA.
 Experience.                       between Providers
                                   and Patients.
Patient & Caregiver-Centered      Specific Care       Outcome...........  ..................  CAHPS.............  NA................  NA.
 Experience.                       Issues.
Patient & Caregiver-Centered      Overall rating of   Outcome...........  ..................  CAHPS.............  NA................  NA.
 Experience.                       home health care.
Patient & Caregiver-Centered      Willingness to      Outcome...........  ..................  CAHPS.............  NA................  NA.
 Experience.                       recommend the
                                   agency.
Population/Community Health.....  Influenza           Process...........  NQF0431 (Used in    Reported by HHAs    Healthcare          Number of
                                   Vaccination                             other care          through Web         personnel in the    healthcare
                                   Coverage for Home                       settings, not       Portal.             denominator         personnel who are
                                   Health Care                             Home Health).                           population who      working in the
                                   Personnel.                                                                      during the time     healthcare
                                                                                                                   from October 1      facility for at
                                                                                                                   (or when the        least 1 working
                                                                                                                   vaccine became      day between
                                                                                                                   available)          October 1 and
                                                                                                                   through March 31    March 31 of the
                                                                                                                   of the following    following year,
                                                                                                                   year: (a)           regardless of
                                                                                                                   Received an         clinical
                                                                                                                   influenza           responsibility or
                                                                                                                   vaccination         patient contact.
                                                                                                                   administered at
                                                                                                                   the healthcare
                                                                                                                   facility, or
                                                                                                                   reported in
                                                                                                                   writing or
                                                                                                                   provided
                                                                                                                   documentation
                                                                                                                   that influenza
                                                                                                                   vaccination was
                                                                                                                   received
                                                                                                                   elsewhere: Or (b)
                                                                                                                   were determined
                                                                                                                   to have a medical
                                                                                                                   contraindication/
                                                                                                                   condition of
                                                                                                                   severe allergic
                                                                                                                   reaction to eggs
                                                                                                                   or to other
                                                                                                                   components of the
                                                                                                                   vaccine or
                                                                                                                   history of
                                                                                                                   Guillain-Barre
                                                                                                                   Syndrome within 6
                                                                                                                   weeks after a
                                                                                                                   previous
                                                                                                                   influenza
                                                                                                                   vaccination; or
                                                                                                                   (c) declined
                                                                                                                   influenza
                                                                                                                   vaccination; or
                                                                                                                   (d) persons with
                                                                                                                   unknown
                                                                                                                   vaccination
                                                                                                                   status or who do
                                                                                                                   not otherwise
                                                                                                                   meet any of the
                                                                                                                   definitions of
                                                                                                                   the previously
                                                                                                                   mentioned
                                                                                                                   numerator
                                                                                                                   categories.
Population/Community Health.....  Herpes zoster       Process...........  NA................  Reported by HHAs    Total number of     Total number of
                                   (Shingles)                                                  through Web         Medicare            Medicare
                                   vaccination: Has                                            Portal.             beneficiaries       beneficiaries
                                   the patient ever                                                                aged 60 years and   aged 60 years and
                                   received the                                                                    over who report     over receiving
                                   shingles                                                                        having ever         services from the
                                   vaccination?.                                                                   received zoster     HHA.
                                                                                                                   vaccine (shingles
                                                                                                                   vaccine).

[[Page 32431]]

 
Communication & Care              Advance Care Plan.  Process...........  NQF0326...........  Reported by HHAs    Patients who have   All patients aged
 Coordination.                                                                                 through Web         an advance care     65 years and
                                                                                               Portal.             plan or surrogate   older.
                                                                                                                   decision maker
                                                                                                                   documented in the
                                                                                                                   medical record or
                                                                                                                   documentation in
                                                                                                                   the medical
                                                                                                                   record that an
                                                                                                                   advanced care
                                                                                                                   plan was
                                                                                                                   discussed but the
                                                                                                                   patient did not
                                                                                                                   wish or was not
                                                                                                                   able to name a
                                                                                                                   surrogate
                                                                                                                   decision maker or
                                                                                                                   provide an
                                                                                                                   advance care plan.
--------------------------------------------------------------------------------------------------------------------------------------------------------
           NQS domains               Measure title       Measure type         Identifier          Data source           Measure       Risk adjustment **
                                                                                                                     computation **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient and Family Engagement...  Total Normalized    Composite Outcome.  NA................  OASIS (M1800)       The total           A prediction model
                                   Composite Change                                            (M1810) (M1820)     normalized change   is computed at
                                   in Self-Care.                                               (M1830) (M1845)     in self-care        the episode
                                                                                               (M1870).            functioning         level. The
                                                                                                                   across six OASIS    predicted value
                                                                                                                   items (grooming,    for the HHA and
                                                                                                                   bathing, upper &    the national
                                                                                                                   lower body          value of the
                                                                                                                   dressing, toilet    predicted values
                                                                                                                   hygiene, and        are calculated
                                                                                                                   eating).            and are used to
                                                                                                                                       calculate the
                                                                                                                                       risk-adjusted
                                                                                                                                       rate for the HHA,
                                                                                                                                       which is
                                                                                                                                       calculated using
                                                                                                                                       this formula: HHA
                                                                                                                                       Risk Adjusted =
                                                                                                                                       HHA Observed +
                                                                                                                                       National
                                                                                                                                       Predicted - HHA
                                                                                                                                       Predicted.
Patient and Family Engagement...  Total Normalized    Composite Outcome.  NA................  OASIS (M1840)       The total           A prediction model
                                   Composite Change                                            (M1850) (M1860).    normalized change   is computed at
                                   in Mobility.                                                                    in mobility         the episode
                                                                                                                   functioning         level. The
                                                                                                                   across three        predicted value
                                                                                                                   OASIS items         for the HHA and
                                                                                                                   (toilet             the national
                                                                                                                   transferring, bed   value of the
                                                                                                                   transferring, and   predicted values
                                                                                                                   ambulation/         are calculated
                                                                                                                   locomotion).        and are used to
                                                                                                                                       calculate the
                                                                                                                                       risk-adjusted
                                                                                                                                       rate for the HHA,
                                                                                                                                       which is
                                                                                                                                       calculated using
                                                                                                                                       this formula: HHA
                                                                                                                                       Risk Adjusted =
                                                                                                                                       HHA Observed +
                                                                                                                                       National
                                                                                                                                       Predicted - HHA
                                                                                                                                       Predicted.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Notes: For more detailed information on the measures using OASIS refer to the OASIS-C2 Guidance Manual effective January 1, 2017 available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/OASIS-C2-Guidance-Manual-6-29-16.pdf.
For NQF endorsed measures see The NQF Quality Positioning System available at http://www.qualityforum.org/QPS. For non-NQF measures using OASIS see
  links for data tables related to OASIS measures at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/index.html. For information on HHCAHPS measures see https://homehealthcahps.org/SurveyandProtocols/SurveyMaterials.aspx.
** Because the proposed Total Normalized Composite Change in Self-Care and Mobility measures are composite measures rather than simply outcome measures,
  the terms ``Numerator'' and ``Denominator'' do not apply.

    We invite public comment on the proposals to remove two OASIS-based 
measures, Influenza Immunization Received for Current Flu Season and 
Pneumococcal Polysaccharide Vaccine Ever Received, from the set of 
applicable measures for PY4 and subsequent performance years. We also 
invite public comment on the proposals to replace three OASIS-based 
measures, Improvement in Ambulation-Locomotion, Improvement in Bed 
Transferring, and Improvement in Bathing, with two proposed composite 
measures, Total Normalized Composite Change in Self-Care and Total 
Normalized Composite Change in Mobility, for PY4 and subsequent 
performance years.
3. Proposal To Reweight the OASIS-Based, Claims-Based, and HHCAHPS 
Measures
    In the CY 2016 HH PPS final rule, we finalized weighting measures 
within each of the HHVBP Model's four classifications (Clinical Quality 
of Care, Care Coordination and Efficiency, Person and Caregiver-
Centered Experience, and New Measures) the same for the purposes of 
payment adjustment. We finalized weighting each individual measure 
equally because we did not want any one measure within a classification 
to be more important than another measure, to encourage HHAs to 
approach quality improvement initiatives more broadly, and to address 
concerns where HHAs may be providing services to beneficiaries with 
different needs. Under this approach, a measure's weight remains the 
same even if some of the measures within a classification group have no 
available data. We stated that in subsequent years of the Model, we 
would monitor the impact of equally weighting the individual measures 
and may consider changes to the weighting methodology after analysis 
and in rulemaking (80 FR 68679).
    For PY4 and subsequent performance years, we are proposing to 
revise how we weight the individual measures and to amend Sec.  
484.320(c) accordingly. Specifically, we are proposing to change our 
methodology for calculating the Total Performance Score (TPS) by 
weighting the measure categories so that the OASIS-based measure 
category and the claims-based measure category would each count for 35 
percent and the HHCAHPS measure category would count for 30 percent of 
the 90 percent of the TPS that is based on performance of the Clinical 
Quality of Care, Care Coordination and Efficiency, and Person and 
Caregiver-Centered Experience measures. Note that these measures and 
their proposed revised weights would continue to account for the 90 
percent of the TPS that is based on the Clinical Quality of Care, Care 
Coordination and Efficiency, and Person and Caregiver-Centered 
Experience measures. Data reporting for each New Measure would continue 
to have equal weight and account for the 10 percent of the TPS that is 
based on the New Measures collected as part of the Model. As discussed 
further below, we believe that this proposed reweighting, to allow for 
more weight for the claims-based measures, would better support 
improvement in those measures.
    Weights would also be adjusted under this proposal for HHAs that 
are missing entire measure categories. For example,

[[Page 32432]]

if an HHA is missing all HHCAHPS measures, the OASIS and claims-based 
measure categories would both have the same weight (50 percent each). 
We believe that this approach would also increase the weight given to 
the claims-based measures, and as a result give HHAs more incentive to 
focus on improving them. Additionally, if measures within a category 
are missing, the weights of the remaining measures within that measure 
category would be adjusted proportionally, while the weight of the 
category as a whole would remain consistent. We are also proposing that 
the weight of the Acute Care Hospitalization: Unplanned Hospitalization 
during first 60 days of Home Health claims-based measure would be 
increased so that it has three times the weight of the Emergency 
Department Use without Hospitalization claims-based measure, based on 
our understanding that HHAs may have more control over the Acute Care 
Hospitalization: Unplanned Hospitalization during first 60 days of Home 
Health claims-based measure. In addition, because inpatient 
hospitalizations generally cost more than ED visits, we believe 
improvement in the Acute Care Hospitalization: Unplanned 
Hospitalization during first 60 days of Home Health claims-based 
measure may have a greater impact on Medicare expenditures.
    We are proposing to reweight the measures based on our ongoing 
monitoring and analysis of claims and OASIS-based measures, which shows 
that there has been a steady improvement in OASIS-based measures, while 
improvement in claims-based measures has been relatively flat. For 
example, Figures 5 and 6 show the change in average performance for the 
claims-based and OASIS-based performance measures used in the Model. 
For both figures, we report the trends observed in Model and non-Model 
states. In both Model and non-Model states, there has been a slight 
increase (indicating worse performance) in the Acute Care 
Hospitalization: Unplanned Hospitalization during first 60 days of Home 
Health measure. For all OASIS-based measures, except the Improvement in 
Management of Oral Medications measure and the Discharge to Community 
measure, there has been substantial improvement in both Model and non-
Model states. Given these results, we believe that increasing the 
weight given to the claims-based measures, and the Acute Care 
Hospitalization: Unplanned Hospitalization during first 60 days of Home 
Health measure in particular, may give HHAs greater incentive to focus 
on quality improvement in the claims-based measures. Increasing the 
weight of the claims-based measures was also supported by the 
contractor's TEP.

BILLING CODE 4120-01-P
<GRAPHIC><TIFF>TP12JY18.004


[[Page 32433]]


<GRAPHIC><TIF1>TP12JY18.005

    Table 52 shows the current and proposed weights for each measure 
based on this proposal to change the weighting methodology from 
weighting each individual measure equally to weighting the OASIS, 
claims-based, and HHCAHPS measure categories at 35-percent, 35-percent 
and 30-percent, respectively. Table 52 also shows the proposed 
weighting methodology based on various scoring scenarios. For example, 
for HHAs that are exempt from their beneficiaries completing HHCAHPS 
surveys, the total weight given to OASIS-based measures scores would be 
50 percent, with all OASIS-based measures (other than the two proposed 
composite measures) accounting for an equal proportion of that 50 
percent, and the total weight given to the claims-based measures scores 
would be 50 percent, with the Acute Care Hospitalization: Unplanned 
Hospitalizations measure accounting for 37.50 percent and the ED Use 
without Hospitalization measure accounting for 12.50 percent. Finally, 
Table 52 shows the change in the number of HHAs, by size, that would 
qualify for a TPS and payment adjustment under the current and proposed 
weighting methodologies, using CY 2016 data. We note that Table 52 
reflects only the proposed changes to the weighting methodology and not 
the other proposed changes to the HHVBP model for CY 2019 which, if 
finalized, would change the proposed weights as set forth in Table 52. 
We refer readers to Table 65 in section X. of this proposed rule, which 
reflects the weighting that would apply if all of our proposed changes, 
including the proposed changes to the applicable measure set, are 
adopted for CY 2019. As reflected in that table, the two proposed 
composite measures, if finalized, would have weights of 7.5 percent 
when all three measure categories are reported.

[[Page 32434]]

<GRAPHIC><TIFF>TP12JY18.006

BILLING CODE 4120-01-C
    We invite public comment on the proposal to reweight the measures 
within the Clinical Quality of Care, Care Coordination and Efficiency, 
and Person and Caregiver-Centered Experience classifications so that 
the OASIS-based measures account for 35-percent, the claims-based 
measures account for 35-percent, and the HHCAHPS account for 30-percent 
of the 90 percent of the TPS that is based on performance on these

[[Page 32435]]

measures, for PY4 and subsequent performance years. We are also 
proposing to amend Sec.  484.320 to reflect these proposed changes. 
Specifically, we are proposing to amend Sec.  484.320 to state that for 
performance years 4 and 5, CMS will sum all points awarded for each 
applicable measure within each category of measures (OASIS-based, 
claims-based, and HHCAHPS) excluding the New Measures, weighted at 35-
percent for the OASIS-based measure category, 35-percent for the 
claims-based measure category, and 30-percent for the HHCAHPS measure 
category, to calculate a value worth 90-percent of the Total 
Performance Score. Table 53 is a sample calculation to show how this 
proposal, in connection with the proposed changes to the measure set, 
would affect scoring under the model as set forth in prior rulemaking 
(80 FR 68679 through 68686) when all three measure categories are 
reported.

  Table 53--Sample HHVBP Total Performance Score Calculation Under Current and Proposed Weights for Individual
                                              Performance Measures
----------------------------------------------------------------------------------------------------------------
                                    Points for                      Points for
                                      current     Current weight     proposed        Proposed        Weighted
                                     measures           (%)          measures       weight (%)        points
----------------------------------------------------------------------------------------------------------------
OASIS:
    Composite self-care.........             N/A            0.00           7.661            7.50            9.19
    Composite mobility..........             N/A            0.00           5.299            7.50            6.36
    Flu vaccine ever received...           7.662            6.25             N/A            0.00             N/A
    Pneumococcal vaccine........           8.162            6.25             N/A            0.00             N/A
    Improvement in bathing......           5.064            6.25             N/A            0.00             N/A
    Improvement in bed transfer.           4.171            6.25             N/A            0.00             N/A
    Improvement in ambulation...           3.725            6.25             N/A            0.00             N/A
    Improve oral meds...........           3.302            6.25           3.302            5.00            2.64
    Improve Dyspnea.............           4.633            6.25           4.633            5.00            3.71
    Improve Pain................           4.279            6.25           4.279            5.00            3.42
    Discharge to community......           0.618            6.25           0.618            5.00            0.49
Claims:
    Outpatient ED...............               0            6.25               0            8.75            0.00
    Hospitalizations............            1.18            6.25            1.18           26.25            4.96
HHCAHPS:
    Care of patients............              10            6.25              10            6.00            9.60
    Communication between                     10            6.25              10            6.00            9.60
     provider and patient.......
    Discussion of special care                10            6.25              10            6.00            9.60
     issues.....................
    Overall rating of care......           5.921            6.25           5.921            6.00            5.68
    Willingness to recommend HHA           8.406            6.25           8.406            6.00            8.07
     to family and friends......
                                 -------------------------------------------------------------------------------
        Total...................          87.123          100.00  ..............          100.00          57.776
----------------------------------------------------------------------------------------------------------------


 
   Total performance score calculation        Current        Proposed
------------------------------------------------------------------------
Raw score...............................          87.123          57.776
Scaled score (adjusted for # of measures          58.082          57.776
 present)...............................
Weighted score (90% of scaled score)....          52.274          51.998
New measure score.......................         100.000         100.000
Weighted new measure score (10% of new                10              10
 measure score).........................
TPS (sum of weighted score and weighted           62.274          61.998
 new measure score).....................
------------------------------------------------------------------------

C. Performance Scoring Methodology

1. Proposal To Rescore the Maximum Amount of Improvement Points
    In the CY 2016 HH PPS final rule, we finalized that an HHA could 
earn 0-10 points based on how much its performance in the performance 
period improved from its performance on each measure in the Clinical 
Quality of Care, Care Coordination and Efficiency, and Person and 
Caregiver-Centered Experience classifications during the baseline 
period. We noted, in response to public comment about our scoring 
methodology for improvement points, that we would monitor and evaluate 
the impact of awarding an equal amount of points for both achievement 
and improvement and may consider changes to the weight of the 
improvement score relative to the achievement score in future years 
through rulemaking (80 FR 68682).
    We are proposing to reduce the maximum amount of improvement 
points, from 10 points to 9 points, for PY4 and subsequent performance 
years for all measures except for, if finalized, the Total Normalized 
Composite Change in Self-Care and Total Normalized Composite Change in 
Mobility measures, for which the maximum improvement points would be 
13.5. The maximum score of 13.5 represents 90-percent of the maximum 15 
points that could be earned for each of the two proposed composite 
measures. The HHVBP Model focuses on having all HHAs provide high 
quality care and we believe that awarding more points for achievement 
than for improvement beginning with PY4 of the model would support this 
goal. We expect that at this point several years into participation in 
the Model, participating HHAs have had enough time to make the 
necessary investments in quality improvement efforts to support a 
higher level of care, warranting a slightly stronger focus on 
achievement over improvement on measure performance.
    We believe that reducing the maximum improvement points to 9 would 
encourage HHAs to focus on achieving higher performance levels and 
incentivizing in this manner would encourage HHAs to rely less on their 
improvement and more on their achievement.
    This proposal would also be consistent with public comments, and 
suggestions provided by our contractor's TEP. As summarized in the CY 
2016 HH PPS final rule, we received comments encouraging us to focus on 
rewarding

[[Page 32436]]

the achievement of specified quality scores, and reduce the emphasis on 
improvement scores after the initial 3 years of the HHVBP Model. Some 
commenters suggested measuring performance primarily based on 
achievement of specified quality scores with a declining emphasis over 
time on improvement versus achievement (80 FR 68682).
    The TEP also agreed with reducing the maximum number of improvement 
points, which they believed would better encourage HHAs to pursue 
improved health outcomes for beneficiaries. We note that for the 
Hospital Value-Based Purchasing (HVBP) Program, CMS finalized a scoring 
methodology where hospitals could earn a maximum of 9 improvement 
points if their improvement score falls between the improvement 
threshold and the benchmark (76 FR 26515). Similarly, HHVBP is now 
proposing a scoring methodology where HHAs could earn a maximum of 9 
improvement points.
    We propose that an HHA would earn 0-9 points based on how much its 
performance during the performance period improved from its performance 
on each measure in the Clinical Quality of Care, Care Coordination and 
Efficiency, and Person and Caregiver-Centered Experience 
classifications during the baseline period. A unique improvement range 
for each measure would be established for each HHA that defines the 
difference between the HHA's baseline period score and the same state 
level benchmark for the measure used in the achievement scoring 
calculation, according to the proposed improvement formula. If an HHA's 
performance on the measure during the performance period was--
    <bullet> Equal to or higher than the benchmark score, the HHA could 
receive an improvement score of 9 points (an HHA with performance equal 
to or higher than the benchmark score could still receive the maximum 
of 10 points for achievement);
    <bullet> Greater than its baseline period score but below the 
benchmark (within the improvement range), the HHA could receive an 
improvement score of 0-9 (except for, if finalized, the Total 
Normalized Composite Change in Self-Care and Total Normalized Composite 
Change in Mobility measures, for which the maximum improvement score 
would be 15) for each of the two proposed composite measures) based on 
the formula and as illustrated in the examples below; or,
    <bullet> Equal to or lower than its baseline period score on the 
measure, the HHA could receive zero points for improvement.
<GRAPHIC><TIFF>TP12JY18.007

2. Examples of Calculating Achievement and Improvement Scores
    For illustrative purposes we present the following examples of how 
the proposed changes to the performance scoring methodology would be 
applied in the context of the measures in the Clinical Quality of Care, 
Care Coordination and Efficiency, and Person and Caregiver Centered 
Experience classifications. These HHA examples are based on data from 
2015 (for the baseline period) and 2016 (for the performance year). 
Figure 7 shows the scoring for HHA `A' as an example. The benchmark 
calculated for the improvement in pain measure is 97.676 for HHA A 
(note that the benchmark is calculated as the mean of the top decile in 
the baseline period for the state). The achievement threshold was 
75.358 (this is defined as the performance of the median or the 50th 
percentile among HHAs in the baseline period for the state). HHA A's 
Year 1 performance rate for the measure was 98.348, which exceeds the 
benchmark so the HHA earned the maximum 10 points based on its 
achievement score. Its improvement score is irrelevant in the 
calculation because measure performance exceeded the benchmark.
    Figure 7 also shows the scoring for HHA `B.' As referenced below, 
HHA B's performance on this measure went from 52.168 (which was below 
the achievement threshold) in the baseline period to 76.765 (which is 
above the achievement threshold) in the performance period. Applying 
the achievement scale, HHA B' would earn 1.067 points for achievement, 
calculated as follows: 9 * (76.765 - 75.358)/(97.676 - 75.358) + 0.5 = 
1.067.\62\ Calculating HHA B's improvement score yields the following 
result: based on HHA B's period-to-period improvement, from 52.168 in 
the baseline year to 76.765 in the performance year, HHA B would earn 
4.364 points, calculated as follows: 9 * (76.765 - 52.168)/(97.676 - 
75.358) - 0.5 = 4.364.\63\ Because the higher of the achievement and 
improvement scores is used, HHA B would receive 4.364 points for this 
measure.
---------------------------------------------------------------------------

    \62\ Achievement points are calculated as 9 * (HHA Performance 
Year Score - Achievement Threshold)/(Benchmark - Achievement 
threshold) + 0.5.
    \63\ The formula for calculating improvement points is 9 * (HHA 
Performance Year Score - HHA Baseline Period Score)/(HHA Benchmark - 
HHA Baseline Period Score) - 0.5.
---------------------------------------------------------------------------

    In Figure 8, HHA `C' yielded a decline in performance on the 
improvement in pain measure, falling from 70.266 to 58.487. HHA C's 
performance during the performance period was lower than the 
achievement threshold of 75.358 and, as a result, the HHA would receive 
0 points based on achievement. It would also receive 0 points for 
improvement, because its performance during the performance period was 
lower than its performance during the baseline period.

BILLING CODE 4120-01-P

[[Page 32437]]

<GRAPHIC><TIFF>TP12JY18.008


[[Page 32438]]


<GRAPHIC><TIF1>TP12JY18.009

BILLING CODE 4120-01-C

    We would monitor and evaluate the impact of reducing the maximum 
improvement points to 9 and would consider whether to propose more 
changes to the weight of the improvement score relative to the 
achievement score in future years through rulemaking.
    We invite public comment on the proposal to reduce the maximum 
amount of improvement points, from 10 points to 9 points for PY 4 and 
subsequent performance years.

D. Update on the Public Display of Total Performance Scores

    In the CY 2016 HH PPS final rule (80 FR 68658), we stated that one 
of the three goals of the HHVBP Model is to enhance the current public 
reporting processes. We reiterated this goal and continued discussing 
the public display of HHAs' Total Performance Scores (TPSs) in the CY 
2017 HH PPS final rule (81 FR 76751 through 76752). We believe that 
publicly reporting a participating HHA's TPS will encourage providers 
and patients to use this information when selecting an HHA to provide 
quality care. We are encouraged by the previous stakeholder comments 
and support for public reporting that could assist patients, 
physicians, discharge planners, and other referral sources to choose 
higher-performing HHAs.
    In the CY 2017 HH PPS final rule, we noted that one commenter 
suggested that we not consider public display until after the Model was 
evaluated. Another commenter favored the public display of the TPS, but 
recommended that CMS use a transparent process and involve stakeholders 
in deciding what will be reported, and provide a review period with a 
process for review and appeal before reporting.
    As discussed in the CY 2017 HH PPS final rule, we are considering 
public reporting for the HHVBP Model after allowing analysis of at 
least eight quarters of performance data for the Model and the 
opportunity to compare how these results align with other publicly 
reported quality data (81 FR 76751). While we are not making a specific 
proposal at this time, we are soliciting further public comment on what 
information, specifically from the CY 2017 Annual Total Performance 
Score and Payment Adjustment Reports and subsequent annual reports, 
should be made publicly available. We note that HHAs have the 
opportunity to review and appeal their Annual Total Performance Score 
and Payment Adjustment Reports as outlined in the appeals process 
finalized in the CY 2017 HH PPS final rule (81 FR 76747 through 76750). 
Examples of the information included in the Annual Total Performance 
Score and Payment Adjustment Report include the agency: Name, address, 
TPS, payment adjustment percentage, performance information for each 
measure used in the Model (for example, quality measure scores, 
achievement, and improvement points), state and cohort information, and 
percentile ranking. Based on the public comments received, we will 
consider what information, specifically from the annual reports, we may

[[Page 32439]]

consider proposing for public reporting in future rulemaking.

V. Proposed Updates to the Home Health Quality Reporting Program (HH 
QRP)

A. Background and Statutory Authority

    Section 1895(b)(3)(B)(v)(II) of the Social Security Act (the Act) 
requires that for 2007 and subsequent years, each HHA submit to the 
Secretary in a form and manner, and at a time, specified by the 
Secretary, such data that the Secretary determines are appropriate for 
the measurement of health care quality. To the extent that an HHA does 
not submit data with respect to a year in accordance with this clause, 
the Secretary is directed to reduce the HH market basket percentage 
increase applicable to the HHA for such year by 2 percentage points. As 
provided at section 1895(b)(3)(B)(vi) of the Act, depending on the 
market basket percentage increase applicable for a particular year, for 
2015 and each subsequent year (except 2018), the reduction of that 
increase by 2 percentage points for failure to comply with the 
requirements of the HH QRP and further reduction of the increase by the 
productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of 
the Act may result in the home health market basket percentage increase 
being less than 0.0 percent for a year, and may result in payment rates 
under the Home Health PPS for a year being less than payment rates for 
the preceding year.
    For more information on the policies we have adopted for the HH 
QRP, we refer readers to the CY 2007 HH PPS final rule (71 FR 65888 
through 65891), the CY 2008 HH PPS final rule (72 FR 49861 through 
49864), the CY 2009 HH PPS update notice (73 FR 65356), the CY 2010 HH 
PPS final rule (74 FR 58096 through 58098), the CY 2011 HH PPS final 
rule (75 FR 70400 through 70407), the CY 2012 HH PPS final rule (76 FR 
68574), the CY 2013 HH PPS final rule (77 FR 67092), the CY 2014 HH PPS 
final rule (78 FR 72297), the CY 2015 HH PPS final rule (79 FR 66073 
through 66074), the CY 2016 HH PPS final rule (80 FR 68690 through 
68695), the CY 2017 HH PPS final rule (81 FR 76752), and the CY 2018 HH 
PPS final rule (82 FR 51711 through 51712).
    Although we have historically used the preamble to the HH PPS 
proposed and final rules each year to remind stakeholders of all 
previously finalized program requirements, we have concluded that 
repeating the same discussion each year is not necessary for every 
requirement, especially if we have codified it in our regulations. 
Accordingly, the following discussion is limited as much as possible to 
a discussion of our proposals for future years of the HH QRP, and 
represents the approach we intend to use in our rulemakings for this 
program going forward.

B. General Considerations Used for the Selection of Quality Measures 
for the HH QRP

1. Background
    For a detailed discussion of the considerations we historically 
used for measure selection for the HH QRP quality, resource use, and 
others measures, we refer readers to the CY 2016 HH PPS final rule (80 
FR 68695 through 68696).
2. Accounting for Social Risk Factors in the HH QRP Program
    In the CY 2018 HH PPS final rule (82 FR 51713 through 51714) we 
discussed the importance of improving beneficiary outcomes including 
reducing health disparities. We also discussed our commitment to 
ensuring that medically complex patients, as well as those with social 
risk factors, receive excellent care. We discussed how studies show 
that social risk factors, such as being near or below the poverty level 
as determined by HHS, belonging to a racial or ethnic minority group, 
or living with a disability, can be associated with poor health 
outcomes and how some of this disparity is related to the quality of 
health care.\64\ Among our core objectives, we aim to improve health 
outcomes, attain health equity for all beneficiaries, and ensure that 
complex patients as well as those with social risk factors receive 
excellent care. Within this context, reports by the Office of the 
Assistant Secretary for Planning and Evaluation (ASPE) and the National 
Academy of Medicine have examined the influence of social risk factors 
in our value-based purchasing programs.\65\ As we noted in the CY 2018 
HH PPS final rule (82 FR 51713 through 51714), ASPE's report to 
Congress, which was required by the IMPACT Act, found that, in the 
context of value based purchasing programs, dual eligibility was the 
most powerful predictor of poor health care outcomes among those social 
risk factors that they examined and tested. ASPE is continuing to 
examine this issue in its second report required by the IMPACT Act, 
which is due to Congress in the fall of 2019. In addition, as we noted 
in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38428 through 38429), 
the National Quality Forum (NQF) undertook a 2-year trial period in 
which certain new measures and measures undergoing maintenance review 
have been assessed to determine if risk adjustment for social risk 
factors is appropriate for these measures.\66\ The trial period ended 
in April 2017 and a final report is available at: http://www.qualityforum.org/SES_Trial_Period.aspx. The trial concluded that 
``measures with a conceptual basis for adjustment generally did not 
demonstrate an empirical relationship'' between social risk factors and 
the outcomes measured. This discrepancy may be explained in part by the 
methods used for adjustment and the limited availability of robust data 
on social risk factors. NQF has extended the socioeconomic status (SES) 
trial,\67\ allowing further examination of social risk factors in 
outcome measures.
---------------------------------------------------------------------------

    \64\ See, for example United States Department of Health and 
Human Services. ``Healthy People 2020: Disparities. 2014.'' 
Available at: http://www.healthypeople.gov/2020/about/foundation-health-measures/Disparities; or National Academies of Sciences, 
Engineering, and Medicine. Accounting for Social Risk Factors in 
Medicare Payment: Identifying Social Risk Factors. Washington, DC: 
National Academies of Sciences, Engineering, and Medicine 2016.
    \65\ Department of Health and Human Services Office of the 
Assistant Secretary for Planning and Evaluation (ASPE), ``Report to 
Congress: Social Risk Factors and Performance under Medicare's 
Value-Based Purchasing Programs.'' December 2016. Available at: 
https://aspe.hhs.gov/pdf-report/report-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \66\ Available at http://www.qualityforum.org/SES_Trial_Period.aspx.
    \67\ Available at: http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=86357.
---------------------------------------------------------------------------

    In the CY 2018/FY 2018 proposed rules for our quality reporting and 
value-based purchasing programs, we solicited feedback on which social 
risk factors provide the most valuable information to stakeholders and 
the methodology for illuminating differences in outcomes rates among 
patient groups within a provider that would also allow for a comparison 
of those differences, or disparities, across providers. Feedback we 
received across our quality reporting programs included encouraging CMS 
to explore whether factors could be used to stratify or risk adjust the 
measures (beyond dual eligibility), to consider the full range of 
differences in patient backgrounds that might affect outcomes, to 
explore risk adjustment approaches, and to offer careful consideration 
of what type of information display would be most useful to the public.
    We also sought public comment on confidential reporting and future 
public reporting of some of our measures stratified by patient dual 
eligibility. In

[[Page 32440]]

general, commenters noted that stratified measures could serve as tools 
for hospitals to identify gaps in outcomes for different groups of 
patients, improve the quality of health care for all patients, and 
empower consumers to make informed decisions about health care. 
Commenters encouraged us to stratify measures by other social risk 
factors such as age, income, and educational attainment. With regard to 
value-based purchasing programs, commenters also cautioned CMS to 
balance fair and equitable payment while avoiding payment penalties 
that mask health disparities or discouraging the provision of care to 
more medically complex patients. Commenters also noted that value-based 
payment program measure selection, domain weighting, performance 
scoring, and payment methodology must account for social risk.
    As a next step, we are considering options to improve health 
disparities among patient groups within and across hospitals by 
increasing the transparency of disparities as shown by quality 
measures. We also are considering how this work applies to other CMS 
quality programs in the future. We refer readers to the FY 2018 IPPS/
LTCH PPS final rule (82 FR 38403 through 38409) for more details, where 
we discuss the potential stratification of certain Hospital IQR Program 
outcome measures. Furthermore, we continue to consider options to 
address equity and disparities in our value-based purchasing programs.
    We plan to continue working with ASPE, the public, and other key 
stakeholders on this important issue to identify policy solutions that 
achieve the goals of attaining health equity for all beneficiaries and 
minimizing unintended consequences.

C. Proposed Removal Factors for Previously Adopted HH QRP Measures

    As a part of our Meaningful Measures Initiative, discussed in 
section I.D.1 of this proposed rule, we strive to put patients first, 
ensuring that they, along with their clinicians, are empowered to make 
decisions about their own healthcare using data-driven information that 
is increasingly aligned with a parsimonious set of meaningful quality 
measures. We began reviewing the HH QRP measure set in accordance with 
the Meaningful Measures Initiative discussed in section I.D.1 of this 
proposed rule, and we are working to identify how to move the HH QRP 
forward in the least burdensome manner possible, while continuing to 
prioritize and incentivize improvement in the quality of care provided 
to patients.
    Specifically, we believe the goals of the HH QRP and the measures 
used in the program overlap with the Meaningful Measures Initiative 
priorities, including making care safer, strengthening person and 
family engagement, promoting coordination of care, promoting effective 
prevention and treatment, and making care affordable.
    We also evaluated the appropriateness and completeness of the HH 
QRP's current measure removal factors. In the CY 2017 HH PPS final rule 
(81 FR 76754 through 76755), we adopted a process for retaining, 
removing, and replacing previously adopted HH QRP measures. To be 
consistent with other established quality reporting programs, we are 
proposing to replace the six criteria used when considering a quality 
measure for removal, finalized in the CY 2017 HH PPS final rule (81 FR 
76754 through 76755), with the following seven measure removal factors, 
finalized for the LTCH QRP in the FY 2013 IPPS/LTCH PPS final rule (77 
FR 53614 through 53615), for the SNF QRP in the FY 2016 SNF PPS final 
rule (80 FR 46431 through 46432), and for the IRF QRP in the CY 2013 
OPPS/ASC final rule (77 FR 68502 through 68503), for use in the HH QRP:
    <bullet> Factor 1. Measure performance among HHAs is so high and 
unvarying that meaningful distinctions in improvements in performance 
can no longer be made.
    <bullet> Factor 2. Performance or improvement on a measure does not 
result in better patient outcomes.
    <bullet> Factor 3. A measure does not align with current clinical 
guidelines or practice.
    <bullet> Factor 4. A more broadly applicable measure (across 
settings, populations, or conditions) for the particular topic is 
available.
    <bullet> Factor 5. A measure that is more proximal in time to 
desired patient outcomes for the particular topic is available.
    <bullet> Factor 6. A measure that is more strongly associated with 
desired patient outcomes for the particular topic is available.
    <bullet> Factor 7. Collection or public reporting of a measure 
leads to negative unintended consequences other than patient harm.
    We believe these measure removal factors are substantively 
consistent with the criteria we previously adopted (only we are 
changing the terminology to call them ``factors'') and appropriate for 
use in the HH QRP. However, even if one or more of the measure removal 
factors applies, we might nonetheless choose to retain the measure for 
certain specified reasons. Examples of such instances could include 
when a particular measure addresses a gap in quality that is so 
significant that removing the measure could result in poor quality, or 
in the event that a given measure is statutorily required. Furthermore, 
we note that consistent with other quality reporting programs, we apply 
these factors on a case-by-case basis.
    We finalized in the CY 2017 HH PPS final rule (81 FR 76755) that 
removal of a HH QRP measure would take place through notice and comment 
rulemaking, unless we determined that a measure was causing concern for 
patient safety. Specifically, in the case of a HH QRP measure for which 
there was a reason to believe that the continued collection raised 
possible safety concerns, we would promptly remove the measure and 
publish the justification for the removal in the Federal Register 
during the next rulemaking cycle. In addition, we would immediately 
notify HHAs and the public through the usual communication channels, 
including listening sessions, memos, email notification, and Web 
postings. If we removed a measure from the HH QRP under these 
circumstances but also collected data on that measure under different 
statutory authority for a different purpose, we would notify 
stakeholders that we would also cease collecting the data under that 
alternative statutory authority.
    In this proposed rule, we are proposing to adopt an additional 
factor to consider when evaluating potential measures for removal from 
the HH QRP measure set:
    <bullet> Factor 8. The costs associated with a measure outweigh the 
benefit of its continued use in the program.
    As we discussed in section I.D.1 of this proposed rule, with 
respect to our new Meaningful Measures Initiative, we are engaging in 
efforts to ensure that the HH QRP measure set continues to promote 
improved health outcomes for beneficiaries while minimizing the overall 
costs associated with the program. We believe these costs are 
multifaceted and include not only the burden associated with reporting, 
but also the costs associated with implementing and maintaining the 
program. We have identified several different types of costs, 
including, but not limited to the following:
    <bullet> Provider and clinician information collection burden and 
burden associated with the submitting/reporting of quality measures to 
CMS.
    <bullet> The provider and clinician cost associated with complying 
with other HH programmatic requirements.

[[Page 32441]]

    <bullet> The provider and clinician cost associated with 
participating in multiple quality programs, and tracking multiple 
similar or duplicative measures within or across those programs.
    <bullet> The cost to CMS associated with the program oversight of 
the measure, including measure maintenance and public display.
    <bullet> The provider and clinician cost associated with compliance 
with other federal and state regulations (if applicable).
    For example, it may be of limited benefit to retain or maintain a 
measure which our analyses show no longer meaningfully supports program 
objectives (for example, informing beneficiary choice). It may also be 
costly for HHAs to track confidential feedback, preview reports, and 
publicly reported information on a measure where we use the measure in 
more than one program. We may also have to expend resources to maintain 
the specifications for the measure, including the tools needed to 
collect, validate, analyze, and publicly report the measure data.
    When these costs outweigh the evidence supporting the continued use 
of a measure in the HH QRP, we believe it may be appropriate to remove 
the measure from the program. Although we recognize that one of the 
main goals of the HH QRP is to improve beneficiary outcomes by 
incentivizing health care providers to focus on specific care issues 
and making public data related to those issues, we also recognize that 
those goals can have limited utility where, for example, the publicly 
reported data is of limited use because it cannot be easily interpreted 
by beneficiaries and used to influence their choice of providers. In 
these cases, removing the measure from the HH QRP may better 
accommodate the costs of program administration and compliance without 
sacrificing improved health outcomes and beneficiary choice.
    We are proposing that we would remove measures based on proposed 
Factor 8 on a case-by-case basis. For example, we may decide to retain 
a measure that is burdensome for HHAs to report if we conclude that the 
benefit to beneficiaries is so high that it justifies the reporting 
burden. Our goal is to move the HH QRP program forward in the least 
burdensome manner possible, while maintaining a parsimonious set of 
meaningful quality measures and continuing to incentivize improvement 
in the quality of care provided to patients.
    We are inviting public comment on our proposals to replace the six 
criteria used when considering a quality measure for removal with the 
seven measure removal factors currently adopted in the LTCH QRP, IRF 
QRP, and SNF QRP. We are also inviting public comment on our proposal 
to adopt new measure removal Factor 8. The costs associated with a 
measure outweigh the benefit of its continued use in the program.

D. Quality Measures Currently Adopted for the HH QRP

    The HH QRP currently has 31 measures for the CY 2020 program year, 
as outlined in Table 54.

       Table 54--Measures Currently Adopted for the CY 2020 HH QRP
------------------------------------------------------------------------
                                                         Measure name &
                      Short name                           data source
------------------------------------------------------------------------
                               OASIS-Based
------------------------------------------------------------------------
Ambulation............................................  Improvement in
                                                         Ambulation/
                                                         Locomotion (NQF
                                                         #0167).
Application of Falls..................................  Application of
                                                         Percent of
                                                         Residents
                                                         Experiencing
                                                         One or More
                                                         Falls with
                                                         Major Injury
                                                         (Long Stay)
                                                         (NQF #0674).
Application of Functional Assessment..................  Application of
                                                         Percent of Long-
                                                         Term Care
                                                         Hospital (LTCH)
                                                         Patients with
                                                         an Admission
                                                         and Discharge
                                                         Functional
                                                         Assessment and
                                                         a Care Plan
                                                         That Addresses
                                                         Function (NQF
                                                         #2631).
Bathing...............................................  Improvement in
                                                         Bathing (NQF
                                                         #0174).
Bed Transferring......................................  Improvement in
                                                         Bed
                                                         Transferring
                                                         (NQF #0175).
Depression Assessment.................................  Depression
                                                         Assessment
                                                         Conducted.
Diabetic Foot Care....................................  Diabetic Foot
                                                         Care and
                                                         Patient/
                                                         Caregiver
                                                         Education
                                                         Implemented
                                                         during All
                                                         Episodes of
                                                         Care (#0519).
DRR...................................................  Drug Regimen
                                                         Review
                                                         Conducted With
                                                         Follow-Up for
                                                         Identified
                                                         Issues--Post
                                                         Acute Care
                                                         (PAC) HH QRP.
Drug Education........................................  Drug Education
                                                         on All
                                                         Medications
                                                         Provided to
                                                         Patient/
                                                         Caregiver
                                                         during All
                                                         Episodes of
                                                         Care.
Dyspnea...............................................  Improvement in
                                                         Dyspnea.
Falls Risk............................................  Multifactor Fall
                                                         Risk Assessment
                                                         Conducted For
                                                         All Patients
                                                         Who Can
                                                         Ambulate (NQF
                                                         #0537).
Influenza.............................................  Influenza
                                                         Immunization
                                                         Received for
                                                         Current Flu
                                                         Season (NQF
                                                         #0522).
Oral Medications......................................  Improvement in
                                                         Management of
                                                         Oral
                                                         Medications
                                                         (NQF #0176).
Pain..................................................  Improvement in
                                                         Pain
                                                         Interfering
                                                         with Activity
                                                         (NQF #0177).
PPV...................................................  Pneumococcal
                                                         Polysaccharide
                                                         Vaccine Ever
                                                         Received.
Pressure Ulcer/Injury.................................  Percent of
                                                         Residents or
                                                         Patients With
                                                         Pressure Ulcers
                                                         That Are New or
                                                         Worsened (Short
                                                         Stay) (NQF
                                                         #0678), removed
                                                         as of January
                                                         1, 2019.
                                                        Changes in Skin
                                                         Integrity Post-
                                                         Acute Care:
                                                         Pressure Ulcer/
                                                         Injury measure,
                                                         effective
                                                         January 1,
                                                         2019.
Surgical Wounds.......................................  Improvement in
                                                         Status of
                                                         Surgical Wounds
                                                         (NQF #0178).
Timely Care...........................................  Timely
                                                         Initiation Of
                                                         Care (NQF
                                                         #0526).
-------------------------------------------------------
                              Claims-Based
------------------------------------------------------------------------
ACH...................................................  Acute Care
                                                         Hospitalization
                                                         During the
                                                         First 60 Days
                                                         of HH (NQF
                                                         #0171).
DTC...................................................  Discharge to
                                                         Community-Post
                                                         Acute Care
                                                         (PAC) Home
                                                         Health (HH)
                                                         Quality
                                                         Reporting
                                                         Program (QRP).
ED Use................................................  Emergency
                                                         Department Use
                                                         without
                                                         Hospitalization
                                                         During the
                                                         First 60 Days
                                                         of HH (NQF
                                                         #0173).
ED Use without Readmission............................  Emergency
                                                         Department Use
                                                         without
                                                         Hospital
                                                         Readmission
                                                         During the
                                                         First 30 Days
                                                         of HH (NQF
                                                         #2505).
MSPB..................................................  Total Estimated
                                                         Medicare
                                                         Spending Per
                                                         Beneficiary
                                                         (MSPB)--Post
                                                         Acute Care
                                                         (PAC) HH QRP.
PPR...................................................  Potentially
                                                         Preventable 30-
                                                         Day Post-
                                                         Discharge
                                                         Readmission
                                                         Measure for HH
                                                         Quality
                                                         Reporting
                                                         Program.

[[Page 32442]]

 
Rehospitalization.....................................  Rehospitalizatio
                                                         n During the
                                                         First 30 Days
                                                         of HH (NQF
                                                         #2380).
-------------------------------------------------------
                              HHCAHPS-Based
------------------------------------------------------------------------
Communication.........................................  How well did the
                                                         home health
                                                         team
                                                         communicate
                                                         with patients.
Overall Rating........................................  How do patients
                                                         rate the
                                                         overall care
                                                         from the home
                                                         health agency.
Professional Care.....................................  How often the
                                                         home health
                                                         team gave care
                                                         in a
                                                         professional
                                                         way.
Team Discussion.......................................  Did the home
                                                         health team
                                                         discuss
                                                         medicines,
                                                         pain, and home
                                                         safety with
                                                         patients.
Willing to Recommend..................................  Will patients
                                                         recommend the
                                                         home health
                                                         agency to
                                                         friends and
                                                         family.
------------------------------------------------------------------------

E. Proposed Removal of HH QRP Measures Beginning With the CY 2021 HH 
QRP

    To address the Meaningful Measures Initiative described in section 
I.D.1 of this proposed rule, we are proposing to remove seven measures 
from the HH QRP beginning with the CY 2021 HH QRP.
1. Proposed Removal of the Depression Assessment Conducted Measure
    We are proposing to remove the Depression Assessment Conducted 
Measure from the HH QRP beginning with the CY 2021 HH QRP under our 
proposed Factor 1. Measure performance among HHAs is so high and 
unvarying that meaningful distinctions in improvements in performance 
can no longer be made.
    In the CY 2010 HH PPS final rule (74 FR 58096 through 58098), we 
adopted the Depression Assessment Conducted Measure beginning with the 
CY 2010 HH QRP. Depression in the elderly is associated with 
disability, impaired well-being, service utilization,\68\ and 
mortality.\69\ This process measure reports the percentage of HH 
episodes in which patients were screened for depression (using a 
standardized depression screening tool) at start of care/resumption of 
care (SOC/ROC). The measure is calculated solely using the OASIS Item 
M1730, Depression Screening.\70\ Item M1730 is additionally used at 
SOC/ROC as a risk adjuster in the calculation of several other OASIS-
based outcome measures currently adopted for the HH QRP.\71\
---------------------------------------------------------------------------

    \68\ Beekman A.T., Deeg D.J., Braam A.W., et al.: Consequences 
of major and minor depression in later life: A study of disability, 
well-being and service utilization. Psychological Medicine 27:1397-
1409, 1997.
    \69\ Schulz, R., Beach, S.R., Ives, D.G., Martire, L.M., Ariyo, 
A.A., & Kop, W.J. (2000). Association between depression and 
mortality in older adults--The Cardiovascular Health Study. Archives 
of Internal Medicine, 160(12), 1761-1768.
    \70\ Measure specifications can be found in the Home Health 
Process Measures Table on the Home Health Quality Measures website 
(https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-Process-Measures-Table_OASIS-C2_4-11-18.pdf).
    \71\ The OASIS-based HH QRP outcome measures that use OASIS Item 
M1730 as a risk adjuster in the calculation of the measure are: 
Improvement in Bathing (NQF #0174), Improvement in Bed Transferring 
(NQF #0175), Improvement in Ambulation/Locomotion (NQF #0167), 
Improvement in Dyspnea, Improvement in Pain Interfering with 
Activity (NQF #0177), Improvement in Management of Oral Medications 
(NQF #0176), and Improvement in Status of Surgical Wounds (NQF 
#0178).
---------------------------------------------------------------------------

    In our evaluation of the Depression Assessment Conducted Measure, 
we found that HHA performance is very high and that meaningful 
distinctions in improvements in performance cannot be made. The mean 
and median agency performance scores for this measure in 2017 (96.8 
percent and 99.2 percent, respectively) when compared to the mean and 
median agency performance scores for this measure in 2010 (88.0 percent 
and 96.6 percent, respectively) indicate that an overwhelming majority 
of patients are screened for depression in the HH setting. Further, 
these performance scores demonstrate the improvement in measure 
performance since its adoption in the HH QRP. In addition, in 2017 the 
75th percentile measure score (100 percent) and the 90th percentile 
measure score (100 percent) are statistically indistinguishable from 
each other, meaning that the measure scores do not meaningfully 
distinguish scores between HHAs. Further, the Truncated Coefficient of 
Variation (TCV) \72\ for this measure is 0.03, suggesting that it is 
not useful to draw distinctions between individual agency performance 
scores for this measure.
---------------------------------------------------------------------------

    \72\ The truncated coefficient of variation (TCV) is the ratio 
of the standard deviation to the mean of the distribution of all 
scores, excluding the 5 percent most extreme scores. A small TCV (<= 
0.1) indicates that the distribution of individual scores is 
clustered tightly around the mean value, suggesting that it is not 
useful to draw distinctions between individual performance scores.
---------------------------------------------------------------------------

    For these reasons, we are proposing to remove the Depression 
Assessment Conducted Measure from the HH QRP beginning with the CY 2021 
HH QRP under our proposed Factor 1. Measure performance among HHAs is 
so high and unvarying that meaningful distinctions in improvements in 
performance can no longer be made.
    If finalized as proposed, HHAs would no longer be required to 
submit OASIS Item M1730, Depression Screening at SOC/ROC for the 
purposes of this measure beginning January 1, 2020. HHAs would however 
continue to submit data on M1730 at the time point of SOC/ROC as a risk 
adjuster for several other OASIS-based outcome measures currently 
adopted for the HH QRP.\73\ If finalized as proposed, data for this 
measure would be publicly reported on HH Compare until January 2021.
---------------------------------------------------------------------------

    \73\ The OASIS-based HH QRP outcome measures that use OASIS Item 
M1730 as a risk adjuster in the calculation of the measure are: 
Improvement in Bathing (NQF #0174), Improvement in Bed Transferring 
(NQF #0175), Improvement in Ambulation/Locomotion (NQF #0167), 
Improvement in Dyspnea, Improvement in Pain Interfering with 
Activity (NQF #0177), Improvement in Management of Oral Medications 
(NQF #0176), and Improvement in Status of Surgical Wounds (NQF 
#0178).
---------------------------------------------------------------------------

    We are inviting public comment on this proposal.
2. Proposed Removal of the Diabetic Foot Care and Patient/Caregiver 
Education Implemented During All Episodes of Care Measure
    We are proposing to remove the Diabetic Foot Care and Patient/
Caregiver Education Implemented during All Episodes of Care Measure 
from the HH QRP beginning with the CY 2021 HH QRP under our proposed 
Factor 1. Measure performance among HHAs is so high and unvarying that 
meaningful distinctions in improvements in performance can no longer be 
made.
    In the CY 2010 HH PPS final rule (74 FR 58096 through 58098), we 
adopted the Diabetic Foot Care and Patient/Caregiver Education 
Implemented during All Episodes of Care Measure beginning with the CY 
2010 HH QRP. This process measure reports the percentage of HH quality 
episodes in which diabetic foot care and patient/caregiver education 
were included in the physician-ordered plan of care and

[[Page 32443]]

implemented (at the time of or at any time since the most recent SOC/
ROC assessment). The measure numerator is calculated using OASIS Item 
M2401 row a, Intervention Synopsis: Diabetic foot care.\74\
---------------------------------------------------------------------------

    \74\ Measure specifications can be found in the Home Health 
Process Measures Table on the Home Health Quality Measures website 
(https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-Process-Measures-Table_OASIS-C2_4-11-18.pdf).
---------------------------------------------------------------------------

    In our evaluation of the Diabetic Foot Care and Patient/Caregiver 
Education Implemented during All Episodes of Care Measure, we found 
that HHA performance is very high and that meaningful distinctions in 
improvements in performance cannot be made. The mean and median agency 
performance scores for this measure in 2017 (97.0 percent and 99.2 
percent, respectively) when compared to the mean and median agency 
performance score for this measure in 2010 (86.2 percent and 91.7 
percent, respectively), indicate that an overwhelming majority of HH 
episodes for patients with diabetes included education on foot care. 
Further, these scores demonstrate the improvement in measure 
performance since the Diabetic Foot Care and Patient/Caregiver 
Education Implemented during All Episodes of Care Measure's adoption in 
the HH QRP. In addition, in 2017 the 75th percentile measure score (100 
percent) and the 90th percentile score (100 percent) are statistically 
indistinguishable from each other, meaning that the measure scores do 
not meaningfully distinguish between HHAs. Further, the TCV for this 
measure is 0.03, suggesting that it is not useful to draw distinctions 
between individual agency performance scores for this measure.
    For these reasons, we are proposing to remove the Diabetic Foot 
Care and Patient/Caregiver Education Implemented during All Episodes of 
Care Measure from the HH QRP beginning with CY 2021 HH QRP under our 
proposed Factor 1. Measure performance among HHAs is so high and 
unvarying that meaningful distinctions in improvements in performance 
can no longer be made.
    If finalized as proposed, HHAs would no longer be required to 
submit OASIS Item M2401 row a, Intervention Synopsis: Diabetic foot 
care at the time point of Transfer to an Inpatient Facility (TOC) and 
Discharge from Agency--Not to an Inpatient Facility (Discharge) for the 
purposes of the HH QRP beginning January 1, 2020. HHAs may enter an 
equal sign (=) for M2401, row a, at the time point of TOC and Discharge 
on or after January 1, 2020. If finalized as proposed, data for this 
measure would be publicly reported on HH Compare until January 2021.
    We are inviting public comment on this proposal.
3. Proposed Removal of the Multifactor Fall Risk Assessment Conducted 
for All Patients Who Can Ambulate (NQF #0537) Measure
    We are proposing to remove the Multifactor Fall Risk Assessment 
Conducted for All Patients Who Can Ambulate (NQF #0537) Measure from 
the HH QRP beginning with the CY 2021 HH QRP, under our proposed Factor 
1. Measure performance among HHAs is so high and unvarying that 
meaningful distinctions in improvements in performance can no longer be 
made.
    In CY 2010 HH PPS final rule (74 FR 58096 through 58098), we 
adopted the Multifactor Fall Risk Assessment Conducted for All Patients 
Who Can Ambulate (NQF #0537) Measure \75\ beginning with the CY 2010 HH 
QRP. This process measure reports the percentage of HH quality episodes 
in which patients had a multifactor fall risk assessment at SOC/ROC. 
The measure is calculated using OASIS Item M1910, Falls Risk 
Assessment.\76\
---------------------------------------------------------------------------

    \75\ At the time, this measure was adopted as ``Falls risk 
assessment for patients 65 and older.'' The name of this measure was 
updated in the CY 2018 HH PPS final rule (82 FR 51717).
    \76\ Measure specifications can be found in the Home Health 
Process Measures Table on the Home Health Quality Measures website 
(https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-Process-Measures-Table_OASIS-C2_4-11-18.pdf).
---------------------------------------------------------------------------

    In our evaluation of the Multifactor Fall Risk Assessment Conducted 
for All Patients Who Can Ambulate (NQF #0537) Measure, we found that 
HHA performance is very high and that meaningful distinctions in 
improvements in performance cannot be made. The mean and median agency 
performance scores for this measure in 2017 (99.3 percent and 100.0 
percent, respectively) when compared to the mean and median agency 
performance score for this measure in 2010 (94.8 percent and 98.9 
percent, respectively), indicate that an overwhelming majority of 
patients in an HHA have had a multifactor fall risk assessment at SOC/
ROC and demonstrates the improvement in measure performance since its 
adoption. In addition, in 2017 the 75th percentile measure score (100 
percent) and the 90th percentile measure score (100 percent) are 
statistically indistinguishable from each other, meaning that the 
measure scores do not meaningfully distinguish between HHAs. Further, 
the TCV for this measure is 0.01, suggesting that it is not useful to 
draw distinctions between individual agency performance scores for this 
measure.
    For these reasons, we are proposing to remove the Multifactor Fall 
Risk Assessment Conducted for All Patients Who Can Ambulate (NQF #0537) 
Measure from the HH QRP beginning with the CY 2021 HH QRP, under our 
proposed Factor 1. Measure performance among HHAs is so high and 
unvarying that meaningful distinctions in improvements in performance 
can no longer be made.
    If finalized as proposed, HHAs would no longer be required to 
submit OASIS Item M1910, Falls Risk Assessment at SOC/ROC beginning 
January 1, 2020. HHAs may enter an equal sign (=) for M1910 at the time 
point of SOC and ROC beginning January 1, 2020. If finalized as 
proposed, data for this measure would be publicly reported on HH 
Compare until January 2021.
    We are inviting public comment on this proposal.
4. Proposed Removal of the Pneumococcal Polysaccharide Vaccine Ever 
Received Measure
    We are proposing to remove the Pneumococcal Polysaccharide Vaccine 
Ever Received Measure from the HH QRP beginning with the CY 2021 HH 
QRP, under our proposed Factor 3. A measure does not align with current 
clinical guidelines or practice.
    In the CY 2010 HH PPS final rule (74 FR 58096 through 58098), we 
adopted the Pneumococcal Polysaccharide Vaccine Ever Received Measure 
beginning with CY 2010 HH QRP. This process measure reports the 
percentage of HH quality episodes during which patients were determined 
to have ever received the Pneumococcal Polysaccharide Vaccine. The 
measure is calculated using OASIS Items M1051, Pneumococcal Vaccine and 
M1056, Reason Pneumococcal Vaccine not received.\77\
---------------------------------------------------------------------------

    \77\ Measure specifications can be found in the Home Health 
Process Measures Table on the Home Health Quality Measures website 
(https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-Process-Measures-Table_OASIS-C2_4-11-18.pdf).
---------------------------------------------------------------------------

    At the time that this measure was adopted in the HH QRP, the 
Advisory Committee on Immunization Practices (ACIP),\78\ which sets 
current clinical

[[Page 32444]]

guidelines, recommended use of a single dose of the 23-valent 
pneumococcal polysaccharide vaccine (PPSV23) among all adults aged 65 
years and older and those adults aged 19 to 64 years with underlying 
medical conditions that put them at greater risk for serious 
pneumococcal infection.\79\
---------------------------------------------------------------------------

    \78\ The Advisory Committee on Immunization Practices was 
established under section 222 of the Public Health Service Act (42 
U.S.C. 2l7a), as amended, to assist states and their political 
subdivisions in the prevention and control of communicable diseases; 
to advise the states on matters relating to the preservation and 
improvement of the public's health; and to make grants to states 
and, in consultation with the state health authorities, to agencies 
and political subdivisions of states to assist in meeting the costs 
of communicable disease control programs. (Charter of the Advisory 
Committee on Immunization Practices, filed April 1, 2018. https://www.cdc.gov/vaccines/acip/committee/ACIP-Charter-2018.pdf.)
    \79\ Prevention of Pneumococcal Disease: Recommendations of the 
Advisory Committee on Immunization Practices (ACIP), MMWR 1997;46:1-
24.
---------------------------------------------------------------------------

    Since this measure was added to the HH QRP, the ACIP has updated 
its pneumococcal vaccination recommendations.\80\ Two pneumococcal 
vaccines are currently licensed for use in the United States: the 13-
valent pneumococcal conjugate vaccine (PCV13) and the 23-valent 
pneumococcal vaccine (PPSV23). The ACIP currently recommends that both 
PCV13 and PPSV23 be given to all immunocompetent adults aged >= 65 
years. The recommended intervals for sequential administration of PCV13 
and PPSV23 depend on several patient factors including: The current age 
of the adult, whether the adult had previously received PPSV23, and the 
age of the adult at the time of prior PPSV23 vaccination (if 
applicable).
---------------------------------------------------------------------------

    \80\ Tomczyk S., Bennett N.M., Stoecker C., et al. Use of 13-
valent pneumococcal conjugate vaccine and 23-valent pneumococcal 
polysaccharide vaccine among adults aged >=65 years: recommendations 
of the Advisory Committee on Immunization Practices (ACIP). MMWR 
2014;63: 822-5.
---------------------------------------------------------------------------

    The specifications for the Pneumococcal Polysaccharide Vaccine Ever 
Received Measure do not fully reflect the current ACIP guidelines. 
Therefore, we believe that the Pneumococcal Polysaccharide Vaccine Ever 
Received Measure no longer aligns with the current clinical guidelines 
or practice. For this reason, we are proposing to remove the 
Pneumococcal Polysaccharide Vaccine Ever Received Measure from the HH 
QRP beginning with the CY 2021 HH QRP under our proposed Factor 3. A 
measure does not align with current clinical guidelines or practice.
    If finalized as proposed, HHAs would no longer be required to 
submit OASIS Items M1051, Pneumococcal Vaccine and M1056, Reason 
Pneumococcal Vaccine not received at the time point of TOC and 
Discharge for the purposes of the HH QRP beginning January 1, 2020. 
HHAs may enter an equal sign (=) for Items M1051 and M1056 at the time 
point of TOC and Discharge on or after January 1, 2020. If finalized as 
proposed, data for this measure would be publicly reported on HH 
Compare until January 2021.
    We are inviting public comment on this proposal.
5. Proposed Removal of the Improvement in the Status of Surgical Wounds 
Measure
    We are proposing to remove the Improvement in the Status of 
Surgical Wounds Measure from the HH QRP beginning with the CY 2021 HH 
QRP under our proposed Factor 4. A more broadly applicable measure 
(across settings, populations, or conditions) for the particular topic 
is available.
    In the CY 2008 HH PPS final rule (72 FR 49861 through 49863), we 
adopted the Improvement in the Status of Surgical Wounds Measure for 
the HH QRP beginning with the CY 2008 program year. This risk-adjusted 
outcome measure reports the percentage of HH episodes of care during 
which the patient demonstrates an improvement in the condition of skin 
integrity related to the surgical wounds. This measure is solely 
calculated using OASIS Items M1340, Does this patient have a Surgical 
Wound? and M1342, Status of Most Problematic Surgical Wound that is 
Observable.\81\ Items M1340 and M1342 are also used at the time points 
of SOC/ROC as risk adjusters in the calculation of several other OASIS-
based outcome measures currently adopted for the HH QRP \82\ 
Additionally, Items M1340 and M1342 are used at the time point of 
Discharge for the Potentially Avoidable Events measure Discharged to 
the Community Needing Wound Care or Medication Assistance that is used 
by HH surveyors during the survey process.\83\
---------------------------------------------------------------------------

    \81\ Measure specifications can be found in the Home Health 
Outcomes Measures Table on the Home Health Quality Measures website 
(https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-Outcome-Measures-Table-OASIS-C2_4-11-18.pdf).
    \82\ The OASIS-based HH QRP outcome measures that use OASIS 
Items M1340 and M1342 as a risk adjuster in the calculation of the 
measure are: Improvement in Bathing (NQF #0174), Improvement in Bed 
Transferring (NQF #0175), Improvement in Ambulation/Locomotion (NQF 
#0167), Improvement in Dyspnea, Improvement in Pain Interfering with 
Activity (NQF #0177), and Improvement in Management of Oral 
Medications (NQF #0176).
    \83\ Measure specifications can be found in the Home Health 
Potentially Avoidable Events Measures Table on the Home Health 
Quality Measures website (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-PAE-Measures-Table-OASIS-C2_4-11-18.pdf).
---------------------------------------------------------------------------

    The Improvement in the Status of Surgical Wounds Measure is limited 
in scope to surgical wounds incurred by surgical patients and excludes 
HH episodes of care where the patient, at SOC/ROC, did not have any 
surgical wounds or had only a surgical wound that was unobservable or 
fully epithelialized. As a result, the majority of HHAs are not able to 
report data on the measure and the measure is limited in its ability to 
compare how well HHAs address skin integrity. For example, in 2016, 
only 13 percent of HH patients had a surgical wound at the beginning of 
their HH episode and only 36.6 percent of HHAs were able to report data 
on the measure with respect to that year.
    In contrast, the Percent of Residents or Patients with Pressure 
Ulcers That Are New or Worsened (Short Stay) Measure (NQF #0678) \84\ 
and its replacement measure, Changes in Skin Integrity Post-Acute Care: 
Pressure Ulcer/Injury Measure more broadly assess the quality of care 
furnished by HHAs with respect to skin integrity. These measures 
encourage clinicians to assess skin integrity in the prevention of 
pressure ulcers, as well as to monitor and promote healing in all HH 
patients, not just those with surgical wounds.
---------------------------------------------------------------------------

    \84\ To be replaced with a modified version of that measure, 
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury, 
beginning with the CY 2020 HH QRP.
---------------------------------------------------------------------------

    Therefore, we are proposing to remove the Improvement in the Status 
of Surgical Wounds Measure from the HH QRP beginning with the CY 2021 
HH QRP under our proposed Factor 4. A more broadly applicable measure 
(across settings, populations, or conditions) for the particular topic 
is available.
    If finalized as proposed, HHAs would no longer be required to 
submit OASIS Items M1340, Does this patient have a Surgical Wound? and 
M1342, Status of Most Problematic Surgical Wound that is Observable at 
the time points of SOC/ROC and Discharge for the purposes of this 
measure beginning with January 1, 2020 episodes of care. However, HHAs 
would still be required to submit data on Items M1340 and M1342 at the 
time point of SOC/ROC as risk adjusters for several other OASIS-based 
outcome measures currently adopted for the HH QRP,\85\ and also at the 
time point of

[[Page 32445]]

Discharge for the Potentially Avoidable Events measure Discharged to 
the Community Needing Wound Care or Medication Assistance \86\ that is 
used by HH surveyors during the survey process. If finalized as 
proposed, data on this measure would be publicly reported on HH Compare 
until January 2021.
---------------------------------------------------------------------------

    \85\ The OASIS-based HH QRP outcome measures that use OASIS 
Items M1340 and M1342 as a risk adjuster in the calculation of the 
measure are: Improvement in Bathing (NQF #0174), Improvement in Bed 
Transferring (NQF #0175), Improvement in Ambulation/Locomotion (NQF 
#0167), Improvement in Dyspnea, Improvement in Pain Interfering with 
Activity (NQF #0177), and Improvement in Management of Oral 
Medications (NQF #0176).
    \86\ Measure specifications can be found in the Home Health 
Potentially Avoidable Events Measures Table on the Home Health 
Quality Measures website (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-PAE-Measures-Table-OASIS-C2_4-11-18.pdf).
---------------------------------------------------------------------------

    We are inviting public comment on this proposal.
6. Proposed Removal of the Emergency Department Use Without Hospital 
Readmission During the First 30 Days of HH (NQF #2505) Measure
    We are proposing to remove the Emergency Department (ED) Use 
without Hospital Readmission during the First 30 Days of HH (NQF #2505) 
Measure from the HH QRP beginning with the CY 2021 HH QRP, under our 
proposed Factor 4. A more broadly applicable measure (across settings, 
populations, or conditions) for the particular topic is available).
    In the CY 2014 HH PPS final rule (78 FR 72298 through 72301), we 
adopted the claims-based ED Use without Hospital Readmission during the 
first 30 days of HH (NQF #2505) Measure beginning with CY 2014 HH QRP. 
The particular topic for this measure is ED utilization, as it 
estimates the risk-standardized rate of ED use without acute care 
hospital admission during the 30 days following the start of the HH 
stay for patients with an acute inpatient hospitalization in the 5 days 
before the start of their HH stay. The ED Use without Hospital 
Readmission during the First 30 Days of HH (NQF #2505) Measure is 
limited to Medicare FFS patients with a prior, proximal inpatient stay. 
Recent analyses from 2016 and 2017 show that this measure annually 
captured approximately 2.5 million (25.1 percent in 2016 and 25.1 
percent in 2017) of Medicare FFS HH stays and was reportable for less 
than two-thirds of the HHAs (62.1 percent in 2016 and 62.6 percent in 
2017).
    The ED Use without Hospitalization During the First 60 Days of HH 
(NQF #0173) Measure also addresses the topic of ED utilization during a 
HH stay. This measure reports the percentage of Medicare FFS HH stays 
in which patients used the ED but were not admitted to the hospital 
during the 60 days following the start of the HH stay. The ED Use 
without Hospitalization during the First 60 days of HH (NQF #0173) 
Measure includes Medicare FFS patients irrespective of whether or not 
they had an acute inpatient hospitalization in the five days prior to 
the start of the HH stay and spans the first 60 days of a HH episode. 
Recent analyses using 2016 and 2017 data show this measure annually 
captures approximately 8.3 million stays (81.9 percent in 2016 and 81.8 
percent in 2017) and is reportable by a greater number of HHAs (88.8 
percent in 2016 and 88.1 percent in 2017) than the ED Use without 
Hospital Readmission During the First 30 Days of HH (NQF #2505) 
Measure.
    The ED Use without Hospital Readmission During the First 30 Days of 
HH (NQF #2505) Measure addresses outcomes of Medicare FFS patients for 
a 30-day interval after the start of their HH care, regardless of the 
length of their HH stay. The more broadly applicable ED Use without 
Hospitalization during the First 60 days of HH (NQF #0173) Measure 
addresses these same outcomes for a greater number of Medicare FFS 
patients during the first 60 days of a HH stay and includes the 30-day 
interval of the ED Use without Hospital Readmission During the First 30 
Days of HH (NQF #2505) Measure. The measure specifications for both 
measures are otherwise harmonized along several measure dimensions, 
including data source, population, denominator exclusions, numerator, 
and risk adjustment methodology. As a result, removing the ED Use 
without Hospital Readmission During the First 30 Days of HH (NQF #2505) 
Measure in favor of the ED Use without Hospitalization during the First 
60 days of HH (NQF #173) Measure will not result in a loss of the 
ability to measure the topic of ED utilization for HH patients.
    For these reasons, we are proposing to remove the ED Use without 
Hospital Readmission During the First 30 Days of HH (NQF #2505) Measure 
from the HH QRP beginning with the CY 2021 HH QRP under our proposed 
Factor 4. A more broadly applicable measure (across settings, 
populations, or conditions) for the particular topic is available. If 
finalized as proposed, data for this measure would be reported on HH 
Compare until January 2020.
    We are inviting public comment on this proposal.
7. Proposed Removal of the Rehospitalization During the First 30 Days 
of HH (NQF #2380) Measure
    We are proposing to remove the Rehospitalization during the First 
30 Days of HH (NQF #2380) Measure from the HH QRP beginning with the CY 
2021 HH QRP, under our proposed Factor 4. A more broadly applicable 
measure (across settings, populations, or conditions) for the 
particular topic is available.
    In the CY 2014 HH PPS final rule (78 FR 72297 through 72301), we 
adopted the claims-based Rehospitalization during the first 30 Days of 
HH Measure beginning with the CY 2014 HH QRP. The measure was NQF-
endorsed (NQF #2380) in December 2014. The Rehospitalization during the 
first 30 Days of HH (NQF #2380) Measure addresses the particular topic 
of acute care hospital utilization during a HH stay. This measure 
estimates the risk-standardized rate of unplanned, all-cause hospital 
readmissions for patients who had an acute inpatient hospitalization in 
the 5 days before the start of their HH stay and were admitted to an 
acute care hospital during the 30 days following the start of the HH 
stay (78 FR 72297 through 72301). The Rehospitalization During the 
First 30 Days of HH (NQF #2380) Measure only includes Medicare FFS 
patients. Recent analyses from 2016 and 2017 show that this measure 
annually captured approximately 2.5 million (25.1 percent in 2016 and 
25.1 percent in 2017) of Medicare FFS HH stays and was reportable for 
less than two-thirds of the HHAs (62.1 percent in 2016 and 62.6 percent 
in 2017).
    In the CY 2013 HH PPS final rule (77 FR 67093 through 67094), we 
finalized the claims-based Acute Care Hospitalization Measure. The 
measure's title was later updated to Acute Care Hospitalization During 
the First 60 Days of HH (NQF #0171) to improve clarity.\87\ The Acute 
Care Hospitalization During the First 60 Days of HH (NQF #0171) Measure 
also addresses the topic of acute care hospital utilization during a HH 
stay. This measure reports the percentage of HH stays in which Medicare 
FFS patients were admitted to an acute care hospital during the 60 days 
following the start of the HH stay. The Acute Care Hospitalization 
during the First 60 Days of HH (NQF #0171) Measure includes Medicare 
FFS patients irrespective of whether or not

[[Page 32446]]

they had an acute inpatient hospitalization in the five days prior to 
the start of the HH stay and spans the first 60 days of a HH episode. 
Recent analyses using 2016 and 2017 data show this measure annually 
captures approximately 8.3 million stays (81.9 percent in 2016 and 81.8 
percent in 2017) and is reportable by a greater number of HHAs (88.8 
percent in 2016 and 88.1 percent in 2017) than the Rehospitalization 
during the First 30 Days of HH (NQF #2380) Measure.
---------------------------------------------------------------------------

    \87\ All-Cause Admissions and Readmissions 2015-2017 Technical 
Report, National Quality Forum, Washington DC, 2017. (http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=85033) page 20.
---------------------------------------------------------------------------

    The Rehospitalization during the First 30 Days of HH (NQF #2380) 
Measure addresses outcomes of Medicare FFS patients for a 30-day 
interval after the start of their HH care, regardless of the length of 
their HH stay. In contrast, the Acute Care Hospitalization During the 
First 60 Days of HH (NQF #0171) Measure is broader because it addresses 
these same outcomes for a greater number of Medicare FFS patients 
during the first 60 Days of a HH stay, which includes the 30-day 
interval of the Rehospitalization during the First 30 Days of HH (NQF 
#2380) Measure. The measure specifications for both measures are 
otherwise harmonized along several measure dimensions, including data 
source, population, denominator exclusions, numerator, and risk 
adjustment methodology. As a result, removing the Rehospitalization 
during the First 30 Days of HH (NQF #2380) Measure in favor of the 
Acute Care Hospitalization during the First 60 Days of HH (NQF #0171) 
Measure will not result in a loss of the ability to measure the topic 
of acute care hospital utilization across the HH setting.
    For these reasons, we are proposing to remove the Rehospitalization 
during the First 30 Days of HH (NQF #2380) Measure from the HH QRP 
beginning with the CY 2021 HH QRP under our proposed Factor 4. A more 
broadly applicable measure (across settings, populations, or 
conditions) for particular topic is available. If finalized as 
proposed, data for this measure would be publicly reported on HH 
Compare January 2020.
    We are inviting public comment on this proposal.

F. IMPACT Act Implementation Update

    In the CY 2018 HH PPS final rule (82 FR 51731), we stated that we 
intended to specify two measures that would satisfy the domain of 
accurately communicating the existence and provision of the transfer of 
health information and care preferences under section 1899B(c)(1)(E) of 
the Act no later than January 1, 2019 and intend to propose to adopt 
them for the CY 2021 HH QRP, with data collection beginning on or about 
January 1, 2020.
    As a result of the input provided during a public comment period 
between November 10, 2016 and December 11, 2016, input provided by a 
technical expert panel (TEP) convened by our contractor, and pilot 
measure testing conducted in 2017, we are engaging in continued 
development work on these two measures, including supplementary measure 
testing and providing the public with an opportunity for comment in 
2018. Further, we reconvened a TEP for these measures in April 2018. We 
now intend to specify the measures under section 1899B(c)(1)(E) of the 
Act no later than January 1, 2020, and intend to propose to adopt the 
measures beginning with the CY 2022 HH QRP, with data collection at the 
time point of SOC, ROC and Discharge beginning with January 1, 2021. 
For more information on the pilot testing, we refer readers to: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Post-Acute-Care-Quality-Initiatives/IMPACT-Act-of-2014/IMPACT-Act-Downloads-and-Videos.html.

G. Form, Manner, and Timing of OASIS Data Submission

    Our home health regulations, codified at Sec.  484.250(a), require 
HHAs to submit OASIS assessments and Home Health Care Consumer 
Assessment of Healthcare Providers and Systems Survey[supreg] (HHCAHPS) 
data to meet the quality reporting requirements of section 
1895(b)(3)(B)(v) of the Act. We are proposing to revise Sec.  
484.250(a) to clarify that not all OASIS data described in Sec.  
484.55(b) and (d) are needed for purposes of complying with the 
requirements of the HH QRP. OASIS data items may be submitted for other 
established purposes unrelated to the HH QRP, including payment, 
survey, the HH VBP Model, or care planning. Any OASIS data that are not 
submitted for the purposes of the HH QRP are not used for purposes of 
HH QRP compliance.
    We are inviting public comment on our proposal to revise our 
regulations at Sec.  484.250(a) to clarify that not all OASIS data 
described in Sec.  484.55(b) and (d) are needed for purposes of 
complying with the requirements of the HH QRP.

H. Proposed Policies Regarding Public Display for the HH QRP

    Section 1899B(g) of the Act requires that data and information of 
PAC provider performance on quality measures and resource use and other 
measures be made publicly available beginning not later than 2 years 
after the applicable specified `application date'. In the CY 2018 HH 
PPS final rule (82 FR 51740 through 51741), we finalized that we would 
publicly display the Medicare Spending Per Beneficiary (MSPB)-PAC HH 
QRP beginning in CY 2019 based on one year of claims data on discharges 
from CY 2017.
    In this proposed rule, we are proposing to increase the number of 
years of data used to calculate the MSPB-PAC HH QRP for purposes of 
display from 1 year to 2 years. Under this proposal, data on this 
measure would be publicly reported in CY 2019, or as soon thereafter as 
operationally feasible, based on discharges from CY 2016 and CY 2017. 
Increasing the measure calculation and public display periods from 1 to 
2 years of data increases the number of HHAs with enough data adequate 
for public reporting for the MSPB-PAC HH QRP measure from 90.7 percent 
(based on August 1st, 2014--July 31st, 2015 Medicare FFS claims data) 
to 94.9 percent (based on August 1st, 2014--July 31st, 2016 Medicare 
FFS claims data). Increasing measure public display periods to 2 years 
also aligns with the public display periods of these measures in the 
IRF QRP, LTCH QRP and SNF QRP.
    We invite public comment on our proposal to increase the number of 
years of data used to calculate the MSPB-PAC HH QRP for purposes of 
display from 1 year to 2 years.

I. Home Health Care Consumer Assessment of Healthcare Providers and 
Systems[supreg] (HHCAHPS)

    We are not proposing changes to the Home Health Care Consumer 
Assessment of Healthcare Providers and Systems[supreg] (HHCAHPS) Survey 
requirements for CY 2019. Therefore, HHCAHPS Survey requirements are as 
codified in Sec.  484.250 and the HHCAHPS survey vendors' data 
submission deadlines are as posted on HHCAHPS website at https://homehealthcahps.org.

VI. Medicare Coverage of Home Infusion Therapy Services

    In this section of the rule, we discuss the new home infusion 
therapy benefit that was established in section 5012 of the 21st 
Century Cures Act. This benefit covers the nursing, patient training 
and education, and monitoring services associated with administering 
infusion drugs in a patient's home. This proposed rule would establish 
health and safety standards for home infusion therapy and consistency 
in coverage for home infusion therapy services. Section 
1861(iii)(3)(D)(III) of the Act, as added

[[Page 32447]]

by section 5012(b) of the 21st Cures Act, requires that a qualified 
home infusion therapy supplier be accredited by an accrediting 
organization (AO) designated by the Secretary in accordance with 
section 1834(u)(5) of the Act. Section 1834(u)(5)(A) of the Act 
identifies factors for designating AOs and modifying the list of 
designated AOs. Section 1834(u)(5)(B) of the Act requires the Secretary 
to designate AOs to accredit home infusion therapy suppliers furnishing 
home infusion therapy not later than January 1, 2021. In addition, this 
proposed rule establishes regulations for the approval and oversight of 
accrediting organizations that provide accreditation to home infusion 
therapy suppliers. This rule also provides information on temporary 
transitional payments for home infusion therapy services for CYs 2019 
and 2020, as mandated by section 50401 of the BBA of 2018, proposes a 
regulatory definition of ``Infusion Drug Administration Calendar Day'', 
and solicits comments regarding payment for home infusion therapy 
services for CY 2021 and subsequent years as required by section 
5012(d) of the 21st Century Cures Act.

A. General Background

1. Overview
    Infusion drugs and administration services can be provided in 
multiple health care settings, including inpatient hospitals, skilled 
nursing facilities (SNFs), hospital outpatient departments (HOPDs), 
physician offices, and in the home. Traditional Fee-for-Service (FFS) 
Medicare provides coverage for infusion drugs, equipment, supplies, and 
administration services. However, Medicare coverage requirements and 
payment vary for each of these settings. Infusion drugs, equipment, 
supplies, and administration are all covered by Medicare in the 
inpatient hospital, SNFs, HOPDs, and physician's offices. Generally, 
Medicare payment under Part A for the drugs, equipment, supplies, and 
services are bundled, meaning a single payment is made on the basis of 
expected costs for clinically-defined episodes of care. For example, if 
a beneficiary is receiving an infusion drug during an inpatient 
hospital stay, the Part A payment for the drug, supplies, equipment, 
and drug administration is included in the diagnosis-related group 
(DRG) payment to the hospital under the Medicare inpatient prospective 
payment system. Beneficiaries are liable for the Medicare inpatient 
hospital deductible. Similarly, if a beneficiary is receiving an 
infusion drug while in a SNF under a Part A stay, the payment for the 
drug, supplies, equipment, and drug administration are included in the 
SNF prospective payment system payment. After 20 days of SNF care, 
there is a daily beneficiary cost-sharing amount through day 100 when 
the beneficiary becomes responsible for all costs for each day after 
day 100 of the benefit period. Under Medicare Part B, certain items and 
services are paid separately while other items and services may be 
packaged into a single payment together. For example, in an HOPD and in 
a physician's office, the drug is paid separately, generally at the 
average sales price (ASP) plus 6 percent. There is also a separate 
payment for drug administration in which the payment for infusion 
supplies and equipment is packaged in the payment for administration. 
The separate payment for infusion drug administration in an HOPD and in 
a physician's office generally includes a base payment amount for the 
first hour and a payment add-on that is a different amount for each 
additional hour of administration. The beneficiary is responsible for 
the 20 percent coinsurance under Medicare Part B. Medicare FFS covers 
outpatient infusion drugs under Part B, ``incident to'' a physician's 
services, provided the drugs are not usually self- administered by the 
patient. Drugs that are ``not usually self-administered,'' are defined 
in our manual according to how the Medicare population as a whole uses 
the drug, not how an individual patient or physician may choose to use 
a particular drug. For the purpose of this exclusion, the term 
``usually'' means more than 50 percent of the time for all Medicare 
beneficiaries who use the drug. The term ``by the patient'' means 
Medicare beneficiaries as a collective whole. Therefore, if a drug is 
self-administered by more than 50 percent of Medicare beneficiaries, 
the drug is excluded from Part B coverage. This determination is made 
on a drug-by-drug basis, not on a beneficiary-by-beneficiary basis.\88\ 
The MACs update Self-Administered Drug (SAD) exclusion lists on a 
quarterly basis.\89\
---------------------------------------------------------------------------

    \88\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf.
    \89\ www.cms.gov/medicare-coverage-database/reports/sad-exclusion-list-report.aspx?bc=AQAAAAAAAAAAAA%3D%3D.
---------------------------------------------------------------------------

    Home infusion therapy involves the intravenous or subcutaneous 
administration of drugs or biologicals to an individual at home. 
Certain drugs can be infused in the home, but the nature of the home 
setting presents different challenges than the settings previously 
described. The components needed to perform home infusion include the 
drug (for example, antibiotics, immune globulin), equipment (for 
example, a pump), and supplies (for example, tubing and catheters). 
Likewise, nursing services are necessary to train and educate the 
patient and caregivers on the safe administration of infusion drugs in 
the home. Visiting nurses often play a large role in home infusion. 
Nurses typically train the patient or caregiver to self-administer the 
drug, educate on side effects and goals of therapy, and visit 
periodically to provide catheter and site care. Depending on patient 
acuity or the complexity of the drug administration, certain infusions 
may require more nursing time, especially those that require special 
handling or pre-or post-infusion protocols. The home infusion process 
typically requires coordination among multiple entities, including 
patients, physicians, hospital discharge planners, health plans, home 
infusion pharmacies, and, if applicable, home health agencies. With 
regard to payment for home infusion therapy under traditional Medicare, 
drugs are generally covered under Part B or Part D. Certain infusion 
pumps, supplies (including home infusion drugs), and nursing are 
covered in some circumstances through the Part B durable medical 
equipment (DME) benefit, the Medicare home health benefit, or some 
combination of these benefits.
    Medicare Part B covers a limited number of home infusion drugs 
through the DME benefit if: (1) The drug is necessary for the effective 
use of an external or implantable infusion pump classified as DME and 
determined to be reasonable and necessary for administration of the 
drug; and (2) the drug being used with the pump is itself reasonable 
and necessary for the treatment of an illness or injury. Only certain 
types of infusion pumps are covered under the DME benefit. The Medicare 
National Coverage Determinations Manual, chapter 1, part 4, Sec.  280.1 
describes the types of infusion pumps that are covered under the DME 
benefit.\90\ For DME infusion pumps, Medicare Part B covers the 
infusion drugs and other supplies and services necessary for the 
effective use of the pump, but does not explicitly require or pay 
separately for any associated home infusion nursing services beyond 
what is necessary for teaching the patient and/or caregiver on how to 
operate the equipment in order to administer the

[[Page 32448]]

infusion safely and effectively.\91\ Through local coverage policies, 
the DME Medicare administrative contractors (MACs) specify the details 
of which infusion drugs are covered with these pumps. Examples of 
covered Part B DME infusion drugs include, among others, certain IV 
drugs for heart failure and pulmonary arterial hypertension, immune 
globulin for primary immune deficiency (PID), insulin, antifungals, 
antivirals, and chemotherapy, in limited circumstances.
---------------------------------------------------------------------------

    \90\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS014961.html.
    \91\ See 42 CFR 424.57(c)(12), which states that the DME 
``supplier must document that it or another qualified party has at 
an appropriate time, provided beneficiaries with necessary 
information and instructions on how to use Medicare-covered items 
safely and effectively.''
---------------------------------------------------------------------------

2. Home Infusion Therapy Legislation
    Section 5012 of the 21st Century Cures Act (Pub. L. 114-255) (Cures 
Act) creates a separate Medicare Part B benefit category under 
1861(s)(2)(GG) of the Act for coverage of home infusion therapy-
associated professional services for certain drugs and biologicals 
administered intravenously, or subcutaneously through a pump that is an 
item of DME, effective January 1, 2021. The infusion pump and supplies 
(including home infusion drugs) will continue to be covered under the 
DME benefit. Section 1861(iii)(2) of the Act defines home infusion 
therapy to include the following items and services: the professional 
services (including nursing services), furnished in accordance with the 
plan, training and education (not otherwise included in the payment for 
the DME), remote monitoring, and other monitoring services for the 
provision of home infusion therapy furnished by a qualified home 
infusion therapy supplier in the patient's home. Section 
1861(iii)(3)(B) of the Act defines the patient's home to mean a place 
of residence used as the home of an individual as defined for purposes 
of section 1861(n) of the Act. As outlined in section 1861(iii)(1) of 
the Act, i to be eligible to receive home infusion therapy services 
under the home infusion therapy benefit, the patient must be under the 
care of an applicable provider, defined in section 1861(iii)(3)(A) of 
the Act as a physician, nurse practitioner, or physician's assistant, 
and the patient must be under a physician-established plan of care that 
prescribes the type, amount, and duration of infusion therapy services 
that are to be furnished. The plan of care must be periodically 
reviewed by the physician in coordination with the furnishing of home 
infusion drugs (as defined in section 1861(iii)(3)(C) of the Act). 
Section 1861(iii)(3)(C) of the Act defines a ``home infusion drug'' 
under the home infusion therapy benefit as a drug or biological 
administered intravenously, or subcutaneously for an administration 
period of 15 minutes or more, in the patient's home, through a pump 
that is an item of DME as defined under section 1861(n) of the Act. 
This definition does not include insulin pump systems or any self-
administered drug or biological on a self-administered drug exclusion 
list.
    Section 1861(iii)(3)(D)(i) of the Act defines a qualified home 
infusion therapy supplier as a pharmacy, physician, or other provider 
of services or supplier licensed by the state in which supplies or 
services are provided. The provision specifies qualified home infusion 
therapy suppliers must furnish infusion therapy to individuals with 
acute or chronic conditions requiring administration of home infusion 
drugs; ensure the safe and effective provision and administration of 
home infusion therapy on a 7-day-a-week, 24-hour-a-day basis; be 
accredited by an organization designated by the Secretary; and meet 
other such requirements as the Secretary deems appropriate, taking into 
account the standards of care for home infusion therapy established by 
Medicare Advantage plans under part C and in the private sector. The 
supplier may subcontract with a pharmacy, physician, other qualified 
supplier or provider of medical services, in order to meet these 
requirements.
    Section 1834(u) of the Act requires the Secretary to implement a 
payment system under which a single payment is made to a home infusion 
therapy supplier for the items and services (professional services, 
including nursing services; training and education; remote monitoring, 
and other monitoring services), beginning January 1, 2021. The single 
payment must take into account, as appropriate, types of infusion 
therapy, including variations in utilization of services by therapy 
type. In addition, the single payment amount is required to be adjusted 
to reflect geographic wage index and other costs that may vary by 
region, patient acuity, and complexity of drug administration. The 
single payment may be adjusted to reflect outlier situations, and other 
factors as deemed appropriate by the Secretary, which are required to 
be done in a budget neutral manner. Section 1834(u)(3) of the Act 
specifies that annual updates to the single payment are required to be 
made beginning January 1, 2022, by increasing the single payment amount 
by the percent increase in the Consumer Price Index (CPI) for all urban 
consumers for the 12-month period ending with June of the preceding 
year, reduced by the multi-factor productivity adjustment. The unit of 
single payment for each infusion drug administration calendar day, 
including the required adjustments and the annual update, cannot exceed 
the amount determined under the fee schedule under section 1848 of the 
Act for infusion therapy services if furnished in a physician's office, 
and the single payment amount cannot reflect more than 5 hours of 
infusion for a particular therapy per calendar day. Section 1834(u)(4) 
of the Act also allows the Secretary discretion, as appropriate, to 
consider prior authorization requirements for home infusion therapy 
services. Finally, section 5012(c)(3) of the Cures Act amended section 
1861(m) of the Act to exclude home infusion therapy from the HH PPS 
beginning on January 1, 2021.

B. Proposed Health and Safety Standards for Home Infusion Therapy

1. Introduction
    Section 5012 of the Cures Act requires that, to receive payment 
under the Medicare home infusion therapy benefit, home infusion therapy 
suppliers must select a CMS-approved accreditation organization (AO) 
and undergo an accreditation review process to demonstrate that the 
home infusion therapy supplier meets the AO's standards. Section 
1861(iii) of the Act, as added by section 5012 of the Cures Act, sets 
forth four elements for home infusion therapy in the following areas: 
(1) Requiring that the patient be under the care of a physician, nurse 
practitioner, or physician assistant; (2) requiring that all patients 
have a plan of care established and updated by a physician that sets 
out the care and prescribed infusion therapy necessary to meet the 
patient specific needs; (3) providing patients with education and 
training on the effective use of medications and equipment in the home 
(not otherwise paid for as durable medical equipment); and (4) 
providing monitoring and remote monitoring services associated with 
administering infusion drugs in a patient's home.
    The Journal of Infusion Nursing standards of practice specifically 
address patient education, and state that it is the clinician's role to 
educate the patient, caregiver, and/or surrogate about the prescribed 
infusion therapy and plan of care including, but not limited to, 
purpose and expected outcome(s) and/or goals of treatment, infusion 
therapy administration; infusion device-related care; potential

[[Page 32449]]

complications; or adverse effects associated with treatment. (Infusion 
Therapy Standards of Practice, 2015).\92\
---------------------------------------------------------------------------

    \92\ Infusion Therapy: Standards of Practice, Journal of 
Infusion Nursing, Wolters Kluwer: Jan/Feb 2016 pp S25-S26
---------------------------------------------------------------------------

    Currently, standards for home infusion therapy have been 
established by the current AOs; however, they are not necessarily 
consistent. In order to assure consistency in the areas identified in 
the Act, we are establishing basic standards that all AOs would be 
required to meet or exceed. We are proposing universal standards for 
Medicare-participating qualified home infusion therapy suppliers to 
ensure the quality and safety of home infusion therapy services for all 
beneficiaries that these suppliers serve.
    In preparation for developing these standards and to gain a clear 
understanding of the current home infusion therapy supplier private 
sector climate, we reviewed the requirements established by section 
5012 of the Cures Act, performed an extensive review of the standards 
from all six AOs that accredit home infusion suppliers (The Joint 
Commission, Accreditation Commission for Health Care, Compliance Team, 
Community Health Accreditation Partner, Healthcare Quality Association 
on Accreditation, and National Association of Boards of Pharmacy), and 
reviewed various other government and industry publications listed in 
this proposed rule. In addition to the standards, we reviewed the 
following documents related to coverage:
    <bullet> Government Accountability Office--10-426 report, which 
describes the state of coverage of home infusion therapy components 
under Medicare fee-for-service prior to the enactment of the Cures Act 
(GAO, 2010).\93\
---------------------------------------------------------------------------

    \93\ Government Accountability Office. (2010). Home Infusion 
Therapy. Differences between Medicare and Private Insurers' 
coverage. (GAO Publication No. 10-426). Washington, DC: U.S. 
Government Printing Office.
---------------------------------------------------------------------------

    <bullet> Medicare and Home Infusion white paper written by the 
National Home Infusion Association (NHIA), which provided an overview 
of Medicare coverage provided for Home Infusion Therapy services prior 
to the enactment of the Cures Act, as well as results of a study 
conducted by Avalere Health on the potential savings that could result 
from Medicare coverage of infusion therapy provided in the home 
(National Home Infusion Therapy Association, NDS).\94\
---------------------------------------------------------------------------

    \94\ National Home Infusion therapy Association. Medicare and 
Home Infusion White Paper. Retrieved from https://www.nhia.org/resource/legislative/documents/NHIAWhitePaper-Web.pdf.
---------------------------------------------------------------------------

    <bullet> American Society of Health System Pharmacists Guidelines 
on Home Infusion Pharmacy Services, which provided an in-depth overview 
of specialized, complex. pharmaceuticals, best practices on providing 
home infusion therapy in the home or alternative site settings, and the 
plans to execute and manage the therapy (American Society of Health-
System Pharmacists. ASHP guidelines on Home Infusion Pharmacy Service, 
2014).\95\
---------------------------------------------------------------------------

    \95\ American Society of Health-System Pharmacists. ASHP 
guidelines on Home Infusion Pharmacy Service, 2014. Retrieved from: 
https://www.ashp.org/-/media/assets/policy-guidelines/docs/guidelines/home-infusion-pharmacy-services.ashx?la=en&hash=255092A51D0AE4746C151C51AC7BF82217AC2F76.
---------------------------------------------------------------------------

    <bullet> The requirements of numerous Medicare Advantage plans, 
Medicare FFS, and private insurance plans.
    Upon review of these materials, we believe that there is a 
sufficient private-sector framework already in place to address many of 
the areas that would typically be included in the establishment of 
basic health and safety standards for home infusion therapy. For 
example, existing AO standards include requirements related to plan of 
care, monitoring, patient assessment, quality improvement, and 
infection control. While the exact content of the AO standards vary, we 
believe that the standards are adequate to ensure patient health and 
safety. The AO representing the largest number of home infusion therapy 
suppliers requires that home infusion pharmacies provide certain 
services to ensure safe and appropriate therapy, in compliance with 
nationally recognized standards of practice. Patient training and 
education activities, as part of their required admission procedures, 
include the use of medical and disposable equipment, medication 
storage, emergency procedures, vascular access device management, 
recognition of a drug reaction, and when to report any adverse drug 
event. As such, we conclude that it is appropriate at this time to 
propose requirements for only those elements specifically identified in 
section 1861(iii) of the Act. Through the CMS accreditation 
organization process, we would monitor home infusion therapy suppliers 
to assure that services are provided in a safe and effective manner, 
and would consider future rulemaking to address any areas that may need 
improvement in the future. We are seeking public comment on this 
approach and invite comments related to the home infusion therapy 
proposed standards. Specifically, are the standards sufficient for 
Medicare beneficiaries, should CMS consider additional standards and 
would additional standards impose additional burden?
2. Home Infusion Therapy Supplier Requirements (Proposed Part 486, 
Subpart I)
    We propose to add a new 42 CFR part 486, subpart I, to incorporate 
the home infusion therapy supplier requirements. The proposed 
regulations would provide a framework for CMS to approve home infusion 
therapy accreditation organizations and give them the authority to 
approve Medicare certification for home infusion therapy suppliers. 
Proposed subpart I would include General Provisions (Basis and Scope, 
and Definitions) and Standards for Home Infusion Therapy (Plan of Care 
and Required Services).
a. Basis and Scope (Proposed Sec.  486.500)
    We propose to set forth the basis and scope of part 486 at Sec.  
486.500. Part 486 is based on sections 1861(iii)(2)(D) of the Act, 
which establishes the requirements that a home infusion therapy 
supplier must meet in order to participate in the Medicare program. 
These provisions serve as the basis for survey activities for the 
purposes of determining whether a home infusion therapy supplier meets 
the requirements for participation in Medicare. Section 1834(u) of the 
Act serves as the basis for the establishment of a prospective payment 
system for home infusion therapy covered under Medicare. In addition, 
1834(u)(5) of the Act establishes the factors for the Secretary to 
designate organizations to accredit suppliers furnishing home infusion 
therapy and requires that organizations be designated not later than 
January 1, 2021.
b. Definitions (Proposed Sec.  486.505)
    At Sec.  486.505, we propose to define certain terms that would be 
used in the home infusion therapy requirements. We propose to define 
the terms ``applicable provider'', ``home'', ``home infusion drug'', 
and ``qualified home infusion therapy supplier'' in accordance with the 
definitions set forth in section 1861(iii) of the Act. Furthermore, 
section 1861(iii) of the Act includes a definition of the term ``home 
infusion therapy'' that is the basis of the proposed health and safety 
requirements set forth in this rule. In accordance with the Act, we 
propose the following definitions:
    <bullet> ``Applicable provider'' would mean a physician, a nurse 
practitioner, and a physician assistant.
    <bullet> ``Home'' would mean a place of residence used as the home 
of an individual, including an institution that

[[Page 32450]]

is used as a home. However, an institution that is used as a home may 
not be a hospital, CAH, or SNF as defined in sections 1861(e), 
1861(mm)(1), and 1819 of the Act, respectively.
    <bullet> ``Home infusion drug'' would mean a parenteral drug or 
biological administered intravenously, or subcutaneously for an 
administration period of 15 minutes or more, in the home of an 
individual through a pump that is an item of durable medical equipment. 
The term does not include insulin pump systems or a self-administered 
drug or biological on a self-administered drug exclusion list.
    <bullet> ``Qualified home infusion therapy supplier'' would mean a 
supplier of home infusion therapy that meets the all of the following 
criteria which are set forth at section 1861(iii)(3)(D)(i) of the Act: 
(1) Furnishes infusion therapy to individuals with acute or chronic 
conditions requiring administration of home infusion drugs; (2) ensures 
the safe and effective provision and administration of home infusion 
therapy on a 7-day-a-week, 24-hour-a-day basis; (3) is accredited by an 
organization designated by the Secretary in accordance with section 
1834(u)(5) of the Act; and (4) meets such other requirements as the 
Secretary determines appropriate.
c. Standards for Home Infusion Therapy
    Proposed subpart I, as required by section 5012 of the Cures Act, 
would specify that the qualified home infusion therapy supplier ensure 
that all patients have a plan of care established by a physician.
(1) Plan of Care (Proposed Sec.  486.520)
    At Sec.  486.520(a), we propose to require that all patients must 
be under the care of an ``applicable provider'' as defined at Sec.  
486.505. At Sec.  486.520(b) we would require that the qualified home 
infusion therapy supplier ensure that all patients must have a plan of 
care established by a physician that prescribes the type, amount, and 
duration of home infusion therapy services that are furnished. The plan 
of care would also include the specific medication, the prescribed 
dosage and frequency as well as the professional services to be 
utilized for treatment. In addition, the plan of care would specify the 
care and services necessary to meet the patient-specific needs.
    We also propose, at Sec.  486.520(c), that the qualified home 
infusion therapy supplier must ensure that the plan of care for each 
patient is periodically reviewed by the physician. We do not propose to 
establish a specific time frame for review requirements, but the 
expectation is that the physician is active in the patient's care and 
can make appropriate decisions related to the course of therapy if 
changes are necessary in regards to the progress of the patient and 
goal achievement with the infusion therapy. We welcome comments 
regarding the proposed home infusion therapy plan of care requirements 
and if we should include specific review timeframes for the plan of 
care.
(2) Required Services (Proposed Sec.  486.525)
    Section 1861(iii)(2)(D)(II) of the Act specifically mandates that 
qualified home infusion therapy suppliers ensure the safe and effective 
provision and administration of home infusion therapy on a 7-day-a-
week, 24-hour-a-day basis. Infusion drugs are administered directly 
into a vein or under the skin, eliciting a more rapid clinical response 
than with oral medications. Consequently, an adverse effect or a 
medication error could result in a quicker and/or more severe 
complication. Therefore, at Sec.  486.525(a), we propose to require the 
provision of professional services, including nursing services, 
furnished in accordance with the plan of care. We propose to require 
that home infusion therapy suppliers ensure that professional services 
are available on a 7-day-a-week, 24-hour-a-day basis in order to ensure 
that patients have access to expert clinical knowledge and advice in 
the event of an urgent or emergent infusion-related situation. This 
proposed requirement is imperative, as the success of home infusion 
therapy is often dependent upon the professional services being 
available during all hours and days of the week that allows for the 
patient to safely and effectively manage all aspects of treatment.
    At Sec.  486.525(b), we propose to require patient training and 
education, not otherwise paid for as durable medical equipment, and as 
described in 42 CFR 424.57(c)(12). This proposed requirement is 
consistent with section 1861(iii)(2)(B). In addition, the proposed 
patient training and education requirements are consistent with 
standards that are already in place, as established by the current AOs 
of home infusion therapy suppliers. This is a best practice, as home 
infusion therapy may entail the use of equipment and supplies with 
which patients' may not be comfortable or familiar.
    At Sec.  486.525(c), we propose to require qualified home infusion 
therapy suppliers to provide remote monitoring and monitoring services 
for the provision of home infusion therapy services and home infusion 
drugs furnished by a qualified home infusion therapy supplier. This 
proposed requirement is also consistent with section 1861(iii)(2)(B). 
Monitoring the patient receiving infusion therapy in their home is a 
vital standard of practice that is an integral part of providing 
medical care to patients in their home.\96\ The expectation is that 
home infusion therapy suppliers would provide ongoing patient 
monitoring and continual reassessment of the patient to evaluate 
response to treatment, drug complications, adverse reactions, and 
patient compliance. Remote monitoring may be completed through follow-
up telephone or other electronic communication, based on patient 
preference of communication. However, we do not propose to limit remote 
monitoring to these methods. Suppliers would be permitted to use all 
available remote monitoring methods that are safe and appropriate for 
their patients and clinicians and as specified in the plan of care as 
long as adequate security and privacy protections are utilized. 
Monitoring may also be performed directly during in-home patient 
visits. Additional discussion on remote monitoring and monitoring 
services can be found in section II.C.2.d. of this proposed rule. We 
invite the public to submit comments regarding the proposed home 
infusion therapy supplier service requirements.
---------------------------------------------------------------------------

    \96\ Infusion Therapy: Standards of Practice, Journal of 
Infusion Nursing, Wolters Kluwer: Jan/Feb 2016 pp S25-S26.
---------------------------------------------------------------------------

C. Approval and Oversight of Accrediting Organizations for Home 
Infusion Therapy Suppliers

1. Background
    Section 1861(iii)(3)(D)(III) of the Social Security Act (the Act), 
as added by section 5012(b) of the Cures Act, requires that a home 
infusion therapy supplier be accredited by an AO designated by the 
Secretary in accordance with section 1834 (u)(5) of the Act. Section 
1834(u)(5)(A) of the Act identifies factors for designating AOs and 
modifying the list of designated AOs. These statutory factors are: (1) 
The ability of the organization to conduct timely reviews of 
accreditation applications; (2) the ability of the organization take 
into account the capacities of suppliers located in a rural area (as 
defined in section 1886(d)(2)(D) of the Act); (3) whether the 
organization has established reasonable fees to be charged to suppliers 
applying for accreditation; and, (4) such other factors as the 
Secretary determines appropriate.

[[Page 32451]]

    Section 1834(u)(5)(B) of the Act requires the Secretary to 
designate AOs to accredit home infusion therapy suppliers furnishing 
home infusion therapy not later than January 1, 2021. However, at this 
time, there are six AOs that are providing accreditation to home 
infusion therapy suppliers. These AOs are: (1) The Joint Commission 
(TJC); (2) Accreditation Commission for Health Care (ACHC); (3) 
Compliance Team (TCT); (4) Community Health Accreditation Partner 
(CHAP); (5) Healthcare Quality Association on Accreditation; and (6) 
National Association of Boards of Pharmacy. These AOs are accrediting 
home infusion therapy suppliers as part of the deeming accreditation of 
home health agencies. However, these AOs have not been separately 
approved by Medicare for accreditation of home infusion therapy 
services.
    We are proposing to publish a solicitation notice in the Federal 
Register, in which we would invite national AOs to apply to accredit 
home infusion therapy suppliers for the Medicare program. We are 
proposing that this solicitation notice would be published after the 
final rule is published, so that we can designate AOs to accredit home 
infusion therapy suppliers by no later than January 1, 2021 as required 
by 1834(u)(5)(B) of the Act. Any AOs that respond to this solicitation 
notice would be required to submit an application for CMS-approval of 
their home infusion therapy accreditation program. The application 
submitted by an AO that respond to the solicitation notice would be 
required to meet all requirements set forth in proposed Sec.  488.1010 
and demonstrate that their substantive requirements are equal to or 
more stringent than our proposed regulations at part 485, subpart I.
    Section 1861(iii)(3)(D) of the Act requires ``qualified home 
infusion therapy suppliers'' to be accredited by a CMS-approved AO. We 
are also proposing that, in order for the home infusion therapy 
suppliers accredited by the six AOs that currently provide non-Medicare 
approved home infusion therapy accreditation to continue receiving 
payment for the home infusion therapy services they provide, the 6 
existing AOs must submit applications to CMS for Medicare approval of 
their home infusion therapy accreditation program. The accreditation 
currently being provided by these six AOs to the home infusion therapy 
suppliers is part of another accreditation program that has not be 
separately approved by CMS. These AOs have not submitted an application 
to CMS for approval of a specific home infusion therapy accreditation 
program that meets the requirements of section 1861(iii) and section 
1834(u)(5) of the Act; therefore, CMS has not been able to determine 
whether the home infusion therapy accreditation program standards used 
by these AOs meets or exceeds those of Medicare.
    We are proposing that the home infusion therapy accreditation 
program submitted to CMS by these existing AOs be a separate and 
distinct accreditation program from the AO's home health accreditation 
program. This would mean that these AOs must have a separate 
accreditation program with separate survey processes and standards for 
the accreditation of home infusion therapy suppliers. In addition, we 
would require that the application submitted by the six AOs that 
currently provide non-Medicare approved accreditation to home infusion 
therapy suppliers meet the requirements set forth in the proposed 
regulations at Sec.  488.1010 and enforce the substantive health and 
safety standards proposed to be set out at 42 CFR part 485, subpart I.
    Section 1834(u)(5)(C)(ii) of the Act states that in the case where 
the Secretary removes a home infusion therapy AO from the list of 
designated home infusion therapy AOs, any home infusion therapy 
supplier that is accredited by the home infusion therapy AO during the 
period beginning on the date on which the home infusion therapy AO is 
designated as an CMS-approved home infusion therapy AO and ending on 
the date on which the home infusion therapy AO is removed from such 
list, shall be considered to have been accredited by an home infusion 
therapy AO designated by the Secretary for the remaining period such 
accreditation is in effect. Under section 1834(u)(5)(D) of the Act, in 
the case of a home infusion therapy supplier that is accredited before 
January 1, 2021 by a home infusion therapy AO designated by the 
Secretary as of January 1, 2019, such home infusion therapy supplier 
shall be considered to be accredited by a home infusion therapy AO 
designated by the Secretary as of January 1, 2023, for the remaining 
period such accreditation is in effect. Home infusion therapy suppliers 
are required to receive accreditation before receiving Medicare payment 
for services provided to Medicare beneficiaries.
    Section 1861(iii)(3)(D) of the Act defines ``qualified home 
infusion therapy suppliers'' as being accredited by a CMS-approved AO. 
CMS is proposing to establish regulations for the approval and 
oversight of AOs that accredit home infusion therapy suppliers that 
address the following: (1) The required components to be included in a 
home infusion therapy AO's initial or renewal application for CMS 
approval of the AO's home infusion therapy accreditation program; (2) 
the procedure for CMS' review and approval of the home infusion therapy 
AOs application for CMS approval of its home infusion therapy 
accreditation program; and (3) the ongoing monitoring and oversight of 
CMS-approved home infusion therapy AOs.
2. Proposed Process and Standards for Home Infusion Therapy 
Accreditation and the Approval and Oversight of Accrediting 
Organizations With CMS-Approved Accreditation Programs for Home 
Infusion Therapy Services
a. Establishment of Regulatory Requirements
    We propose to establish new regulations in a new subpart L in 42 
CFR part 488 that would govern CMS' approval and oversight of AOs that 
accredit home infusion therapy suppliers. We believe these proposed new 
regulations would provide CMS with reasonable assurance that the home 
infusion therapy AO's accreditation program requirements are consistent 
with the appropriate Medicare accreditation program requirements. 
Further, we believe that these proposed regulations would provide CMS 
with a way to provide oversight for AOs that accredit home infusion 
therapy suppliers, and provide CMS with authority over the home 
infusion therapy suppliers.
    We are proposing to implement a comprehensive, consistent and 
standardized set of AO oversight regulations for accreditors of home 
infusion therapy suppliers. It is our intention to provide home 
infusion therapy AOs with the flexibility to innovate within the 
framework of these proposed regulations while assuring that their 
accreditation standards meet, or exceed the appropriate Medicare 
requirements, and their survey processes are comparable to those of 
Medicare. ``Flexibility to innovate'' means that AOs retain the freedom 
to develop their own accreditation standards and survey processes, so 
long as the AO ensures that they meet the proposed health and safety 
standards (contained in 42 CFR part 486, subpart B) and the AO meets 
the requirements of the proposed AO approval and oversight regulations.
    The proposed regulations would reflect requirements similar to 
those in place for the oversight of national AOs

[[Page 32452]]

for Medicare-certified providers and suppliers which are codified at 42 
CFR 488.1 through 488.9 and 42 CFR part 489, but would be modified, as 
appropriate, to be applicable for accreditors of home infusion therapy 
suppliers. We believe that it is important to have AO approval and 
oversight regulations that are as consistent as possible across all AOs 
and to treat all AOs in a similar manner.
b. Consideration of Existing Regulations
    In formulating our approach to implementing the statutory 
requirements related to accreditation organizations, we had considered 
using the regulations at 42 CFR 488.1 to 488.13 for the approval and 
oversight of AOs that accredit home infusion therapy suppliers. 
However, we decided not to do so because Congress, by setting out 
separate accreditation organization approval standards for home 
infusion therapy suppliers at 1834(u)(5)(A) of the Act, intended 
approval for this accreditation program to be a discrete process. We 
believe that having a separate set of approval regulations applicable 
only to home infusion therapy suppliers will best reflect Congress's 
intent.
    Only limited portions of the regulations at Sec. Sec.  488.1 
through 488.13 would apply to AOs that accredit home infusion therapy 
suppliers. For example, Sec.  488.6, which provides that a supplier or 
provider that has been granted ``deemed status'' by CMS by virtue of 
its accreditation from a CMS-approved accreditation program is eligible 
to participate in the Medicaid program if they are not required under 
Medicaid regulations to comply with any requirements other than 
Medicare participation requirements would not apply to home infusion 
therapy suppliers because home infusion therapy suppliers cannot be 
deemed. The deeming process only applies to certain types of Medicare 
certified providers and suppliers, such as hospitals.
    Section 488.7 titled ``Release and use of accreditation surveys'' 
and Sec.  488.8 titled ``Ongoing review of accrediting organizations'' 
would apply to AOs that accredit home infusion therapy suppliers. 
However, Sec.  488.9 titled ``Validation surveys'' would not apply to 
home infusion therapy suppliers because the State Survey Agency (SA) 
only performs validation surveys for Medicare providers that have an 
agreement with Medicare. Home infusion therapy suppliers are enrolled 
in the Medicare program but do not enter into an agreement with 
Medicare, therefore the SA will not perform validation surveys of home 
infusion therapy suppliers. Also, section 1864(a) of the Act provides, 
that by agreement with the Secretary, the SA shall provide services to 
the following Medicare certified healthcare providers: Hospitals, 
skilled nursing facilities, home health agencies, hospice programs, 
rural health clinics, critical access hospitals, comprehensive 
outpatient rehabilitation facilities, laboratories, clinics, 
rehabilitation agencies, public health agencies, or ambulatory surgical 
centers.
    Section 488.10, titled ``State survey agency review: Statutory 
provisions'', Sec.  488.11 titled ``State survey agency functions'' and 
Sec.  488.12 titled ``Effect of survey agency certification'' would 
also not apply to home infusion therapy AOs. This is because, as stated 
previously, the SA does not perform validation surveys for AOs that 
accredit home infusion therapy providers. Section 488.13, titled ``Loss 
of accreditation'' provides that ``if an accrediting organization 
notifies CMS that it is terminating a provider or supplier due to non-
compliance with its CMS-approved accreditation requirements, the SA 
will conduct a full review in a timely manner.'' This section would 
also not apply to AOs that accredit home infusion therapy suppliers 
because this regulation section requires use of the SA.
    Section 488.14 titled, ``Effect of QIO review'' provides that 
``when a QIO is conducting review activities under section 1154 of the 
Act and part 466 of this chapter, its activities are in lieu of the 
utilization review and evaluation activities required of health care 
institutions under sections 1861(e)(6), and 1861(k) of the Act.'' This 
section would not apply to home infusion therapy suppliers because it 
is only applicable only to hospitals.
    Finally, Sec.  488.18, titled ``Documentation of findings'' states 
that ``the findings of the State agency with respect to each of the 
conditions of participation, requirements (for SNFs and NFs), or 
conditions for coverage must be adequately documented.'' This section 
would not apply to AOs that accredit home infusion therapy suppliers 
because it involves the finding of the SA related only to SNFs and NFs.
    In conclusion, a majority of sections contained in Sec. Sec.  488.1 
through 488.13 do not apply to home infusion therapy AOs and home 
infusion therapy suppliers. Therefore, we are proposing to create a 
separate set of regulations that are specifically applicable to home 
infusion therapy AOs and suppliers.
    We seek comment on our decision not to use the existing regulation 
at Sec. Sec.  488.1 through 488.13.
c. Consideration of a Validation Process for Accrediting Organizations 
That Accredit Home Infusion Therapy Suppliers
    Our conventional validation process involves the participation of 
the CMS Regional Offices (ROs) to request the State Survey Agency to 
conduct an onsite validation (follow-up) survey within 60 days of an 
AO's onsite survey. The purpose of a validation survey is to evaluate 
the ability of that AO's survey process to identify serious, condition 
level deficiencies.
    We are not proposing to establish a validation program requirement 
for home infusion therapy AOs and suppliers due to a number of resource 
constraints. Several factors limit our ability to establish and 
implement a validation program for home infusion therapy AOs. First, 
the SAs are not available to perform validation surveys for home 
infusion therapy AOs suppliers and other similar non-certified 
providers and suppliers. Section 1864(a) of the Act provides the SA, by 
agreement with the Secretary, provides services to the following 
Medicare certified healthcare providers: Hospitals, skilled nursing 
facilities, home health agencies, hospice programs, rural health 
clinics, critical access hospitals, comprehensive outpatient 
rehabilitation facilities, laboratories, clinics, rehabilitation 
agencies, public health agencies, or ambulatory surgical centers.
    Second, a validation program for home infusion therapy supplier AOs 
would require the use of contractors. Third, achieving sample sizes 
that are statistically significant from which to draw reliable 
conclusions about AO performances across all home infusion therapy 
suppliers would be problematic as there are a limited number of home 
infusion therapy suppliers. Due to the factors stated previously, we 
are not proposing to include validation requirements in the proposed 
new regulations for the oversight of AOs that accredit suppliers at 
this time. We seek public comment on the decision not to propose a 
validation process at this time.
    Even though we would not have a formal validation process in place, 
we would be able to monitor the performance of the home infusion 
therapy AOs as part of the ongoing AO oversight process provided for in 
the proposed home infusion therapy AO approval and oversight 
regulations at Sec. Sec.  488.1010 through 488.1050. For

[[Page 32453]]

example, under proposed Sec.  488.1030 we would have the ability to 
perform performance reviews to evaluate the performance of each CMS-
approved home infusion therapy accreditation program on an ongoing 
basis; comparability reviews to assess the equivalency of a home 
infusion therapy AO's CMS-approved program requirements with the 
comparable Medicare home infusion therapy accreditation requirements 
after CMS imposes new or revised Medicare accreditation requirements; 
and standards reviews when a home infusion therapy accrediting 
organization proposes to adopt new or revised accreditation standards. 
We may also perform CMS-approved home infusion therapy accreditation 
program review if a comparability or performance, or standards review 
reveals evidence of substantial non-compliance of a home infusion 
therapy AO's CMS-approved home infusion therapy accreditation program 
with the requirements of this subpart. (See proposed Sec.  488.1005 
below for a definition of substantial non-compliance).
    In addition, proposed Sec.  488.1035 would require the home 
infusion therapy AOs to submit information to CMS which will help us 
monitor the AO's performance. This information would also help to 
ensure that the home infusion therapy suppliers accredited by the AO 
provide care that meets the proposed health and safety standards 
contained in 42 CFR part 486, subpart B. This information includes the 
following:
    <bullet> Copies of all home infusion therapy supplier accreditation 
surveys, together with any survey-related information.
    <bullet> Notice of all accreditation decisions.
    <bullet> Notice of all complaints related to the AO's accredited 
suppliers.
    <bullet> Information about all home infusion therapy accredited 
suppliers against which the home infusion therapy accreditation 
organization has taken remedial or adverse action, including 
revocation, withdrawal, or revision of the providers or suppliers 
accreditation.
    <bullet> Annual basis, summary data specified by CMS that relate to 
the past year's accreditation activities and trends.
    <bullet> Notice of any proposed changes in the home infusion 
therapy accrediting organization's accreditation standards or 
requirements or survey process.
d. Application Requirement for AOs That Currently Provide Accreditation 
for Home Infusion Therapy Suppliers
    In this rule, we are proposing to establish regulations for the 
approval and oversight of AOs for home infusion therapy suppliers. We 
are also proposing the health and safety standards which home infusion 
therapy suppliers must meet, and which the home infusion AOs must meet 
or exceed in their accreditation standards. These health and safety 
standards are set forth at 42 CFR part 486, subpart I. The AOs that 
currently accredit home infusion therapy suppliers have not heretofore 
been governed by any CMS regulations related to home infusion therapy 
accreditation or health and safety standards. These AOs have each 
created their own set of accreditations standards. These accreditation 
standards vary from AO to AO.
    Section 1834(u)(5)(C) of the Act requires home infusion therapy 
suppliers to be accredited in order to receive payment for the services 
they provide. We propose to require that the home infusion therapy 
accreditation program submitted to CMS for approval by each of the AOs 
that currently accredit home infusion therapy suppliers be separate and 
distinct accreditation programs that are not part of the AOs home 
health accreditation program. We would further require that the AOs 
home infusion therapy accreditation standards meet or exceed the 
proposed health and safety standards for home infusion therapy 
suppliers. Finally, we would require that the application meet the 
requirements of proposed 42 CFR 488.1010.
    We solicit comments on these proposals.
e. Oversight of Home Infusion Therapy Accrediting Organizations
    As noted previously, we are proposing to create a new set of 
regulations titled, ``Approval and Oversight of Home Infusion Therapy 
Supplier Accrediting Organizations'' at 42 CFR part 488, subpart L. 
These proposed regulations would set forth the application and 
reapplication procedures for national AOs seeking approval or re-
approval of authority to accredit home infusion therapy suppliers; 
ongoing CMS oversight processes for approved AOs that accredit home 
infusion therapy suppliers; and, appeal procedures for AOs that 
accredit home infusion therapy suppliers. In this section of the 
proposed rule, we describe our proposed regulatory provisions.
    The following sections discuss the proposed regulations, in their 
proposed order.
(1) Basis and Scope (Sec.  488.1000)
    We propose at Sec.  488.1000 to set forth the statutory authority 
related to this set of proposed regulations. Sections 1834(u)(5) and 
1861(iii) of the Act would be the statutory basis for these proposed 
regulations. These sections of the Act provide the Secretary with the 
authority necessary to carry out the administration of the Medicare 
program. Section 1861 of the Act defines services, supplier types and 
benefits, and over whom Medicare may have authority. Section 1861(d) 
defines the term ``supplier.'' Section 1834(u)(5) of the Act governs 
accreditation of home infusion therapy suppliers.
    Section 1861(iii)(3)(D)(i)(III) of the Act requires that home 
infusion therapy suppliers be accredited by an organization designated 
under section 1834(u)(5)of the Act. Section 1834(u)(5) of the Act 
requires that the Secretary establish factors in designating 
accrediting organizations and designate accrediting organizations to 
accredit suppliers furnishing home infusion therapy by January 1, 2021.
    Proposed Sec.  488.1000(a) would set forth the statutory authority 
for the accreditation of home infusion therapy suppliers by the home 
infusion therapy AOs. Title 42 CFR 488.1000(b) would set forth the 
scope of the proposed regulation, which is the application and 
reapplication procedures for national AOs seeking approval or re-
approval of authority to accredit home infusion therapy suppliers; 
ongoing CMS oversight processes for approved of home infusion therapy 
AOs; and, appeal procedures for AOs of home infusion therapy suppliers.
(2) Definitions (Sec.  488.1005)
    We are proposing to use the following definitions at Sec.  
488.1005:
    <bullet> Accredited home infusion therapy supplier means a supplier 
that has demonstrated substantial compliance with a CMS-approved 
national home infusion therapy AO's applicable CMS-approved home 
infusion therapy accreditation program standards, which meet or exceed 
those of Medicare, and has been awarded accreditation by that AO.
    <bullet> Qualified home infusion therapy supplier means an entity 
that meets the following criteria which are set forth at 
1861(iii)(3)(D)(i): (1) Furnishes infusion therapy to individuals with 
acute or chronic conditions requiring administration of home infusion 
drugs; (2) ensures the safe and effective

[[Page 32454]]

provision and administration of home infusion therapy on a 7-day-a-
week, 24-hour-a-day basis; (3) is accredited by an organization 
designated by the Secretary pursuant to section 1834(u)(5); and (4) 
meets such other requirements as the Secretary determines appropriate.
    <bullet> Immediate jeopardy means a situation in which the 
provider's or supplier's non-compliance with one or more Medicare 
accreditation requirements has caused, or is likely to cause, serious 
injury, harm, impairment, or death to a patient, as codified at Sec.  
488.1.
    <bullet> National accrediting organization means an organization 
that accredits supplier entities under a specific program and whose 
accredited supplier entities under each program are widely dispersed 
geographically across the United States. In addition, the specific 
program is active, fully implemented, and operational. This definition 
is codified at Sec.  488.1.
    <bullet> Reasonable assurance means an AO has demonstrated to CMS' 
satisfaction that its accreditation program requirements meet or exceed 
the Medicare program requirements. This definition is codified at Sec.  
488.1.
    <bullet> Rural area means an area as defined at section 
1886(d)(2)(D) of the Act.
    <bullet> Substantial allegation of non-compliance means a complaint 
from any of a variety of sources (such as patient, relative, or third 
party), including complaints submitted in person, by telephone, through 
written correspondence, or in the newspaper, magazine articles or other 
media, that would, if found to be present, adversely affect the health 
and safety of patients and raises doubts as to a supplier's compliance 
with any of the Medicare home infusion therapy accreditation 
requirements. This definition is codified at Sec.  488.1.
(3) Application and Reapplication Procedures for National Accrediting 
Organizations (Sec.  488.1010)
    Proposed Sec.  488.1010 would contain application and re-
application procedures for all national AOs seeking CMS-approval of an 
accreditation program for home infusion therapy suppliers. Proposed 
Sec.  488.1010(a) would provide a comprehensive listing of the 
information, supporting documentation, certifications, written 
statements and other data that prospective AOs for home infusion 
therapy suppliers would be required to include in their application for 
approval to accredit home infusion therapy suppliers. The requirements 
under this section would apply to both initial applications for CMS-
approval as well as applications for re-approval of an existing CMS-
approved home infusion therapy accreditation program. This section 
would also require the AOs for home infusion therapy supplies to 
furnish CMS with information that demonstrates that their accreditation 
program requirements meet or exceed the applicable Medicare 
requirements.
    Proposed Sec.  488.1010(a)(1) would require AOs for home infusion 
therapy suppliers seeking initial or renewed CMS-approval of their home 
infusion therapy accreditation program to demonstrate that they meet 
the definition of a ``national accrediting organization.'' Section 1865 
of the Act requires that accrediting organizations be national in 
scope.
    We believe that because home infusion therapy suppliers are located 
throughout the country, it is necessary for AOs to demonstrate their 
ability to provide accreditation services in a variety of regions 
across the country. In the May 22, 2015 final rule entitled, ``Medicare 
and Medicaid Programs: Revisions to Deeming Authority, Survey, 
Certification and Enforcement Procedures'' (80 FR 29802), we stated 
that the term ``national in scope'' indicated a program already fully 
implemented, operational, and widely dispersed geographically 
throughout the country. However, we also stated that we would not 
establish a minimum or a specific geographic distribution for provider 
entities that the program must have already accredited. It is our 
intent that this proposed section would require a home infusion therapy 
AO to demonstrate that their accreditation program meets the ``national 
in scope'' description as previously defined.
    Proposed Sec.  488.1010(a)(2) would require AOs to specifically 
identify the Medicare supplier type for which they are requesting CMS-
approval or reapproval. We believe it is necessary for an AO to 
establish separate accreditation requirements for each supplier type 
they accredit. There are many AOs that provide accreditation programs 
for multiple types of provider and supplier types. When we receive an 
application from such an AO, we would not know which type of 
accreditation program the AO has submitted for CMS approval. For 
example, the AO could be submitting a renewal application for one of 
its existing accreditation programs. Therefore, it is helpful to CMS if 
the AO identifies the type of accreditation for which they are seeking 
approval at the beginning of the application.
    Proposed Sec.  488.1010(a)(3) would require AOs to demonstrate 
their ability to take into account the capacities of home infusion 
therapy suppliers in rural areas (as defined in section 
1834(u)(5)(A)(ii) of the Act. Rural home infusion therapy suppliers may 
have limitations or access to care issues that do not apply to suburban 
and urban home infusion therapy suppliers. These limitation may 
include, but are not limited to the number of home infusion therapy 
suppliers available in rural areas and limited home infusion therapy 
services offered in rural areas. While we certainly would not permit 
AOs that accredit any type of supplier to modify their accreditation 
standards for suppliers in rural areas, these factors must be taken 
into account as in accordance with section 1834(u)(5)(A)(ii) of the 
Act.
    Proposed Sec.  488.1010(a)(4) would require the home infusion 
therapy AO to provide information that documents their knowledge, 
expertise, and experience in the healthcare field for which they offer 
accreditation and for which they are requesting approval. We believe 
that to successfully develop accreditation program standards that can 
provide CMS with reasonable assurance that accredited home infusion 
therapy suppliers meet or exceed each of the applicable Medicare 
requirements, evaluate compliance, support entities in their efforts to 
identify and implement necessary corrective actions and monitor ongoing 
compliance, an AO must possess subject matter expertise and experience 
in that field.
    Proposed Sec.  488.1010(a)(5) would require the AO to submit a 
detailed crosswalk (in table format) that identifies, for each of the 
applicable Medicare health and safety requirements, the exact language 
of the accrediting organization's comparable accreditation requirements 
and standards. This requirement would allow CMS to evaluate whether the 
accreditation program standards meet or exceed the applicable Medicare 
requirements. We note that an AO for home infusion therapy suppliers 
could set standards that exceed the Medicare requirements in the 
accreditation program it submits to CMS for approval. However, at a 
minimum, AOs for home infusion therapy suppliers would have to provide 
evidence that their accreditation program utilizes standards and 
procedures that met or exceeded applicable Medicare requirements.
    Proposed Sec.  488.1010(a)(6) would require each AO for home 
infusion therapy suppliers to provide a detailed description of its 
survey process. This requirement is intended to allow CMS to gain a 
better understanding of an AO's proposed survey process and ensure that 
its survey and enforcement

[[Page 32455]]

processes are comparable to Medicare's health and safety standards 
(contained in 42 CFR part 486, subpart I). The specific type of 
information to be provided under this section is set forth in proposed 
Sec.  488.1010(a)(6)(i) through (vii) and includes, but is not limited 
to, the following: (1) A detailed description of the survey process; 
(2) type and frequency of surveys performed; (3) copies of the AO's 
survey forms; (4) documentation that the survey reports identify the 
comparable Medicare home infusion therapy health and safety 
requirements for each finding of non-compliance with accreditation 
standards; (5) timeline and procedures for monitoring home infusion 
therapy suppliers found to be out of compliance; (6) process for 
addressing deficiencies; and (7) the ability of the AO to conduct 
timely review of accreditation applications.
    We propose at Sec.  488.1010(a)(6)(viii) to require the AOs for 
home infusion therapy suppliers to acknowledge, that as a condition for 
CMS approval, the AO agrees to provide CMS with information extracted 
from each accreditation onsite survey, offsite audit or other 
evaluation strategy as part of its data submission required under Sec.  
488.1010(a)(21)(ii). Upon request, the AO must also provide CMS with a 
copy of the most recent accreditation onsite survey, offsite audit, or 
other evaluation strategy together and any other information related to 
the survey process as CMS may require, including, but not limited to 
corrective action plans.
    Proposed Sec.  488.1010(a)(6)(ix) would require the AOs for home 
infusion therapy suppliers to provide a statement acknowledging that 
they will notify CMS within two business days, using a CMS specified 
format, when an accreditation survey or complaint investigation 
identifies the presence of an immediate jeopardy situation. For 
purposes of this section, the term ``immediate jeopardy'' is defined in 
proposed Sec.  488.1005.
    We propose at Sec.  488.1010(a)(7) to require the AOs for home 
infusion therapy suppliers to establish procedures related to 
performance of onsite surveys, offsite audits, and other survey 
activities. Proposed Sec.  488.1010(a)(7)(i) would require the home 
infusion therapy AOs that performs onsite surveys to make sure that 
they are unannounced and that they establish procedures to prevent 
against unannounced surveys from becoming known to the supplier in 
advance of the visit. The purpose of unannounced onsite surveys is to 
prevent the supplier from performing significant preparations for the 
survey to the extent that their environment would be so modified that 
it does not represent the normal daily operating conditions of the home 
infusion therapy supplier's office. If a provider is given advanced 
notice of a survey, they may attempt to make extensive preparations for 
the survey to the extent that they may attempt to hide patient safety 
issues such as a broken or malfunctioning medication infusion pump, 
areas of risk such as infection control, and ensuring that the patient 
receives the correct type and dosage of medication, poor quality of 
care such as failure to properly cleanse the insertion site before 
inserting IV access, and failure to perform periodic IV site care, or 
non-compliance that would normally be present.
    Proposed Sec.  488.1010(a)(7)(ii) would require home infusion 
therapy AOs that use offsite audits, or other evaluation strategies to 
evaluate the quality of services provided by a home infusion therapy 
supplier, to follow up these offsite audits with periodic onsite 
visits. We believe that it is very important for the AOs that accredit 
home infusion therapy suppliers to follow-up off-site survey reviews 
with periodic on-site visits to ensure that the home infusion therapy 
supplier is complying with all accreditation standards and meeting all 
health and safety regulations. The requirements of this section are 
consistent with existing CMS policy related to the performance of 
unannounced surveys specified in Chapter 2 of the CMS State Operations 
Manual (SOM). Chapter 2 of the State Operations Manual (SOM) applies to 
Medicare-certified providers and suppliers. Our intent for referencing 
Chapter 2 of the SOM is to show that the proposed provisions related to 
onsite surveys for home infusion therapy suppliers are consistent with 
the requirements for Medicare-certified providers and suppliers. Also, 
it is our intent is to have consistent regulations for the approval and 
oversight of AOs, to the extent possible, across all AOs.
    We propose at Sec.  488.1010(a)(8), to require an AO for home 
infusion therapy suppliers to provide a description of the criteria for 
determining the size and composition of the onsite survey or offsite 
audit teams or teams used for other accreditation evaluation 
strategies. These teams would perform onsite surveys at individual home 
infusion therapy supplier locations, offsite audits, and any other 
types of accreditation review activity that is performed by the AO. The 
AO's criteria should include, but not be limited to, the following 
information:
    <bullet> The expected number of individual home infusion therapy 
supplier locations to be surveyed using an onsite survey.
    <bullet> The expected number of home infusion therapy suppliers to 
be surveyed using off-site audits.
    <bullet> A description of other types of accreditation review 
activities to be used.
    <bullet> The reasons for each type of survey (that is, initial 
accreditation survey, reaccreditation survey; and complaint surveys).
    Adherence to the requirements of this section would help CMS ensure 
that each home infusion therapy AO has established criteria for 
determining the appropriate size and composition of its survey teams. 
It is important that an AO assemble survey teams that are large enough 
and have the required knowledge, experience and training to properly 
and adequately survey home infusion therapy suppliers. We believe that 
surveys performed by competent, well trained surveyor teams would 
provide CMS with reasonable assurance that accredited home infusion 
therapy suppliers meet or exceed the applicable quality standards.
    We propose at Sec.  488.1010(a)(9) to require that an AO for home 
infusion therapy suppliers provide CMS with information regarding the 
overall adequacy of the number of surveyors, auditors, and other staff 
available to perform all survey related activities. Under this section, 
the home infusion therapy AO would also be required to provide an 
explanation as to how it would maintain an adequate number of trained 
surveyors on staff. The home infusion therapy AO must also describe its 
ability to increase the size of survey, audit, and other survey program 
staff to match growth in the number of accredited home infusion therapy 
suppliers while maintaining re-accreditation intervals for existing 
accredited home infusion therapy suppliers. The intent of these 
proposed requirements is to ensure that AOs for home infusion therapy 
suppliers maintain sufficient staffing levels over time which would 
enable them to meet the needs of their clients and also perform timely 
and accurate surveys. We recognize that within a given accreditation 
program, there can be variations in the size and complexity of 
individual home infusion therapy suppliers. Therefore, we believe that 
adding a regulatory requirement to specify a uniform size and 
composition of an AO survey teams would not be appropriate.
    We propose at Sec.  488.1010(a)(10) to require that an AO for home 
infusion

[[Page 32456]]

therapy suppliers provide CMS with detailed information about the 
individuals who perform survey activities, including onsite surveys, 
offsite audits and other review processes, for the purpose of ensuring 
accredited home infusion therapy suppliers maintain adherence to the 
accreditation program requirements. More specifically, proposed Sec.  
488.1010(a)(10)(i) would require the AOs to furnish information about 
the numbers of professional and technical staff available for 
accreditation related activities, as well as the educational background 
and experience requirements for its surveyors, auditors and reviewers. 
Proposed Sec.  488.1010(a)(10)(ii) would require the AO to provide 
information about the educational, past experience and employment 
requirements surveyors must meet. Proposed Sec.  488.1010(a)(10)(iii) 
would require the AO to provide information about the content and 
length of the orientation program for newly hired surveyors, auditors 
and reviewers.
    These requirements would help ensure that AOs for home infusion 
therapy suppliers hires survey team staff members that possess the 
requisite knowledge, expertise, training, and experience specific to 
home infusion therapy suppliers. We believe it is imperative that 
surveys be performed by properly educated and trained staff in order to 
be valid and accurate. This proposed section is also intended to help 
ensure that the home infusion therapy AO maintains an adequate number 
of properly trained surveyors so that it would be able to meet the 
demand for all surveys, both initial and re-accreditation, to be 
performed for all clients.
    We propose at Sec.  488.1010(a)(11) to require each AO for home 
infusion therapy suppliers to describe the content, frequency and types 
of in-service training provided to survey and audit personnel. This 
requirement would help ensure that AO personnel who perform surveys, 
audits and other review-related activities maintain the skills and 
knowledge necessary to perform their work with competency. We believe 
that surveys performed by competent, well trained surveyor teams would 
provide CMS with reasonable assurance that accredited home infusion 
therapy suppliers meet or exceed the applicable quality standards.
    We propose at Sec.  488.1010(a)(12) to require AOs for home 
infusion therapy suppliers to provide documentation which describes the 
evaluation systems used to monitor the performance of individual 
surveyors, survey teams, and staff that perform audit activities. This 
proposed requirement would provide CMS with insight into how each home 
infusion therapy AO measures the performance of their surveyors, survey 
teams and staff that perform audit activities. This requirement would 
provide CMS with the ability to assess whether an AO has a credible 
process for ongoing evaluations of its surveyors, survey teams, and 
staff that perform audit activities.
    We believe that the performance evaluation of a home infusion 
therapy AO's surveyors, survey team and other staff that perform survey 
and audit activities can have a significant impact on the effectiveness 
of the home infusion therapy AO's survey processes.
    We propose at Sec.  488.1010(a)(13) to require the AO for home 
infusion therapy suppliers to provide the organization's policies and 
procedures for avoiding and handling conflicts of interest, including 
the appearance of conflicts of interest, involving individuals who 
conduct surveys, audits or participate in accreditation decisions. This 
proposed provision would help CMS to determine if home infusion therapy 
AO has policies to avoid potential conflicts of interest that could 
undermine the integrity of its accreditation program.
    We propose at Sec.  488.1010(a)(14) to require the AO for home 
infusion therapy suppliers to provide CMS with documentation of its 
policies and procedures for handling disputes filed by a home infusion 
therapy supplier regarding survey or audit findings, or an adverse 
decision. The intent of this proposed section is to ensure that a home 
infusion therapy AO has procedures in place to ensure that those 
suppliers who wish to dispute the AO's survey findings or appeal an 
adverse decision are provided with notice of their organizational and 
statutory appeal rights.
    We propose at Sec.  488.1010(a)(15) to require that home infusion 
therapy AOs provide CMS with copies of the policies and procedures to 
be used when an accredited home infusion therapy supplier either--(1) 
removes or ceases furnishing services for which they are accredited; or 
(2) adds home infusion therapy services for which they are not 
accredited. This proposed requirement would ensure there is timely 
communication between the accredited home infusion therapy supplier and 
the AO, when changes in the supplier's circumstances occur that would 
have an impact on the status of their accreditation.
    We propose at Sec.  488.1010(a)(16) to require the home infusion 
therapy AOs to provide CMS with the organization's policies and 
procedures for responding to and investigating complaints and 
grievances against accredited suppliers. These policies and procedures 
should include a specific procedure for coordinating with and making 
referrals, when applicable, to the appropriate licensing bodies, 
ombudsman's offices and CMS. It is our intent that each CMS-approved 
home infusion therapy AO has policies and procedures in place for 
handling complaints and grievances. We believe it is important that any 
complaints against an accredited home infusion therapy supplier be 
investigated promptly and fairly. It is also important that the 
appropriate referrals be made when necessary.
    We propose at Sec.  488.1010(a)(17) to require that the home 
infusion therapy AOs furnish a description of the AO's accreditation 
status decision-making process. Proposed Sec.  488.1010(a)(17)(i) would 
require the organization to furnish its process for addressing a home 
infusion therapy supplier deficiencies with meeting accreditation 
program requirements. This section would also require the home infusion 
therapy AO to provide a description of the procedures used to monitor 
the correction of deficiencies identified during the accreditation 
survey and audit process. It is important for CMS to ensure that the 
home infusion therapy AOs are properly addressing the home infusion 
therapy supplier's deficiencies and requiring appropriate corrective 
action.
    We propose at Sec.  488.1010(a)(17)(ii) to require that the home 
infusion therapy AOs furnish a description of all types and categories 
of accreditation decisions associated with the program, including the 
duration of each of the organization's accreditation decisions.
    Proposed Sec.  488.1010(a)(17)(iii) would require the home infusion 
therapy AO to provide information about its procedures for the 
granting, withholding or removal of accreditation status for home 
infusion therapy suppliers that fail to meet the AO's standards or 
requirements. This proposed section would also require the home 
infusion therapy AO to identify the procedures related to assignment of 
less than full accreditation status or other actions taken by the home 
infusion therapy AO in response to non-compliance with its standards 
and requirements. Since the granting of full or less than full 
accreditation status is an essential component of a home infusion 
therapy AO's accreditation decision process, we believe that it is 
necessary for CMS to receive information on the policies and

[[Page 32457]]

procedures pertaining to these types of decisions as well.
    We propose at Sec.  488.1010(a)(17)(iv) to require the home 
infusion therapy AO to furnish a statement acknowledging that the 
organization agrees to notify CMS (in a manner specified by CMS in 
subregulatory guidance) of any decision to revoke or terminate, 
withdraw, or revise the accreditation status of a home infusion therapy 
supplier within 3 business days from the date the organization takes an 
action. ``Revocation'' or ``termination'' represents an involuntary 
cessation of a home infusion therapy supplier's accreditation. A 
revocation or termination of accreditation could include an action 
taken when a home infusion therapy AO concludes that a home infusion 
therapy supplier is substantially non-compliant with accreditation 
standards and has not corrected its deficient practices within the 
timeframe specified by the home infusion therapy AO. A home infusion 
therapy AO could also revoke or terminate a home infusion therapy 
supplier's accreditation due to the non-payment of accreditation fees. 
We define the term ``revised'' accreditation status as a change in the 
accreditation status of a home infusion therapy supplier based on the 
formal accreditation status categories used by a home infusion therapy 
AO. These changes could include adverse changes that fall short of 
revocation, as well as positive changes reflecting improved compliance. 
This is in contrast to a ``withdrawal'' which is a voluntary decision 
on the part of the home infusion therapy supplier to end its 
participation in the AO's accreditation program.
    Our intent with this proposed requirement is to require that home 
infusion therapy AOs notify CMS when they have taken a final action 
concerning a change in the accreditation status of a home infusion 
therapy supplier. If a home infusion therapy supplier has filed a 
request for an administrative appeal of the AO's decision to revoke or 
terminate accreditation, the action on the part of the home infusion 
therapy AO to revoke or terminate accreditation cannot be finalized 
until after the conclusion of the administrative appeals process. In 
this case, the home infusion therapy AO would be required to send 
notice of their final action to CMS no later than three business days 
after that appeals process has concluded and a final AO determination 
has been made.
    We propose at Sec.  488.1010(a)(18) to require a home infusion 
therapy AOs to provide CMS with a list of all home infusion therapy 
suppliers currently accredited by that home infusion therapy AO. This 
list must include the type and category of accreditation held by each 
home infusion therapy supplier and the expiration date of each 
supplier's current accreditation.
    We propose at Sec.  488.1010(a)(19) to require that the home 
infusion therapy AOs provide CMS with a schedule of all survey activity 
(including but not limited to onsite surveys, offsite audits and other 
types if survey strategies), expected to be conducted by the home 
infusion therapy AO during the 6-month period following submission of 
the application. This proposed requirement would apply to both initial 
and renewal applications. Under this proposed section, the home 
infusion therapy AO would be required to provide us with its survey 
activity schedule for the 6-month period following submission of their 
application for approval to survey and accredit home infusion therapy 
suppliers. We would use the survey schedule to plan our survey 
observation as part of our review of the home infusion therapy AO's 
application.
    We propose at Sec.  488.1010(a)(20) to require that the home 
infusion therapy AO submit a written statement or document that 
demonstrates the organization's ability to furnish CMS with the 
electronic data the home infusion therapy AO must report to CMS as 
required by proposed Sec.  488.1035. The information and data to be 
provided under this section would assist us in providing effective 
oversight of the approved home infusion therapy accreditation programs. 
This information is necessary for effective assessment and validation 
of the home infusion therapy AO's survey process.
    These proposed regulations will require the AO to submit 
documentation to CMS on a periodic basis. The intent of this 
requirement is to ensure that the AO is able to provide CMS with the 
required data electronically. CMS is cutting down of the use of printed 
documents and maximizing the use of electronic document storage.
    We propose at Sec.  488.1010(a)(21) to require that the home 
infusion therapy AO provide a description of the organization's data 
management and analysis system with respect to its surveys and 
accreditation decisions. Proposed Sec.  488.1010(a)(21)(i) would 
require the home infusion therapy AO to furnish a detailed description 
of how the home infusion therapy AO uses its data to assure compliance 
of its home infusion therapy accreditation program with the 
corresponding Medicare requirements.
    We propose at Sec.  488.1010(a)(21)(ii) to require the home 
infusion therapy AO to submit a written statement in which the home 
infusion therapy AO acknowledges that it agrees to submit timely, 
accurate, and complete data, which CMS determines necessary for 
evaluation of the home infusion therapy AO's performance, and which 
would not be unduly burdensome to submit. The data to be submitted, 
according to proposed Sec.  488.1010(a)(21)(ii)(B) would include, 
accredited home infusion therapy supplier identifying information, 
survey findings, quality measures, and notices of accreditation 
decisions. The home infusion therapy AO would further agree to submit 
the necessary data according to the instructions and timeframes CMS 
specifies through subregulatory guidance.
    This data would allow CMS to obtain information about how the home 
infusion therapy AO would use its data management systems to meet or 
exceed Medicare home infusion therapy accreditation requirements as set 
forth in this subpart. The proposed data would also assist us in 
providing effective oversight of the approved home infusion therapy 
accreditation program.
    We propose at Sec.  488.1010(a)(22) to require the home infusion 
therapy AO to furnish the three most recent annual audited financial 
statements from their organization. The purpose of this proposed 
requirement would be to verify that the home infusion therapy AO's 
staffing, funding, and other resources are adequate to perform the 
required surveys, audits and related activities in order to maintain 
the home infusion therapy accreditation program on a national basis. 
This requirement is also intended to insure that a home infusion 
therapy AO has the financial stability to ensure ongoing, stable 
operations and longevity.
    Proposed Sec.  488.1010(a)(23) would require the home infusion 
therapy AOs to provide a written statement, in which the home infusion 
therapy AO acknowledges, as a condition for approval, that the 
organization agrees to the items set forth in Sec.  488.1010(a)(23)(i) 
through (vi).
    Proposed Sec.  488.1010(a)(23)(i) would require the home infusion 
therapy AO to provide a written statement acknowledging that, as a 
condition for approval, that if the home infusion therapy AO decides to 
voluntarily terminate its accreditation program, the home infusion 
therapy AO must provide written notification to CMS and all home 
infusion therapy suppliers accredited by that AO. This written

[[Page 32458]]

notice must be provided at least 90 calendar days in advance of the 
effective date of the home infusion therapy AOs decision to voluntarily 
terminate its CMS-approved accreditation program. This notice must 
contain the all of following information:
    <bullet> Notice that the home infusion therapy AO is voluntarily 
terminating its home infusion therapy accreditation program.
    <bullet> The effective date of the termination.
    <bullet> The implications for the home infusion therapy supplier's 
payment status once their current term of accreditation expires in 
accordance with the requirements set forth at Sec.  488.1045(a).
    Proposed Sec.  488.1010(a)(23)(ii) would require the home infusion 
therapy AO to provide a written statement acknowledging that, as a 
condition for approval, that, a home infusion therapy AO must provide 
written notification of an involuntary withdrawal of CMS approval of 
its home infusion therapy accreditation program to all its accredited 
home infusion therapy suppliers. This written notice must be provided 
by the home infusion therapy AO to all of its accredited home infusion 
therapy suppliers no later than 30 calendar days after the public 
notice is published in the Federal Register announcing that CMS is 
withdrawing its approval of the accreditation program in accordance 
with the requirements at Sec.  488.1045(b). This Federal Register 
notice must state the implications for the providers' or suppliers' 
payment status once their current term of accreditation expires. Home 
infusion therapy suppliers would no longer be eligible to receive 
Medicare payments upon expiration of the current term of accreditation. 
Therefore, it is critical that the home infusion therapy supplier seek 
accreditation immediately through another CMS-approved home infusion 
therapy accreditor.
    Proposed Sec.  488.1010(a)(23)(ii)(A) would require the home 
infusion therapy AO to acknowledge that they must send a second written 
notification, as a reminder to all accredited home infusion therapy 
suppliers within ten calendar days of the organization's removal from 
the list of CMS-designated home infusion therapy AOs. We believe that 
this second reminder to the accredited home infusion therapy suppliers 
who are in danger of having a lapse of accreditation is very important. 
This notice would remind the home infusion therapy suppliers that they 
must seek another home infusion therapy accreditor to avoid a lapse in 
accreditation, and subsequently a lapse in Medicare payment.
    Proposed Sec.  488.1010(a)(23)(ii)(B) would require the home 
infusion therapy AO to acknowledge that they will notify CMS, in 
writing, (either electronically or in hard copy format) within 2 
business days of identification of an immediate jeopardy situation that 
has been identified in any accredited home infusion therapy supplier. 
An immediate jeopardy situation is presented when a provider or 
supplier exhibits a deficiency hat poses serious risk of harm or death 
to the home infusion therapy supplier's patients, staff or visitors, or 
poses a hazard to the general public. Immediate jeopardy situations are 
of such a serious nature that it is important that they be identified 
and removed as quickly as possible. We propose the 2-day notification 
requirement because CMS must notified of immediate jeopardy situations 
as quickly as possible so that we can monitor these serious situations 
and take action as appropriate.
    We propose at Sec.  488.1010(a)(23)(iii) to require the home 
infusion therapy AO to provide CMS with an annual summary of 
accreditation activity data and trends, including, but not limited to, 
deficiencies, complaints, terminations, withdrawals, denials, 
accreditation decisions, and other survey related activities as 
specified by CMS. We believe that it is important for CMS to monitor 
this information as part of our oversight of the home infusion therapy 
AOs performance.
    Proposed Sec.  488.1010(a)(23)(iv), would require a home infusion 
therapy AO to work collaboratively with CMS in the event that CMS 
terminates the home infusion therapy AO's approved status, to direct 
its accredited home infusion therapy suppliers to the remaining CMS-
approved home infusion therapy AOs within a reasonable period of time. 
We would require the terminated home infusion therapy AO to perform 
this task because its accredited home infusion therapy suppliers would 
be left with no accreditation as a result of the termination of the 
home infusion therapy AOs CMS-approval. Therefore, we believe that the 
terminated home infusion therapy AO has some responsibility to help 
their accredited home infusion therapy suppliers seek alternative 
accreditors as soon as possible.
    Proposed Sec.  488.1010(a)(23)(v), would require the home infusion 
therapy AOs to notify CMS of any significant proposed changes in its 
CMS-approved accreditation program requirements or survey process. 
Under this section, the home infusion therapy AO would be required to 
submit their notice of revised program requirements or changes in the 
survey process to CMS in writing no less than 60 days in advance of the 
proposed implementation date. As required by proposed Sec.  
488.1030(c)(1), the home infusion therapy AO would be required to agree 
not to implement the proposed changes without prior written notice of 
continued program approval from CMS, except as provided for at Sec.  
488.1030(c)(4).
    Proposed Sec.  488.1010(a)(23)(vi), would require the home infusion 
therapy AOs to provide a statement acknowledging that if they receive a 
written notice from CMS which states that there has been a change in 
the applicable Medicare home infusion therapy substantive health and 
safety requirements, the home infusion therapy AO must provide CMS with 
proposed corresponding changes in the home infusion therapy 
accreditation requirements for its CMS-approved home infusion therapy 
accreditation program. This requirement is intended to ensure that the 
AO's accreditation standards continue to meet or exceed those of 
Medicare, and that the AO's survey process remains comparable with that 
of Medicare.
    Section 488.1010(a)(23)(vi) provides that in the event that CMS 
makes a change in the applicable home infusion therapy accreditation 
requirements, the home infusion therapy AO must comply with several 
requirements. First, proposed Sec.  488.1010(a)(23)(vi)(A) would 
require the home infusion therapy AO to submit its responsive proposed 
changes in their accreditation requirements and survey processes to CMS 
within 30 calendar days of the date of the written CMS notice to the 
home infusion therapy AO or by a date specified in the notice, 
whichever is later. However, CMS will give due consideration to a home 
infusion therapy AO's request for an extension of the deadline as long 
as it is submitted prior to the due date. Second, proposed Sec.  
488.1010(a)(23)(vi)(B) would require that the home infusion therapy AO 
not implement its proposed responsive changes without prior written 
notice of continued program approval from CMS, except as provided for 
at Sec.  488.1030(b)(1)(v).
    Proposed Sec.  488.1010(a)(24) would require the home infusion 
therapy AOs to provide CMS with a listing of the organization's 
proposed fees for home infusion therapy accreditation. The home 
infusion therapy AO must notify CMS of any plans for reducing the 
burden and cost of accreditation to small or rural home infusion 
therapy suppliers. While CMS does not

[[Page 32459]]

undertake to set or regulate the fees charges by a home infusion 
therapy AO, we do review fees charged by AOs to determine whether they 
are reasonable as directed by sections 1834(u)(5)(A)(iii) of the Act.
    Proposed Sec.  488.1010(b) would require home infusion therapy AOs 
to agree to submit any additional information, documentation, or 
attestations, including items not previously listed that CMS may deem 
necessary to make a determination for approval or denial of the home 
infusion therapy AO's application. Should we require this additional 
information, we would notify the home infusion therapy AO of the 
request and provide the home infusion therapy AO with a reasonable 
timeframe to submit the requested information.
    We propose at Sec.  488.1010(c) to allow a home infusion therapy AO 
to withdraw its initial application for CMS's approval of its home 
infusion therapy accreditation program at any time before we publish 
the final Federal Register notice described at Sec.  488.1020(b). The 
intent of this provision is to provide home infusion therapy AOs that 
have encountered difficulty meeting the requirements described at Sec.  
488.1010(a) during the application process with the option to 
voluntarily withdraw their application before CMS publishes the final 
decision in the Federal Register as required by proposed Sec.  
488.1020(b). Proposed Sec.  488.1020(b) would require that the final 
notice, published by CMS, specify the basis for our decision. Because 
the Federal Register is a public forum, we believe it is likely that 
home infusion therapy AOs would choose to voluntarily withdraw their 
application instead of having information about the non-compliance of 
their home infusion therapy accreditation program made publicly 
available. This may be especially true for those home infusion therapy 
AOs that wish to reapply for approval of their accreditation program in 
the future. A voluntary withdrawal of an application by the home 
infusion therapy AO would terminate the application review process 
prior to publication of the final decision in the Federal Register.
    Proposed Sec.  488.1010(d) would require CMS to complete its review 
of an application submitted by a home infusion therapy AO within 210 
calendar days from the date that CMS determines that the application is 
complete. We propose that to determine completeness, each application 
would be assigned to a technical review team upon receipt by CMS. This 
team would perform a completeness review to determine if the 
application contains all documents and supplemental information 
required by proposed Sec.  488.1010(a). Lastly, we propose that if the 
application is not complete, the review team would contact the home 
infusion therapy AO and request that they submit any missing 
information or documents in accordance with Sec.  488.1010(b).
    We seek public comment on the proposal related to the proposed 
application requirements set forth in proposed Sec.  488.1010. We 
further seek comments on the burden related to the requirements of the 
application procedure.
(4) Resubmitting a Request (Sec.  488.1015)
    Proposed Sec.  488.1015(a) would require that except as provided in 
paragraph (b), a home infusion therapy AO whose request for CMS's 
approval or re-approval of a home infusion therapy accreditation 
program was denied, or an organization that has voluntarily withdrawn 
an initial application, could resubmit its application if the 
organization had: (1) Revised its accreditation program to address the 
issues related to the denial of its previous request or its voluntary 
withdrawal; and (2) resubmitted the application in its entirety.
    Proposed Sec.  488.1015(b) would provide that a home infusion 
therapy AO that had asked for reconsideration of an application denial 
by CMS could not submit a new application until the pending 
reconsideration was administratively final. This provision would ensure 
that review of accreditation matters on reconsideration are pending 
before only one administrative agency and one administrative level at a 
time.
    We seek public comments on the requirements of proposed Sec.  
488.1015.
(5) Public Notice and Comment (Sec.  488.1020)
    Proposed Sec.  488.1020(a) would require CMS to publish a notice in 
the Federal Register upon receipt of a complete application package. 
The notice would identify the organization, the type of home infusion 
therapy suppliers covered by the accreditation program, and provides 
for at least a 30-day public comment period (which begins on the date 
of publication of the Federal Register notice). The purpose of the 
Federal Register notice is to notify the public that a national AO has 
filed an application for approval of a home infusion therapy 
accreditation program and to seek public comment in response to this 
application. The requirement for the publication of a notice in the 
Federal Register when an application is received is an existing 
regulatory procedural requirement for all other AO types. We have added 
this requirement to the home infusion therapy AO approval and oversight 
regulations for consistency.
    Proposed Sec.  488.1020(b) would require that when CMS approves or 
re-approves an application for approval of a home infusion therapy AO's 
accreditation program, a final notice would be published in the Federal 
Register. This notice would have to specify the basis for CMS' 
decision. Proposed Sec.  488.1020(b)(1), would require that our final 
notice include at a minimum, the following information: (1) How the 
accreditation program met or exceeded Medicare accreditation program 
requirements; (2) the effective date of the CMS approval, which is not 
later than the publication date of the notice; and (3) the term of the 
approval (6 years or less).
    If CMS makes a decision to disapprove a home infusion therapy AOs 
application, our final notice would state the deficiencies found in the 
application and the reason why the AOs accreditation program did not 
met or exceeded Medicare accreditation program requirements. However, 
an AO has the option of voluntarily withdrawing its application at any 
time up until the publication of the final notice.
    We propose at Sec.  488.1020(b)(2) that if CMS did not approve a 
home infusion therapy AO's application for approval of its home 
infusion therapy accreditation program, the final notice would explain 
how the home infusion therapy AO failed to meet Medicare home infusion 
therapy accreditation program requirements. This notice would indicate 
the effective date of the decision.
    We seek comment on the requirements of proposed Sec.  488.1020, 
including on the appropriate term for approval of an AO.
(6) Release and Use of Accreditation Surveys (Sec.  488.1025)
    Proposed Sec.  488.1025 would require a home infusion therapy AO to 
include, in its accreditation agreement with each home infusion therapy 
supplier, an acknowledgement that the home infusion therapy supplier 
agrees to release to CMS a copy of its most current accreditation 
survey and any information related to the survey that CMS may require, 
including the home infusion therapy supplier's corrective action plans. 
Proposed Sec.  488.1025(a) would provide that CMS may determine that a 
home infusion therapy supplier does not meet the applicable Medicare

[[Page 32460]]

conditions or requirements on the basis of its own investigation of the 
accreditation survey or any other information related to the survey.
    Proposed Sec.  488.1025(b) would prohibit CMS from disclosing home 
infusion therapy survey reports or survey related information according 
to section 1865(b) of the Act. However, CMS would be permitted to 
publically disclose an accreditation survey and information related to 
the survey, upon written request, to the extent that the accreditation 
survey and survey information is related to an enforcement action taken 
by CMS.
    CMS would use the home infusion therapy supplier accreditation 
survey information for purposes such as: (1) Confirmation of the home 
infusion therapy supplier's eligibility for Medicare participation; (2) 
to review and approve the home infusion therapy AO's recommendations 
regarding accreditation; (3) to review the home infusion therapy AO's 
investigations of complaints; and (4) to review the corrective action 
taken by the AO when deficiencies are found on survey.
    We seek public comments on the requirements of proposed Sec.  
488.1025.
(7) Ongoing Review of Accrediting Organizations (Sec.  488.1030)
    Proposed Sec.  488.1030 would clarify that a formal accreditation 
program review could be opened on an ongoing basis. Specifically, this 
section would describe standardized requirements related to the ongoing 
federal review of home infusion therapy AOs and their approved 
accreditation programs. This proposed section would clarify that CMS 
oversight of accreditation programs is consistent across home infusion 
therapy AOs. We are committed to treating all home infusion therapy AOs 
subject to our oversight in the same manner. Under proposed Sec.  
488.1030, we could conduct the following three types of reviews of an 
AOs home infusion therapy accreditation programs: (1) Performance 
review; (2) comparability review; and (3) CMS-approved accreditation 
program review.
    Proposed Sec.  488.1030(a) would allow CMS to perform a performance 
review, in which we would evaluate the performance of each CMS-approved 
home infusion therapy accreditation program on an ongoing basis. 
Specifically, we would review the following aspects of a home infusion 
therapy AO's for home infusion therapy program performance: The 
organization's survey activity, and the organization's continued 
fulfillment of the requirements stated in Sec.  488.1010.
    Proposed Sec.  488.1030(b) would allow CMS to perform a 
comparability review to assess the equivalency of a home infusion 
therapy AO's CMS-approved home infusion therapy accreditation program 
requirements with comparable Medicare home infusion therapy 
accreditation requirements. Proposed Sec.  488.1030(b)(1) would allow 
CMS to perform a comparability review when CMS imposes new or revised 
Medicare accreditation requirements. When this occurs, proposed Sec.  
488.1030(b)(1) would require CMS to provide written notice to the home 
infusion therapy AOs when changes have been made to the Medicare home 
infusion therapy accreditation requirements. Proposed Sec.  
488.1030(b)(2) would require the home infusion therapy accrediting 
organization to make revision to its home infusion therapy 
accreditation standards or survey process so as to incorporate the new 
or revised Medicare accreditation requirements.
    Proposed Sec.  488.1030(b)(3) would further require that the 
written notice sent by CMS to the home infusion therapy AO specify a 
deadline (not less than 30 days) by which the home infusion therapy AO 
must prepare and submit their proposed home infusion therapy 
accreditation program requirement revisions and the timeframe for 
implementation. Proposed Sec.  488.1030(b)(4) would allow a home 
infusion therapy AO to submit a written request for an extension of the 
submission deadline as long as this request was submitted prior to the 
original deadline.
    Proposed at Sec.  488.1030(b)(5) would require that, after 
completing the comparability review, CMS would provide written 
notification to the home infusion therapy AO, specifying whether or not 
their revised home infusion therapy accreditation program standards 
continued to meet or exceed all applicable Medicare requirements. We 
propose at Sec.  488.1030(b)(6) that if, no later than 60 days after 
receipt of the home infusion therapy AO's proposed accreditation 
standard changes, CMS did not provide the written notice to the home 
infusion therapy AO, then the revised home infusion therapy program 
accreditation standards would be deemed to meet or exceed all 
applicable Medicare requirement and the accreditation program would 
have continued CMS-approval without further review or consideration.
    Proposed Sec.  488.1030(b)(7) would provide that if a home infusion 
therapy AO was required to submit a new application because CMS imposed 
new regulations or made significant substantive revisions to the 
existing regulations, CMS would provide notice of the decision to 
approve or disapprove the application within the time period specified 
in Sec.  488.1010(d).
    We propose at Sec.  488.1030(b)(8) that if a home infusion therapy 
AO failed to submit its proposed changes within the required timeframe, 
or failed to implement the proposed changes that had been determined by 
CMS to be comparable, CMS could open an accreditation program review in 
accordance with Sec.  488.1030(d).
    When a home infusion therapy AO proposes to adopt new home infusion 
therapy accreditation standards or changes, in its survey process, we 
propose at Sec.  488.1030(c)(1) to require the home infusion therapy AO 
to provide notice to CMS no less than 60 days prior to the planned 
implementation date of the proposed changes. Proposed Sec.  
488.1030(c)(2) would prohibit the home infusion therapy AO from 
implementing these changes before receiving CMS' approval except as 
provided in Sec.  488.1030(c)(4). Proposed Sec.  488.1030(c)(3) would 
require that this written notice contain a detailed description of the 
changes to be made to the organization's home infusion therapy 
accreditation standards, including a detailed crosswalk (in table 
format) that states the exact language of the revised accreditation 
requirements and the corresponding Medicare requirements for each. The 
requirements of Sec. Sec.  488.1030(c)(2) and 488.10(c)(3) would ensure 
that the home infusion therapy AO provides CMS with advance notice of 
any proposed changes to their home infusion therapy accreditation 
requirements and survey processes. This notice would allow CMS time to 
review these proposed changes to ensure that the revised home infusion 
therapy accreditation standards and survey processes continue to meet 
or exceed all applicable Medicare home infusion therapy requirements 
and continue to be comparable to all applicable Medicare home infusion 
therapy survey processes, and provide a response to the home infusion 
therapy AO. This section would also prohibit home infusion therapy AOs 
from implementing any of the proposed changes in their home infusion 
therapy accreditation requirements and survey processes, until CMS 
approval has been received. We seek comment on this proposal.
    Proposed Sec.  488.1030(c)(4) would require CMS to provide written 
notice to the home infusion therapy accrediting organization indicating 
whether the home infusion therapy accreditation program, including the 
proposed revisions, continued or does not

[[Page 32461]]

continue to meet or exceed all applicable Medicare home infusion 
therapy requirements. If CMS found that the accrediting organization's 
home infusion therapy accreditation program, including the proposed 
revisions did not continue to meet or exceed all applicable Medicare 
home infusion therapy requirements. CMS would have to state the reasons 
for these findings.
    Proposed Sec.  488.1030(c)(5) would require CMS to provide this 
written notice to the home infusion therapy AO by the 60th calendar day 
following receipt of the home infusion therapy AO's written proposed 
changes as to whether the home infusion therapy AO's revised home 
infusion therapy accreditation program standards and survey processes 
have been be deemed to meet or exceed all applicable Medicare home 
infusion therapy requirements and have continued CMS approval without 
further review or consideration. This proposed section would further 
specify that if CMS failed to provide the required written notice to 
the home infusion therapy AO by the 60 day deadline, the home infusion 
therapy AO's revised accreditation program standards would be deemed to 
meet or exceed all applicable Medicare requirements and have continued 
CMS approval without further review or consideration.
    Proposed Sec.  488.1030(c)(5) would permit CMS to open an 
accreditation program review, in accordance with proposed Sec.  
488.1030(d), if a home infusion therapy AO implemented changes to their 
home infusion therapy accreditation requirements or survey process that 
were not determined nor deemed by CMS to be comparable to the 
applicable Medicare requirements.
    We propose at Sec.  488.1030(d) to permit CMS to initiate an 
accreditation program review when a comparability or performance review 
reveals evidence that a home infusion therapy AO's CMS-approved home 
infusion therapy accreditation program is in substantial non-compliance 
with the requirements of the proposed home infusion therapy health and 
safety regulations contained in 42 CFR part 486, subpart B. Proposed 
Sec.  488.1030(d)(1) would require CMS to provide written notice to the 
home infusion therapy AO when a home infusion therapy accreditation 
program review is initiated. Proposed Sec.  488.1030(d)(1)(i) through 
(iv) would set forth the requirements for this written notice, which 
should contain the following information: (i) A statement of the 
instances, rates or patterns of non-compliance identified, as well as 
other related information, if applicable; (ii) a description of the 
process to be followed during the review, including a description of 
the opportunities for the home infusion therapy AO to offer factual 
information related to CMS' findings; (iii) a description of the 
possible actions that may be imposed by CMS based on the findings of 
the accreditation program review; and, (iv) the actions the home 
infusion therapy AO would have to take to address the identified 
deficiencies, and the length of the accreditation program review 
probation period, which will include monitoring of the home infusion 
therapy AO's performance and implementation of the corrective action 
plan. The probation period is not to exceed 180 calendar days from the 
date that CMS has approved the home infusion therapy AOs plan of 
correction (which is the AO written plan for correcting any 
deficiencies in its home infusion therapy accreditation program that 
were found by CMS on a program review).
    At Sec.  488.1030(d)(2), we propose that CMS would review and 
approve the home infusion therapy AO's plan of correction for 
acceptability within 30 days after receipt. Proposed Sec.  
488.1030(d)(3) would provide that CMS will monitor the implementation 
of the home infusion therapy accrediting organization's plan of 
correction for a period not to exceed 180 days from the date of 
approval. During the 180-day review period, CMS would monitor 
implementation of the accepted plan of correction as well as progress 
towards correction of identified issues and areas of non-compliance 
that triggered the accreditation program review.
    We propose at Sec.  488.1030(d)(4) to authorize CMS to place the 
home infusion therapy AO's CMS-approved accreditation program on 
probation for a subsequent period of up to 180 calendar days, if 
necessary. The additional period of time may be necessary if CMS 
determines, as a result of the home infusion therapy accreditation 
program review or a review of an application for renewal of an existing 
CMS-approved accreditation program, that the home infusion therapy AO 
has failed to meet any of the requirements of Sec.  488.1010, or has 
made significant progress correcting identified issues or areas of non-
compliance, but requires additional time to complete full 
implementation of corrective actions or demonstrate sustained 
compliance. If a home infusion therapy AO's term of approval expires 
before the 180-day period is completed, the probationary period will be 
deemed to end upon the day of expiration of the home infusion therapy 
AO's term of approval. In the case of a renewal application where we 
have placed the home infusion therapy accreditation program on 
probation, we propose that any approval of the applications must be 
conditional while the program remains on probation.
    If we place a home infusion therapy AO's accreditation program on 
probation, proposed Sec.  488.1030(d)(4)(i) would require CMS to issue 
a written determination to the home infusion therapy AO, within 60 
calendar days after the end of any probationary period. The written 
determination must state whether or not the CMS-approved home infusion 
therapy accreditation program continued to meet the requirements of 
this section and the reasons for the determination.
    If we determined that withdrawal of approval from a CMS-approved 
accreditation program was necessary, proposed Sec.  488.1030(d)(4)(ii) 
would require CMS to send written notice to the home infusion therapy 
AO which contained the following information: (1) Notice of CMS' 
removal of approval of the home infusion therapy AOs accreditation 
program;(2) the reason(s) for the removal; and (3) the effective date 
of the removal determined in accordance with Sec.  488.1030(d)(4)(ii).
    If CMS withdrew the approval of a home infusion therapy AO 
accreditation program, proposed Sec.  488.1030(d)(4)(iii) would require 
CMS to publish a notice of its decision to withdraw approval of the 
accreditation program in the Federal Register. This notice would have 
to include the reasons for the withdrawal, and a notification that the 
withdrawal would become effective 60 calendar days after the date of 
publication in the Federal Register. The publication of this Federal 
Register Notice is notice would be necessary to put interested 
stakeholders, such as the home infusion therapy suppliers that are 
accredited by the affected AO on notice about the withdrawal of CMS-
approval of their AO, because this will have an effect on the status of 
their accreditation.
    Proposed Sec.  488.1030(e) would allow CMS to immediately withdraw 
the CMS approval of an home infusion therapy AO's home infusion therapy 
accreditation program, if at any time CMS makes a determination that 
the continued approval of that home infusion therapy accreditation 
program poses an immediate jeopardy to the patients of the entities 
accredited under the program; or the continued approval otherwise 
constitutes a significant hazard to the public health. We propose at 
Sec.  488.1030(f) to mandate that any home infusion therapy AO whose 
CMS approval of its home infusion therapy accreditation program has 
been

[[Page 32462]]

withdrawn must notify, in writing, each of its accredited home infusion 
therapy suppliers of the withdrawal of CMS approval and the 
implications for the home infusion therapy suppliers' payment status no 
later than 30 calendar days after the notice is published in the 
Federal Register. This requirement would protect the home infusion 
therapy suppliers that have received their accreditation from a home 
infusion therapy AO that has had its CMS approval of their home 
infusion therapy accreditation program removed.
    We seek public comments on the requirements of proposed Sec.  
488.1030. We further seek public comment related to the burden 
associated with the requirements of proposed Sec.  488.1030.
(8) Ongoing Responsibilities of a CMS-Approved Accreditation 
Organization (Sec.  488.1035)
    Proposed Sec.  488.1035 would require a home infusion therapy AO to 
provide certain information to CMS and carry out certain activities on 
an ongoing basis. More specifically proposed Sec.  488.1035(a) would 
require the home infusion therapy AO to provide CMS with all of the 
following in written format (either electronic or hard copy):
    <bullet> Copies of all home infusion therapy accreditation surveys, 
together with any survey-related information that CMS may require 
(including corrective action plans and summaries of findings with 
respect to unmet CMS requirements);
    <bullet> Notice of all home infusion therapy accreditation 
decisions.
    <bullet> Notice of all complaints related to home infusion therapy 
suppliers.
    <bullet> Information about all home infusion therapy accredited 
suppliers against which the home infusion therapy AO has taken remedial 
or adverse action, including revocation, withdrawal, or revision of the 
home infusion therapy supplier's accreditation.
    <bullet> Summary data specified by CMS that relate to the past 
year's home infusion therapy accreditation activities and trends which 
is to be provided on an annual basis.
    <bullet> Notice of any proposed changes in its home infusion 
therapy accreditation standards or requirements or survey process.
    Proposed Sec.  488.1035(b) would require a home infusion therapy AO 
to submit an acknowledgment of receipt of CMS' notification of a change 
in CMS requirements within 30 days from the date of the notice. 
Proposed Sec.  488.1035(c) would require that a home infusion therapy 
AO permit its surveyors to serve as witnesses if CMS takes an adverse 
action based on accreditation findings.
    Proposed Sec.  488.1035(d) would require that within 2 business 
days of identifying a deficiency of an accredited home infusion therapy 
supplier that poses immediate jeopardy to a beneficiary or to the 
general public, the home infusion therapy AO must provide CMS with 
written notice of the deficiency and any adverse action implemented by 
the home infusion therapy AO. Proposed Sec.  488.1035(e) would require 
that within 10 calendar days after our notice to a CMS-approved home 
infusion therapy AO that CMS intends to withdraw approval of the home 
infusion therapy AO, the home infusion therapy AO must provide written 
notice of the withdrawal to all of the organization's accredited home 
infusion therapy suppliers.
    We seek public comment on the requirements of proposed Sec.  
488.1035. We further seek public comments related to the burden 
associated with the requirements of proposed Sec.  488.1035.
(9) Onsite Observations of Accrediting Organization Operations (Sec.  
488.1040)
    We propose at Sec.  488.1040(a) and (b) to permit CMS to conduct an 
onsite inspection of the home infusion therapy AOs operations and 
offices at any time to verify the organization's representations and to 
assess the organization's compliance with its own policies and 
procedures. Activities to be performed by CMS staff during the onsite 
inspections may include, but are not limited to: (1) Interviews with 
various home infusion therapy AO staff; (2) review of documents, and 
survey files, audit tools and related records; (3) observation of 
meetings concerning the accreditation process; (4) auditing meetings 
concerning the accreditation process, (5) observation of in-progress 
surveys and audits; (6) evaluation of the home infusion therapy AO's 
survey results and accreditation decision-making process.
    CMS would perform onsite visits to a home infusion therapy AOs 
offices only for specific reasons. For example, when an AO had filed an 
initial or renewal application for approval of its home infusion 
therapy accreditation program, CMS would perform an onsite visit to the 
AOs offices as part of the application review process. If CMS has 
opened a program review and put the home infusion therapy AO on 
probation for a 180 day period, we would perform an onsite visit to the 
AOs offices to check of the AOs progress in implementing the plan of 
correction.
    If CMS decides to perform on onsite visit to the home infusion 
therapy AOs offices, we would notify the AO. We would coordinate with 
the AO staff to schedule the onsite visit at mutually agreed upon date 
and time.
    The intended purpose of this section is to provide CMS with an 
opportunity to observe, first hand, the daily operations of home 
infusion therapy AOs and to ensure that the home infusion therapy 
accreditation program is fully implemented and operational as presented 
in the written application. Onsite inspections would strengthen our 
continuing oversight of the home infusion therapy AO performance 
because they provide an opportunity for us to corroborate the verbal 
and written information submitted to CMS by the home infusion therapy 
AO in their initial and renewal applications. In addition, onsite 
inspections would allow CMS to assess the home infusion therapy AO's 
compliance with its own policies and procedures.
    We seek public comments on the requirements of proposed Sec.  
488.1040. We also seek comments regarding the burden related to Sec.  
488.1040.
(10) Voluntary and Involuntary Termination (Sec.  488.1045)
    The proposed provisions related to the voluntary and involuntary 
termination of CMS approval of a home infusion therapy AO's 
accreditation program are set out at proposed Sec.  488.1045. Proposed 
Sec.  488.1045(a) would address voluntary termination of a home 
infusion therapy AO's accreditation program by the home infusion 
therapy AO. A home infusion therapy AO that decides to voluntarily 
terminate its CMS-approved accreditation program must provide written 
notice to CMS and each of its accredited home infusion therapy 
suppliers at least 90 days in advance of the effective date of the 
termination. This written notice must state the implications for the 
home infusion therapy supplier's payment should there be a lapse in 
their accreditation status.
    Proposed standard Sec.  488.1045(b) would address CMS involuntary 
termination of a home infusion therapy AO's CMS-approved accreditation 
program. Once CMS publishes the notice in the Federal Register 
announcing its decision to terminate the accrediting organization's 
home infusion therapy accreditation program, the home infusion therapy 
AO would have to provide written notification to all home infusion 
therapy suppliers accredited under its CMS-approved home infusion 
therapy accreditation program no later than 30 calendar days after the 
notice was published in the Federal Register. This notice would state 
that CMS is withdrawing its

[[Page 32463]]

approval of the home infusion therapy AO's accreditation program and 
the implications for their payment, should there be a lapse in their 
accreditation status.
    Proposed Sec.  488.1045(c) addresses the requirements that would 
apply to both voluntary and involuntary terminations of CMS approval of 
the home infusion therapy AO. Proposed Sec.  488.1045(c)(1) would 
provide that the accreditation status of affected home infusion therapy 
suppliers would be considered to remain in effect until their current 
term of accreditation expired. In the case where a home infusion 
therapy AO has been removed as a CMS-approved AO, any home infusion 
therapy supplier that is accredited by the organization during the 
period beginning on the date the organization was approved by CMS until 
the date the organization was removed, shall be considered accredited 
for its remaining accreditation period.
    Proposed Sec.  488.1045(c)(2) would provide that for any home 
infusion therapy supplier, whose home infusion therapy AO's CMS 
approval has been voluntarily or involuntarily terminated by CMS, and 
who wishes to continue to receive reimbursement from Medicare, must 
provide written notice to CMS at least 60-calendar days prior to its 
accreditation expiration date which states that the home infusion 
therapy supplier has submitted an application for accreditation under 
another CMS-approved home infusion therapy accreditation program. This 
section further states that failure to comply with this 60-calendar day 
requirement prior to expiration of their current accreditation status 
could result in a suspension of payment.
    Proposed Sec.  488.1045(c)(3) would require that the terminated 
home infusion therapy AO must provide a second written notification to 
all accredited suppliers ten calendar days prior to the organization's 
accreditation program effective date of termination.
    The proposed notice provisions at Sec.  488.1045(c)(2) and (3) 
could help prevent home infusion therapy suppliers from suffering 
financial hardship that could result from a denial of payment of 
Medicare claims if their home infusion therapy accreditation lapses as 
a result of the voluntary or involuntary termination of a CMS-approved 
home infusion therapy AO program.
    We propose at Sec.  488.1045(d), that if a home infusion therapy 
supplier requests a voluntary withdrawal from accreditation, it will 
not be possible for the withdrawal to become effective until the home 
infusion therapy AO completes three required steps. First, the AO would 
have to contact the home infusion therapy supplier to seek written 
confirmation that the home infusion therapy supplier intended to 
voluntarily withdraw from the accreditation program. Second, the home 
infusion therapy AO would have to advise home infusion therapy 
supplier, in writing, of the statutory requirement at 
1861(iii)(3)(D)(i)(III) of the Act for requiring accreditation for all 
home infusion therapy suppliers. Third, the home infusion therapy AO 
would have to advise the home infusion therapy supplier of the possible 
payment consequence for a lapse in accreditation status. Proposed Sec.  
488.1045(d)(3) would require the home infusion therapy AO to submit 
their final notice of the voluntary withdrawal of accreditation by the 
home infusion therapy supplier five business days after the request for 
voluntary withdrawal was ultimately processed and effective.
    We believe that it is important that the home infusion therapy seek 
confirmation that the home infusion therapy supplier has indeed 
requested a voluntary termination of their accreditation. This 
confirmation would prevent the erroneous termination of the 
accreditation of a home infusion therapy supplier that did not request 
it or had subsequently withdrawn their request for voluntary 
termination.
    We believe that it is also important for the home infusion therapy 
AO to provide the required written notice to the home infusion therapy 
supplier that requests a voluntary withdrawal from accreditation, so 
that the home infusion therapy supplier has been fully informed of the 
requirements for accreditation according to section 
1861(iii)(3)(D)(i)(III) and the payment consequences of being 
unaccredited. If there is a lapse in the accreditation status of the 
home infusion therapy supplier, they will not be eligible to receive 
payment from Medicare for services furnished to Medicare beneficiaries. 
A home infusion therapy infusion therapy supplier that is unaware of 
this payment consequence could suffer financial hardship due to 
furnishing services to Medicare beneficiaries for which they cannot be 
reimbursed after a lapse in accreditation.
    We seek public comments on the requirements of proposed Sec.  
488.1045. We also seek comments regarding the burden related to Sec.  
488.1045.
(11) Reconsideration (Sec.  488.1050)
    We propose at Sec.  488.1050 to set forth the appeal process 
through which a home infusion therapy AO may request reconsideration of 
an unfavorable decision made by CMS. At proposed Sec.  488.1050(b)(1), 
the home infusion therapy AO would have to submit a written request for 
reconsideration within 30 calendar days of the receipt of the CMS 
notification of an adverse determination or non-renewal. Proposed Sec.  
488.1050(b)(2) would require the home infusion therapy AOs to submit a 
written request for reconsideration which specifies the findings or 
issues with which the home infusion therapy AO disagreed and the 
reasons for the disagreement. Proposed Sec.  488.1050(b)(3) would allow 
a home infusion therapy AO to withdraw their request for 
reconsideration at any time before the administrative law judge issues 
a decision.
    We propose at Sec.  488.1050(c)(1) to establish requirements for 
CMS when a request for reconsideration has been received from a home 
infusion therapy AO. Specifically, CMS would be required to provide the 
home infusion therapy AO with: The opportunity for an administrative 
hearing with a hearing officer appointed by the Administrator of CMS; 
the opportunity to present, in writing and in person, evidence or 
documentation to refute CMS' notice of denial, termination of approval, 
or non-renewal of CMS approval and designation. Section 488.1050(c)(2) 
would require CMS to send the home infusion therapy AO written notice 
of the time and place of the informal hearing at least 10 business days 
before the scheduled hearing date.
    We propose at Sec.  488.1050(d)(1) to establish rules for the 
administrative hearing such as who may attend the hearing on behalf of 
each party, including but not limited to legal counsel, technical 
advisors, and non-technical witnesses that have personal knowledge of 
the facts of the case. This proposed section would also specify the 
type of evidence that may be introduced at the hearing. Specifically, 
we would specify and clarify, at proposed Sec.  488.1050(d)(4), that 
the hearing officer would not have the authority to compel by subpoena 
the production of witnesses, papers, or other evidence. Proposed Sec.  
488.1050(d)(5) would provide that the legal conclusions of the hearing 
officer within 45 calendar days after the close of the hearing. 
Proposed Sec.  488.1050(d)(6) would require the hearing officer to 
present his or her findings and recommendations in a written report 
that includes separately numbered findings of fact. According to 
proposed Sec.  488.1050(d)(7), the decision of the hearing officer 
would be final.
    We seek public comments on the requirements of proposed Sec.  
488.1050.

[[Page 32464]]

C. Payment for Home Infusion Therapy Services

1. Proposed Temporary Transitional Payment for Home Infusion Therapy 
Services for CYs 2019 and 2020
    Section 50401 of the BBA of 2018 (Pub. L. 115-123) amended section 
1834(u) of the Act by adding a new paragraph (7) that establishes a 
home infusion therapy services temporary transitional payment for 
eligible home infusion suppliers for certain items and services 
furnished in coordination with the furnishing of transitional home 
infusion drugs beginning January 1, 2019. This temporary payment covers 
the cost of the same items and services, as defined in section 
1861(iii)(2)(A) and (B) of the Act, and outlined in section IV.A.2 in 
this proposed rule, related to the administration of home infusion 
drugs. The temporary transitional payment would begin on January 1, 
2019 and end the day before the full implementation of the home 
infusion therapy benefit on January 1, 2021, as required by section 
5012(d) of the 21st Century Cures Act.
a. Transitional Home Infusion Drugs
    Section 1834(u)(7)(A)(iii) of the Act defines the term 
``transitional home infusion drug'' using the same definition as `home 
infusion drug' under section 1861(iii)(3)(C) of the Act, which is a 
drug or biological administered intravenously, or subcutaneously for an 
administration period of 15 minutes or more, in the home of an 
individual through a pump that is an item of DME. However, section 
1834(u)(7)(A)(iii) of the Act includes an exception to the definition 
of `home infusion drug' if the drug is identified under section 
1834(u)(7)(C) of the Act. This provision specifies the HCPCS codes for 
the drugs and biologicals covered under the Local Coverage 
Determinations (LCDs) for External Infusion Pumps. In addition, 
subsequent infusion drug additions to the LCDs and compounded infusion 
drugs not otherwise classified, as identified by HCPCS codes J7799 (Not 
otherwise classified drugs, other than inhalation drugs, administered 
through DME) and J7999 (Compounded drug, not otherwise classified), are 
also included in the definition of a `transitional home infusion drug.'
b. Infusion Drug Administration Calendar Day
    Section 1834(u)(7)(E)(i) of the Act states that payment to an 
eligible home infusion supplier or qualified home infusion therapy 
supplier for an infusion drug administration calendar day in the 
individual's home refers to payment only for the date on which 
professional services, as described in section 1861(iii)(2) of the Act, 
were furnished to administer such drugs to such individual. This 
includes all such drugs administered to such individual on such day. We 
believe this to mean that payment is only for the day on which the 
nurse is in the patient's home when an infusion drug is being 
administered. As section 1861(iii)(2)(A) of the Act refers to the 
professional services, including nursing services, we believe this to 
mean skilled services as set out at 42 CFR 409.32. For the professional 
services to be necessary for the safe and effective administration of 
home infusion drugs, they must be furnished by skilled professionals in 
accordance with individual state practice acts. We understand that 
there may be professional services furnished that do not occur on a day 
the drug is being administered. However, payment for such home infusion 
therapy services is built into the single payment for the day on which 
the nurse is in the patient's home and the drug is being infused. 
Accordingly, under section 1834(u)(7)(D) of the Act, the temporary 
transitional payment is set equal to 4 hours of infusion in a 
physician's office even though the nurse may be in the patient's home 
for a much shorter timeframe. In other words, payment is made only for 
the day on which the administration of the infusion drug occurs even if 
professional services were furnished on a different day. Therefore, we 
propose to define in regulation that payment for an infusion drug 
administration calendar day is for the day on which home infusion 
therapy services are furnished by skilled professional(s) in the 
individual's home on the day of infusion drug administration. The 
skilled services provided on such day must be so inherently complex 
that they can only be safely and effectively performed by, or under the 
supervision of, professional or technical personnel. An infusion drug 
administration visit that begins in one calendar day and spans into the 
next calendar day would be considered one visit using the date the 
visit ended as the service date. We are soliciting comment on the 
proposed definition of infusion drug administration calendar day in 
regulation, as detailed in section IX of this proposed rule.
c. Eligible Home Infusion Suppliers, Eligible Individuals, and 
Relationship to Home Health
    Section 1842(u)(7)(F) of the Act defines eligible home infusion 
suppliers as suppliers that are enrolled in Medicare as pharmacies that 
provide external infusion pumps and external infusion pump supplies, 
and that maintain all pharmacy licensure requirements in the State in 
which the applicable infusion drugs are administered. This means that 
existing DME suppliers that are enrolled as pharmacies that provide 
external infusion pumps and supplies are considered eligible home 
infusion suppliers, as are potential pharmacy suppliers that enroll and 
comply with the Medicare program's supplier standards (found at 42 CFR 
424.57(c)) and quality standards to become accredited for furnishing 
external infusion pumps and supplies.\97\ Home infusion therapy 
services are furnished by eligible home infusion suppliers in the 
individual's home to an individual who is under the care of an 
applicable provider and where there is a plan of care established and 
periodically reviewed by a physician prescribing the type, amount, and 
duration of infusion therapy services. In section VI.C.2.f below, 
regarding the home infusion therapy benefit for CY 2021 and subsequent 
years, we are soliciting comments regarding the interaction between 
home infusion therapy services and home health services. However, for 
purposes of this proposed temporary transitional payment for home 
infusion therapy services for CYs 2019 and 2020, we anticipate the 
relationship between home infusion therapy and home health to be as 
described in section VI.C.2.f of this proposed rule.
---------------------------------------------------------------------------

    \97\ https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/DMEPOSQuality/DMEPOSQualBooklet-905709.html.
---------------------------------------------------------------------------

d. Payment Categories
    As outlined in section 1834(u)(7)(C) of the Act, identified HCPCS 
codes for transitional home infusion drugs are assigned to three 
payment categories for which a single payment amount will be 
established for home infusion therapy services furnished on each 
infusion drug administration calendar day. Payment category 1 includes 
antifungals and antivirals, uninterrupted long-term infusions, pain 
management, inotropic, and chelation drugs. Payment category 2 includes 
subcutaneous immunotherapy infusions. Payment category 3 includes 
certain chemotherapy drugs. Table 55 provides the complete list of J-
codes associated with the infusion drugs that

[[Page 32465]]

fall within each of the payment categories.

 Table 55--Infusion Drug J-Codes Associated With Temporary Transitional
          Payment Categories for Home Infusion Therapy Services
------------------------------------------------------------------------
           J-Code                                Drug
------------------------------------------------------------------------
Category 1:
    J0133...................  Injection, acyclovir, 5 mg.
    J0285...................  Injection, amphotericin b, 50 mg.
    J0287...................  Injection, amphotericin b lipid complex,
                               10 mg.
    J0288...................  Injection, amphotericin b cholesteryl
                               sulfate complex, 10 mg.
    J0289...................  Injection, amphotericin b liposome, 10 mg.
    J0895...................  Injection, deferoxamine mesylate, 500 mg.
    J1170...................  Injection, hydromorphone, up to 4 mg.
    J1250...................  Injection, dobutamine hydrochloride, per
                               250 mg.
    J1265...................  Injection, dopamine hcl, 40 mg.
    J1325...................  Injection, epoprostenol, 0.5 mg.
    J1455...................  Injection, foscarnet sodium, per 1,000 mg.
    J1457...................  Injection, gallium nitrate, 1 mg.
    J1570...................  Injection, ganciclovir sodium, 500 mg.
    J2175...................  Injection, meperidine hydrochloride, per
                               100 mg.
    J2260...................  Injection, milrinone lactate, 5 mg.
    J2270...................  Injection, morphine sulfate, up to 10 mg.
    J2274...................  Injection, morphine sulfate, preservative-
                               free for epidural or intrathecal use, 10
                               mg.
    J2278...................  Injection, ziconotide, 1 microgram.
    J3010...................  Injection, fentanyl citrate, 0.1 mg.
    J3285...................  Injection, treprostinil, 1 mg.
Category 2:
    J1555 JB \98\...........  Injection, immune globulin (cuvitru), 100
                               mg.
    J1559 JB................  Injection, immune globulin (hizentra), 100
                               mg.
    J1561 JB................  Injection, immune globulin, (gamunex-c/
                               gammaked), non-lyophilized (e.g.,
                               liquid), 500 mg.
    J1562 JB................  Injection, immune globulin (vivaglobin),
                               100 mg.
    J1569 JB................  Injection, immune globulin, (gammagard
                               liquid), non-lyophilized, (e.g., liquid),
                               500 mg.
    J1575 JB................  Injection, immune globulin/hyaluronidase,
                               (hyqvia), 100 mg immune globulin.
Category 3:
    J9000...................  Injection, doxorubicin hydrochloride, 10
                               mg.
    J9039...................  Injection, blinatumomab, 1 microgram.
    J9040...................  Injection, bleomycin sulfate, 15 units.
    J9065...................  Injection, cladribine, per 1 mg.
    J9100...................  Injection, cytarabine, 100 mg.
    J9190...................  Injection, fluorouracil, 500 mg.
    J9200...................  Injection, floxuridine, 500 mg.
    J9360...................  Injection, vinblastine sulfate, 1 mg.
    J9370...................  Injection, vincristine sulfate, 1 mg.
------------------------------------------------------------------------

    The payment category for subsequent transitional home infusion drug 
additions to the LCDs and compounded infusion drugs not otherwise 
classified, as identified by HCPCS codes J7799 and J7999, will be 
determined by the Medicare administrative contractors.
---------------------------------------------------------------------------

    \98\ The JB modifier indicates that the route of administration 
is subcutaneous.
---------------------------------------------------------------------------

e. Payment Amounts
    As set out at new section 1834(u)(7)(D) of the Act, as added by 
section 50401 of the BBA of 2018 (Pub. L. 115-123), each payment 
category will be paid at amounts in accordance with the Physician Fee 
Schedule for each infusion drug administration calendar day in the 
individual's home for drugs assigned to such category without 
geographic adjustment. Table 56 provides the payment categories 
associated with the HCPCS codes.

Table 56--Payment Categories for Temporary Transitional Payment for Home
                        Infusion Therapy Services
------------------------------------------------------------------------
            HCPCS code                      Description           Units
------------------------------------------------------------------------
Category 1:
    96365.........................  Therapeutic, Prophylactic,         1
                                     and Diagnostic Injections
                                     and Infusions (Excludes
                                     Chemotherapy and Other
                                     Highly Complex Drug or
                                     Highly Complex Biologic
                                     Agent Administration)--up
                                     to one hour.
    96366.........................  Therapeutic, Prophylactic,         3
                                     and Diagnostic Injections
                                     and Infusions (Excludes
                                     Chemotherapy and Other
                                     Highly Complex Drug or
                                     Highly Complex Biologic
                                     Agent Administration)--
                                     each additional hour.
Category 2:
    96369.........................  Therapeutic, Prophylactic,         1
                                     and Diagnostic Injections
                                     and Infusions (Excludes
                                     Chemotherapy and Other
                                     Highly Complex Drug or
                                     Highly Complex Biologic
                                     Agent Administration)--up
                                     to one hour.
    96370.........................  Therapeutic, Prophylactic,         3
                                     and Diagnostic Injections
                                     and Infusions (Excludes
                                     Chemotherapy and Other
                                     Highly Complex Drug or
                                     Highly Complex Biologic
                                     Agent Administration)--
                                     each additional hour.
Category 3:

[[Page 32466]]

 
    96413.........................  Injection and Intravenous          1
                                     Infusion Chemotherapy and
                                     Other Highly Complex Drug
                                     or Highly Complex Biologic
                                     Agent Administration--up
                                     to one hour.
    96415.........................  Injection and Intravenous          3
                                     Infusion Chemotherapy and
                                     Other Highly Complex Drug
                                     or Highly Complex Biologic
                                     Agent Administration--each
                                     additional hour.
------------------------------------------------------------------------

    Section 1834(u)(7)(E)(ii) of the Act requires that in the case that 
two (or more) home infusion drugs or biologicals from two different 
payment categories are administered to an individual concurrently on a 
single infusion drug administration calendar day, one payment for the 
highest payment category would be made.
f. Billing
    For eligible home infusion suppliers to bill for home infusion 
therapy services for an infusion drug administration calendar day, we 
will create three new HCPCS G-codes for each of the three payment 
categories. The eligible home infusion supplier would submit, in line-
item detail on the claim, a G-code for every visit made by the nurse to 
provide professional services to the patient in his/her home on a day 
in which a drug is being infused. Each visit reported would include the 
length of time in which professional services were provided (in 15 
minute increments). However, only one payment would be made per 
infusion drug administration calendar day at the standard amount 
described by each of the payment categories noted previously, for a 
total payment equivalent to 4 hours per infusion drug administration 
calendar day. These G-codes could be billed separately from or on the 
same claim as the DME, supplies, and infusion drug; and would be 
processed through the DME MACs. The supplier furnishing the DME, pump, 
the infusion drug, and other supplies must also provide the 
professional services under the home infusion therapy benefit during 
the temporary transitional payment period.
    For the purposes of this temporary transitional payment for home 
infusion therapy services, section 1834(u)(7)(D)(i) requires that 
payment amounts would be equal to the amounts determined under the 
Physician Fee Schedule established under section 1848 of the Act for 
services furnished during the year for codes and units for such codes 
specified without application of geographic wage adjustment under 
section 1848(e) of the Act. In the event that multiple drugs, which are 
not all assigned to the same payment category, are administered on the 
same infusion drug administration calendar day, section 
1834(u)(7)(E)(ii) requires that a single payment would be made that is 
equal to the highest payment category. In order to implement the 
requirements of section 1834(u)(7) of the Act for this temporary 
transitional payment, we would issue a Change Request (CR) prior to 
implementation of this temporary transitional payment, including the G-
codes needed for billing, outlining the requirements for the claims 
processing changes needed to implement this payment.
2. Solicitation of Public Comments Regarding Payment for Home Infusion 
Therapy Services for CY 2021 and Subsequent Years
    Upon the expiration of the home infusion therapy services temporary 
transitional payment, we would be fully implementing the home infusion 
therapy services payment system under section 1834(u)(1) of the Act, as 
added by section 5012 of the 21st Century Cures Act (Pub. L. 114-255). 
In anticipation of future rulemaking, we are soliciting comments 
regarding the payment system for home infusion therapy services 
beginning in CY 2021.
a. Relationship to DME
    As mentioned previously, Medicare Part B covers certain infusion 
pumps and supplies (including certain home infusion drugs) that are 
necessary for the effective use of the infusion pump, through the DME 
benefit. To be covered under the Part B DME benefit, the drug must be 
reasonable and necessary for the treatment of illness or injury or to 
improve the function of a malformed body member, and the drug must be 
necessary for the effective use of the DME. However, there is no 
separate Medicare Part B DME payment for professional services 
associated with the administration of home infusion drugs, including 
nursing services, or for training and education, monitoring, and remote 
monitoring services. Therefore, we consider the home infusion therapy 
benefit principally to be a separate payment in addition to the 
existing payment made under the DME benefit, thus explicitly and 
separately paying for the home infusion therapy services.
b. Definition of Infusion Drug Administration Calendar Day
    Section 1834(u)(7)(E)(i) of the Act applies the same definition of 
``infusion drug administration calendar day'' for both the home 
infusion therapy temporary transitional payment and the home infusion 
therapy services benefit. We anticipate retaining the definition of 
infusion drug administration calendar day, as proposed in section 
IV.C.2. of this proposed rule for the full implementation of the home 
infusion therapy services benefit. This means that payment for an 
infusion drug administration calendar day is for the day on which home 
infusion therapy services are furnished by skilled professionals in the 
individual's home on the day of infusion drug administration. An 
infusion drug administration visit that begins in one calendar day and 
spans into the next calendar day would be considered one visit using 
the date the visit ended as the service date. The skilled services 
provided on such day must be so inherently complex that they can only 
be safely and effectively performed by, or under the supervision of, 
professional or technical personnel. We are soliciting comments on the 
definition as discussed in section IV.C.2. of this proposed rule.
c. Payment Basis, Limitation on Payment, Required and Discretionary 
Adjustments, and Billing Procedures
    Section 1834(u)(1)(A) of the Act requires the establishment of a 
unit of single payment for each infusion drug administration calendar 
day. Section 1834(u)(1)(A)(iii) of the Act limits the unit of single 
payment by requiring that it must not exceed the amount determined 
under the fee schedule under section 1848 of the Act for infusion 
therapy services furnished in a calendar day if furnished in a 
physician's office, and the single payment must not reflect more than 
five hours for a particular therapy in a calendar day. Additionally, 
section 1834(u)(1) of the Act includes provisions for payment 
adjustments to

[[Page 32467]]

the unit of single payment for home infusion therapy. Section 
1834(u)(1)(B) of the Act requires adjustments to reflect factors such 
as patient acuity and complexity of drug administration, and a 
geographic wage index and other costs that may vary by region. While 
the three payment categories used for the temporary transitional 
payment in CYs 2019 and 2020 reflect the therapy type and complexity of 
the drug administration under the Physician Fee Schedule, we are 
soliciting comments on other ways to account for therapy type and 
complexity of administration, as well as ways to capture patient 
acuity.
    Section 1834(u)(1)(B)(i) of the Act requires that the single 
payment amount be adjusted by a geographic wage index; therefore, we 
are considering using the Geographic Practice Cost Indices (GPCIs) to 
account for regional variations in wages and adjust the payment for the 
professional services. A GPCI has been established for every Medicare 
payment locality for each of the three components of a procedure's 
relative value unit (RVU) (for example, the RVUs for work, practice 
expense, and malpractice). The GPCIs are applied in the calculation of 
a fee schedule payment amount by multiplying the RVU for each component 
times the GPCI for that component.\99\ Finally, section 1834(u)(1)(C) 
of the Act allows for discretionary adjustments which may include 
outlier situations and other factors as deemed appropriate by the 
Secretary, and are required to be made in a budget neutral manner. We 
request feedback on situations that may incur an outlier payment and 
potential designs for an outlier payment calculation.
---------------------------------------------------------------------------

    \99\ https://www.cms.gov/apps/physician-fee-schedule/documentation.aspx.
---------------------------------------------------------------------------

    For CY 2021 and subsequent years, although not required by law, the 
Part B qualified home infusion therapy supplier could potentially 
submit a claim for home infusion therapy services on a Part B 
practitioner claim and processed through the A/B MACs, rather than the 
DME MACs. We are soliciting comment on whether submitting a Part B 
practitioner claim processed through the A/B MACs is reasonable given 
that other types of suppliers and providers of services (such as 
physicians and HHAs), and not just DME suppliers, can meet the 
requirements under section 1861(iii) of the Act, such as accreditation, 
to provide home infusion therapy services. In addition, when Part B 
practitioner claims are processed through the A/B MACs a mechanism is 
already in place for the geographic wage adjustment, as required for 
the home infusion therapy payment system, and we are considering the 
use of GPCI as described previously. In order to bill for the home 
infusion therapy services, beginning on January 1, 2021, a qualified 
home infusion therapy supplier will need to enroll in Medicare as a 
Part B Home Infusion Therapy supplier. Additionally, in order to 
furnish DME equipment and supplies, that same qualified home infusion 
therapy supplier must also be enrolled as a DME supplier since the home 
infusion therapy services are required to be for the furnishing of DME 
infusion drugs through a DME infusion pump. In other words, both 
enrollments would be necessary for the same supplier to bill for home 
infusion therapy services and the DME equipment and supplies. 
Therefore, in order to be paid for all elements of home infusion 
therapy, two claims would need to be submitted: (1) The first claim for 
the DME drug, equipment, and supplies on the 837P/CMS-1500 professional 
and supplier claims form submitted to the DME MAC; and (2) a second 
claim for the professional services on the 837P/CMS-1500 professional 
and supplier claims form submitted to the A/B MAC.
    We invite comments on the unit of single payment, limitations on 
payment, and required and discretionary adjustments. We are also 
soliciting comments on whether it is reasonable to require two separate 
claims submissions to account for all components of home infusion 
therapy using the 837P/CMS-1500 professional and supplier claims form, 
and submitting claims to both the DME MACs and the A/B MACs for 
processing. Finally, we are soliciting any additional suggestions as to 
how qualified home infusion therapy suppliers should bill and be paid 
for services under the home infusion therapy benefit.
d. Definition of Professional/Nursing Services and Monitoring Related 
to the Administration of Home Infusion Drugs
    In accordance with section 1861(iii)(2) of the Act, items and 
services covered under the home infusion therapy benefit are as 
follows:
    <bullet> Professional services, including nursing services, 
furnished in accordance with the plan.
    <bullet> Training and education (not otherwise paid for as DME),
    <bullet> Remote monitoring, and monitoring services for the 
provision of home infusion drugs furnished by a qualified home infusion 
therapy supplier.
    Section 1861(n) of the Act defines DME as equipment used in the 
patient's home. Furthermore, the regulations at 42 CFR 424.57(c)(12) 
state that the DME supplier ``must document that it or another 
qualified party has at an appropriate time, provided beneficiaries with 
necessary information and instructions on how to use Medicare-covered 
items safely and effectively.'' As the medications in the DME external 
infusion pump LCDs are considered supplies to the external infusion 
pump, and have been identified as drugs and biologicals that can be 
self-infused in the home, ongoing nursing supervision is not required 
once the patient and/or caregiver has been sufficiently taught to 
safely manage the pump. We recognize that the DME supplier standards 
require a DME supplier to document that it or another qualified party 
has at an appropriate time provided beneficiaries with necessary 
information and instructions on how to use Medicare-covered items 
safely and effectively (42 CFR 424.57(c)(12)). Therefore, the in-home 
nursing services under the home infusion therapy benefit would include 
a limited amount of teaching and training on the provision of home 
infusion drugs that is not already covered under the DME benefit in 
accordance.
    In determining the reasonable and necessary number of infusion 
therapy visits, the home infusion therapy supplier must consider 
whether the training and education provided constitutes reinforcement 
of teaching provided previously in an institutional setting or in the 
home, or whether it represents initial instruction. Where the teaching 
represents initial instruction, the supplier should consider patient 
acuity, including the unique abilities of the patient, and complexity 
of the infusion. Where the teaching constitutes reinforcement, the 
supplier should evaluate the patient's retained knowledge and 
anticipated learning progress to determine the appropriate number of 
visits. Re-teaching or retraining for an appropriate period may be 
considered reasonable and necessary where there is a change in the 
infusion protocol or the patient's condition that requires re-teaching, 
or where the patient, family, or caregiver is not properly carrying out 
the task. The medical record should document the anticipated number of 
training and education visits required, patient/caregiver response to 
training, and if necessary, the reason that the re-teaching or 
retraining is required. Where it becomes apparent after a reasonable 
period of time that the patient/caregiver is not able to be trained, or 
if the patient/caregiver has been taught to safely and effectively use 
the infusion

[[Page 32468]]

pump in the home, then further teaching and training would cease to be 
reasonable and necessary. In accordance with section 1861(iii)(1)(B), 
an individual must be under a plan of care established by a physician, 
prescribing the type, amount, and duration of infusion therapy services 
that are to be furnished in coordination with the furnishing of home 
infusion drugs under Part B. These home infusion drugs, defined under 
section 1861(iii)(3)(C) of the Act, must be administered intravenously, 
or subcutaneously for an administration period of 15 minutes or more 
through a pump that is an item of DME in order for home infusion 
therapy services to be reasonable and necessary for the treatment of 
the illness or injury. In order to satisfy the definition of DME, an 
item must be appropriate for use in the home. In this case, in order to 
be considered appropriate for use in the home, the patient must be able 
to safely and effectively operate the infusion pump. Therefore, if a 
patient is unable to safely and effectively operate the infusion pump 
in the home, then the patient would not be eligible for the home 
infusion therapy benefit.
    It is important to reiterate that the professional services covered 
under this benefit are not intended to provide on-going nursing 
supervision throughout each infusion. If applicable, the reason why a 
training was unsuccessful should be documented in the record. We invite 
comments regarding what constitutes a reasonable and necessary amount 
of training and education for the provision of home infusion drugs. We 
outline in this section additional, more detailed information on the 
professional and nursing services that would be covered, as well as 
remote monitoring services for the provision of home infusion drugs, as 
defined in 1861(iii)(3)(C) of the Act, relative to the therapy types 
currently included in the DME external infusion pump LCD.\100\
---------------------------------------------------------------------------

    \100\ https://med.noridianmedicare.com/documents/2230703/7218263/External+Infusion+Pumps+LCD.
---------------------------------------------------------------------------

(1) Central Vascular Access Device Maintenance
    As many of the drugs and biologicals included in the DME external 
infusion pump LCD are given continuously, given on a long-term basis, 
or are vesicants or irritants that should not be given peripherally, 
many beneficiaries would likely have central vascular access devices 
(CVAD), such as peripherally inserted central catheters (PICC), central 
lines, or ports requiring training and education regarding maintenance 
and hygiene, and site care and dressing changes. The qualified home 
infusion therapy supplier would be responsible for educating the 
patient on properly disinfecting access points and connectors, what to 
do in the event of a dislodgement or occlusion, and signs/symptoms of 
infection. This also includes teaching the patient about flushing the 
CVAD after the infusion to ensure all of the medication has been 
flushed through the tubing and catheter, and locking the catheter to 
prevent blood from backing into the catheter and clotting. Education 
regarding specific techniques and solutions (saline or heparin) may be 
given to minimize catheter occlusion.\101\
---------------------------------------------------------------------------

    \101\ Gabriel J (2013) Venous access devices part 2: preventing 
and managing complications of CVADs. Nursing Times; 109: 40, 20-23.
---------------------------------------------------------------------------

(2) Medication Education and Disease Management
    The qualified home infusion therapy supplier would be responsible 
for ensuring that the patient has been properly educated about his/her 
disease, medication therapy, and lifestyle changes. This could include 
self-monitoring instruction (for example, nutrition, temperature, blood 
pressure, heart rate, daily weight, abdominal girth measurement, edema, 
urine output) and identification of complications or problems 
necessitating a call to the infusion nurse/pharmacist, or emergency 
protocols if they arise. The qualified home infusion therapy supplier 
would ensure proper understanding of the medication therapy including: 
Drug; route of administration; prescription (dosage, how often to 
administer, and duration of therapy); side effects and interactions 
with other medications; adverse reactions to therapy; goals of therapy; 
and indications of progress. Lifestyle education regarding behavior and 
food/fluid modifications/restrictions, symptom management, and 
infection control are also important aspects of this education. As some 
drugs covered under the DME benefit involve extensive lifestyle changes 
and dietary restrictions, training and education as included in the 
home infusion therapy benefit could entail any ancillary services such 
as visits with social workers or dieticians as needed, and documented 
in the medical record. For patients on continuous, potentially life 
long IV therapy, the nurse, social worker, or dietician would assess 
the need for further training and education regarding the concept of 
long-term drug infusion and address aspects of life-style changes and 
realistic expectations for life with an infusion pump.
(3) Patient Evaluation and Assessment
    Comprehensive patient assessment is imperative when providing home 
infusion therapy in order to ensure the accuracy of the medication 
administration and safety of the patient, and to determine whether 
changes in the home infusion therapy plan of care are necessary. The 
qualified home infusion therapy supplier would evaluate patient 
history, current physical and mental status, including patient response 
to therapy, any adverse effects or infusion complications, lab reports, 
cognitive and psychosocial status, family/care partner support, 
prescribed treatment, concurrent oral prescriptions, and over-the-
counter medications. This includes obtaining any necessary blood-work 
and vital signs.
(4) Medication Administration
    As the DME supplier is responsible, under the DME benefit,\102\ for 
training the patient and caregiver on pump operation, maintenance, and 
troubleshooting; the qualified home infusion therapy supplier would be 
responsible for all other aspects of medication administration, 
including inspection of medications, containers, supplies prior to use; 
proper drug storage and disposal; household precautions for 
chemotherapy drugs including spills, handling body wastes, and physical 
contact precautions; hand hygiene and aseptic technique; pre/post 
medication/hydration administration; and medication preparation.
---------------------------------------------------------------------------

    \102\ https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/downloads/DMEPOSAccreditationStandardsCMB.pdf.
---------------------------------------------------------------------------

(5) Remote Monitoring and Monitoring Services
    Section 1861(iii)(3)(D)(i)(II) of the Act requires that the 
qualified home infusion therapy supplier ``ensures the safe and 
effective provision and administration of home infusion therapy on a 7-
day-a-week, 24-hour-a-day basis.'' Therefore, the qualified home 
infusion therapy supplier would closely monitor lab values, patient 
response to therapy, and assess compliance. Direct communication and 
coordination with the patient, caregivers, applicable providers, and 
pharmacist regarding changes in the patient's condition should be on-
going so that any adjustment to treatment is made as needed and in a 
timely fashion.
    Monitoring services, as indicated on the plan of care, would 
dictate either the

[[Page 32469]]

need for daily monitoring of indicated vitals (through remote 
monitoring) or specify the interval for in-person evaluation and 
assessment of the patient. The use of remote monitoring services for 
those patients receiving home infusion therapy would likely be limited 
to patients receiving continuous infusion medications as identified in 
the plan of care. These patients are considered high risk patients and 
require daily monitoring, but generally do not need to be seen by a 
practitioner daily. This can be achieved, for example, through the use 
of a remote monitoring service that includes monitoring equipment 
through which the patient electronically submits self-obtained vital 
signs, such as weight, blood pressure, and heart rate. In this example, 
an off-site monitoring service would communicate any abnormal results 
to the home infusion therapy supplier for analysis and consultation 
with the provider overseeing the patient's care (that is, physician, 
nurse practitioner, or physician assistant) regarding potential 
treatment plan changes.
    We invite comments on any additional interpretations of 
professional, nursing, training and education, and monitoring services 
that may be considered under the scope of the home infusion therapy 
benefit. We also specifically welcome comments on the use of remote 
monitoring under the home infusion therapy benefit.
e. The Role of Prior Authorization Under the Home Infusion Therapy 
Benefit
    Section 1834(u)(4) of the Act states that the Secretary may apply 
prior authorization for home infusion services. Generally, prior 
authorization requires that a decision by a health insurer or plan be 
rendered to confirm that a health care service, treatment plan, 
prescription drug or durable medical equipment is medically 
necessary.\103\ Prior authorization helps to ensure that a service, 
such as home infusion therapy, is being provided appropriately. Private 
health plans generally require prior authorization before home infusion 
therapy can begin. We would maintain the discretion to decide if 
certain drugs or frequency in visits require prior authorization before 
therapy can be covered. The emphasis would be on the appropriateness of 
the drug and the necessity of associated professional services and not 
the site of care. We are soliciting comments as to whether and how 
prior authorization could potentially be utilized for home infusion 
therapy.
---------------------------------------------------------------------------

    \103\ https://www.healthcare.gov/glossary/preauthorization/.
---------------------------------------------------------------------------

f. Home Infusion Therapy and the Relationship to/Interaction With Home 
Health
    A beneficiary does not have to be considered confined to the home 
(that is, homebound) in order to be eligible for the home infusion 
therapy benefit. However, homebound beneficiaries requiring home health 
services also may be eligible for the home infusion therapy benefit. 
Therefore, there may be circumstances when a patient may utilize both 
the home health benefit and the home infusion therapy benefit 
concurrently.
    HHAs are required to furnish necessary DME and coordinate home 
infusion services when a patient is under a home health plan of care. 
In accordance with the Home Health Conditions of Participation at 42 
CFR 484.60, the HHA must assure communication with all physicians 
involved in the plan of care, as well as integrate orders and services 
provided by all physicians and disciplines. In order to qualify for the 
Medicare home health benefit, the beneficiary must--
    <bullet> Be confined to the home;
    <bullet> Be under the care of a physician;
    <bullet> Receive services under a plan of care established and 
periodically reviewed by a physician;
    <bullet> Be in need of skilled nursing care on an intermittent 
basis or physical therapy or speech-language pathology, or have a 
continuing need for occupational therapy; and
    <bullet> Have had a face-to-face encounter related to the primary 
reason for home health care with an allowed provider type and within 
the required timeframe.
    If a patient meets the requirements listed previously and a home 
health visit is furnished that is unrelated to home infusion therapy, 
then payment for the home health visit would be covered by the HH PPS 
payment and billed on the home health claim. When the HHA providing 
services under the Medicare home health benefit is also the same entity 
furnishing services as the qualified home infusion therapy supplier, 
and a home visit is exclusively for the purpose of furnishing items and 
services related to home infusion therapy, the HHA would submit a claim 
for payment as a home infusion therapy supplier and receive payment 
under the home infusion therapy benefit. If the home visit includes the 
provision of other home health services in addition to, and separate 
from, items and services related to the home infusion therapy, the HHA 
would submit both a home health claim and a home infusion therapy 
claim, but must separate the time spent performing services covered 
under the HH PPS from the time spent performing services covered under 
the home infusion therapy benefit. We anticipate this would be similar 
to the approach for furnishing negative pressure wound therapy using a 
disposable device as described in the regulations at 42 CFR 484.205(b).
    We are soliciting feedback on the relationship between the Medicare 
home health benefit and the home infusion therapy benefit, including 
how payment would be made for a beneficiary who meets eligibility 
requirements for home health services and home infusion therapy 
services.

VII. Changes to the Accreditation Requirements for Certain Medicare-
Certified Providers and Suppliers

A. Background

    To participate in the Medicare program, Medicare-certified 
providers and suppliers of health care services, must be substantially 
in compliance with specified statutory requirements of the Act, as well 
as any additional regulatory requirements related to the health and 
safety of patients specified by the Secretary of the Department of 
Health and Human Services (HHS). Medicare certified providers and 
suppliers are enrolled in the Medicare program by entering into an 
agreement with Medicare. They include hospitals, skilled nursing 
facilities, home health agencies, hospice programs, rural health 
clinics, critical access hospitals, comprehensive outpatient 
rehabilitation facilities, laboratories, clinics, rehabilitation 
agencies, public health agencies, and ambulatory surgical centers. 
These health and safety requirements are generally called conditions of 
participation (CoPs) for most providers, requirements for skilled 
nursing facilities (SNFs), conditions for coverage (CfCs) for 
ambulatory surgical centers (ASCs) and other suppliers, and conditions 
for certification for rural health clinics (RHCs). A Medicare-certified 
provider or supplier that does not substantially comply with the 
applicable health and safety requirements risks having its 
participation in the Medicare program terminated.
    In accordance with section 1864 of the Act, state health 
departments or similar agencies, under an agreement with CMS, survey 
health care providers and suppliers to ascertain compliance with the 
applicable CoPs, CfCs, conditions of certification, or requirements, 
and certify their findings to us. Based on these State Survey

[[Page 32470]]

Agency (SA) certifications, we determine whether the provider or 
supplier qualifies, or continues to qualify, for participation in the 
Medicare program.
    Section 1865(a) of the Act allows most health care facilities to 
demonstrate compliance with Medicare CoPs, requirements, CfCs, or 
conditions for certification through accreditation by a CMS-approved 
program of a national accreditation body. If an AO is recognized by the 
Secretary as having standards for accreditation that meet or exceed 
Medicare requirements, any provider or supplier accredited by the AO's 
CMS-approved accreditation program may be deemed by us to meet the 
Medicare conditions or requirements.
    We are responsible for the review, approval and subsequent 
oversight of national AOs' Medicare accreditation programs, and for 
ensuring providers or suppliers accredited by the AO meet the quality 
and patient safety standards required by the Medicare CoPs, 
requirements, CfCs, and conditions for certification. Any national AO 
seeking approval of an accreditation program in accordance with section 
1865(a) of the Act must apply for and be approved by CMS for a period 
not to exceed six years.
    The AO must reapply for renewed CMS approval of an accreditation 
program before the date its approval period expires. This allows 
providers or suppliers accredited under the program to continue to be 
deemed to be in compliance with the applicable Medicare CoPs, 
requirements, CfCs, and conditions for certification. Regulations 
implementing these provisions are found at 42 CFR 488.1 through 488.9.
    We believe that it is necessary to revise the regulations for 
Medicare-certified providers and providers to add two new requirements 
for the AOs that accredit certified providers and providers. First, we 
are proposing at Sec.  488.5 to require AOs for Medicare-certified 
providers and suppliers to include a written statement in their 
application which states that if a fully accredited and deemed facility 
in good standing provides written notification that they wish to 
voluntarily withdraw from the AO's CMS-approved accreditation program, 
the AO must continue the facility's current accreditation until the 
effective date of withdrawal identified by the facility or the 
expiration date of the term of accreditation, whichever comes first. We 
are also proposing to modify the AO oversight regulations at Sec.  
488.5 by adding new requirements for training for AO surveyors.

B. Proposed Changes to Certain Requirements for Medicare-Certified 
Providers and Suppliers at Part 488

1. Continuation of Term of Accreditation When a Medicare-Certified 
Provider or Supplier Decides to Voluntarily Terminate the Services of 
an Accrediting Organization (Sec.  488.5)
    We propose to add a new regulation at Sec.  488.5(a)(17)(iii), 
which would require that, with an initial or renewal application for 
CMS-approval of a Medicare certified provider or supplier accreditation 
program, an AO must include a written statement agreeing that when a 
fully accredited, deemed provider or supplier in good standing notifies 
its AO that it wishes to voluntarily withdraw from the AO's 
accreditation program, the AO would honor the provider's or supplier's 
current term of accreditation until the effective date of withdrawal 
identified by the facility, or the expiration date of the term of 
accreditation, whichever comes first. We make this proposal because we 
have received numerous complaints from accredited and deemed facilities 
in good standing with their current AO stating that once they provide 
notification to the AO of their intent to voluntary withdrawal their 
accreditation from that AO, the AO frequently terminates their 
accreditation immediately without regard to their current accreditation 
status, up to date payment of fees, contract status, or the facility's 
requested effective date of withdrawal. Accreditation is voluntary for 
Medicare certified providers and suppliers that participate in 
Medicare. It is not required for participation in Medicare. Therefore, 
we do not believe it is reasonable for AOs to penalize facilities 
because they choose to terminate the services of an AO. Medicare 
certified providers and suppliers may freely choose to demonstrate 
compliance with the Medicare conditions.by receiving surveys from any 
CMS-approved AO of their choice, or the SA.
2. Training Requirements for Accrediting Organization Surveyors (Sec.  
488.5(a)(7))
    We are proposing to add a new requirement at Sec.  488.5(a)(7) 
which imposes a new training requirement for surveyors of AO that 
accredit Medicare certified provider and supplier types by amending the 
provision at Sec.  488.5(a)(7). We are proposing that all AO surveyors 
be required to complete the relevant program-specific CMS online 
trainings initially, and thereafter, consistent with requirements 
established by CMS for state surveyors. CMS provides a wide variety of 
comprehensive trainings through an on-demand integrated surveyor 
training website. These online trainings are available and can be 
accessed by state and federal surveyors and the public, free of charge, 
24 hours a day, 365 days a year. These online trainings are currently 
publically available for the SA surveyors.
    As part of our oversight of the AOs performance, CMS has contracted 
with the SAs to perform validation surveys on a sample of providers and 
suppliers (such as hospitals, critical access hospital, ambulatory 
surgical centers, and home health agencies) accredited by the AOs that 
accredit Medicare certified providers and suppliers. Validation surveys 
must be performed by the SA within 60 days of the survey performed by 
the AO. As a validation survey is performed within 60 days of the AO 
survey, we believe that the conditions at the hospital or other 
facility being surveyed would be similar at the time of the validation 
survey.
    The purpose of a validation survey is to compare the survey 
findings of the AO to the survey findings of the SA to see if there are 
any disparities. The amount of disparities found in the AO's survey is 
called the ``disparity rate'' and is tracked by CMS as an indication of 
the quality of the surveys performed by the AO.
    CMS has determined that many of the AOs' disparity rates have been 
consistently high. This means that the AOs have consistently failed to 
find the same condition level deficiencies in the care provided by the 
hospital or other providers surveyed that were found by the SA during 
the validation survey.
    We believe that the disparity in findings made by the AO surveyors 
and those of the SA surveyors can largely be attributed the difference 
in the training and education provided to the AO surveyors. Each AO is 
responsible for providing training and education to their surveyors. 
The surveyor training and education provided varies from AO to AO and 
is not consistent. CMS provides comprehensive online training to the SA 
surveyor staff on the CMS Surveyor Training website \104\ which are 
specific to each type of provider of supplier type to be surveyed.
---------------------------------------------------------------------------

    \104\ https://surveyortraining.cms.hhs.gov/.
---------------------------------------------------------------------------

    It is our belief that the AO's disparity rate would be decreased if 
all surveyors took the same training. We believe completion of the same 
surveyor training by both SA and AO surveyors would increase the 
consistency between the results of the surveys performed by the SAs and 
AOs and have a positive impact on the historically high disparity

[[Page 32471]]

rate. Therefore we are proposing that all AO surveyors be required to 
take the CMS online surveyor training offered on the CMS website. We 
would require each AO to provide CMS with documentation which provides 
proof that each of their surveyors has completed the CMS online 
surveyor training. If the AO fails to provide this documentation, CMS 
could place the AO on an accreditation program review pursuant to Sec.  
488.8(c).

VIII. Requests for Information

    This section addresses two requests for information (RFI). Upon 
reviewing the RFIs, respondents are encouraged to provide complete but 
concise responses. These RFIs are issued solely for information and 
planning purposes; neither RFI constitutes a Request for Proposal 
(RFP), application, proposal abstract, or quotation. The RFIs do not 
commit the U.S. Government to contract for any supplies or services or 
make a grant award. Further, CMS is not seeking proposals through these 
RFIs and will not accept unsolicited proposals. Responders are advised 
that the U.S. Government will not pay for any information or 
administrative costs incurred in response to these RFIs; all costs 
associated with responding to these RFIs will be solely at the 
interested party's expense. Failing to respond to either RFI will not 
preclude participation in any future procurement, if conducted. It is 
the responsibility of the potential responders to monitor each RFI 
announcement for additional information pertaining to the request. 
Please note that CMS will not respond to questions about the policy 
issues raised in these RFIs. CMS may or may not choose to contact 
individual responders. Such communications would only serve to further 
clarify written responses. Contractor support personnel may be used to 
review RFI responses. Responses to these RFIs are not offers and cannot 
be accepted by the U.S. Government to form a binding contract or issue 
a grant. Information obtained as a result of these RFIs may be used by 
the U.S. Government for program planning on a non-attribution basis. 
Respondents should not include any information that might be considered 
proprietary or confidential. This RFI should not be construed as a 
commitment or authorization to incur cost for which reimbursement would 
be required or sought. All submissions become U.S. Government property 
and will not be returned. CMS may publically post the comments 
received, or a summary thereof.

A. Request for Information on Promoting Interoperability and Electronic 
Healthcare Information Exchange Through Possible Revisions to the CMS 
Patient Health and Safety Requirements for Hospitals and Other 
Medicare- and Medicaid-Participating Providers and Suppliers

    Currently, Medicare- and Medicaid-participating providers and 
suppliers are at varying stages of adoption of health information 
technology (health IT). Many hospitals have adopted electronic health 
records (EHRs), and CMS has provided incentive payments to eligible 
hospitals, critical access hospitals (CAHs), and eligible professionals 
who have demonstrated meaningful use of certified EHR technology 
(CEHRT) under the Medicare EHR Incentive Program. As of 2015, 96 
percent of Medicare- and Medicaid-participating non-Federal acute care 
hospitals had adopted certified EHRs with the capability to 
electronically export a summary of clinical care.\105\ While both 
adoption of EHRs and electronic exchange of information have grown 
substantially among hospitals, significant obstacles to exchanging 
electronic health information across the continuum of care persist. 
Routine electronic transfer of information post-discharge has not been 
achieved by providers and suppliers in many localities and regions 
throughout the Nation.
---------------------------------------------------------------------------

    \105\ These statistics can be accessed at:
    https://dashboard.healthit.gov/quickstats/pages/FIG-Hospital-EHR-Adoption.php.
---------------------------------------------------------------------------

    CMS is firmly committed to the use of certified health IT and 
interoperable EHR systems for electronic healthcare information 
exchange to effectively help hospitals and other Medicare- and 
Medicaid-participating providers and suppliers improve internal care 
delivery practices, support the exchange of important information 
across care team members during transitions of care, and enable 
reporting of electronically specified clinical quality measures 
(eCQMs). The Office of the National Coordinator for Health Information 
Technology (ONC) acts as the principal Federal entity charged with 
coordination of nationwide efforts to implement and use health 
information technology and the electronic exchange of health 
information on behalf of the Department of Health and Human Services.
    In 2015, ONC finalized the 2015 Edition health IT certification 
criteria (2015 Edition), the most recent criteria for health IT to be 
certified to under the ONC Health IT Certification Program. The 2015 
Edition facilitates greater interoperability for several clinical 
health information purposes and enables health information exchange 
through new and enhanced certification criteria, standards, and 
implementation specifications. CMS requires eligible hospitals and CAHs 
in the Medicare and Medicaid EHR Incentive Programs and eligible 
clinicians in the Quality Payment Program (QPP) to use EHR technology 
certified to the 2015 Edition beginning in CY 2019.
    In addition, several important initiatives will be implemented over 
the next several years to provide hospitals and other participating 
providers and suppliers with access to robust infrastructure that will 
enable routine electronic exchange of health information. Section 4003 
of the 21st Century Cures Act (Pub. L. 114-255), enacted in 2016, and 
amending section 3000 of the Public Health Service Act (42 U.S.C. 
300jj), requires HHS to take steps to advance the electronic exchange 
of health information and interoperability for participating providers 
and suppliers in various settings across the care continuum. 
Specifically, Congress directed that ONC ``. . . for the purpose of 
ensuring full network-to-network exchange of health information, 
convene public-private and public-public partnerships to build 
consensus and develop or support a trusted exchange framework, 
including a common agreement among health information networks 
nationally.'' In January 2018, ONC released a draft version of its 
proposal for the Trusted Exchange Framework and Common Agreement,\106\ 
which outlines principles and minimum terms and conditions for trusted 
exchange to enable interoperability across disparate health information 
networks (HINs). The Trusted Exchange Framework (TEF) is focused on 
achieving the following four important outcomes in the long-term:
---------------------------------------------------------------------------

    \106\ The draft version of the trusted Exchange Framework may be 
accessed at: https://beta.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement.
---------------------------------------------------------------------------

    <bullet> Professional care providers, who deliver care across the 
continuum, can access health information about their patients, 
regardless of where the patient received care.
    <bullet> Patients can find all of their health information from 
across the care continuum, even if they do not remember the name of the 
professional care provider they saw.
    <bullet> Professional care providers and health systems, as well as 
public and private health care organizations and public and private 
payer organizations

[[Page 32472]]

accountable for managing benefits and the health of populations, can 
receive necessary and appropriate information on groups of individuals 
without having to access one record at a time, allowing them to analyze 
population health trends, outcomes, and costs; identify at-risk 
populations; and track progress on quality improvement initiatives.
    <bullet> The health IT community has open and accessible 
application programming interfaces (APIs) to encourage entrepreneurial, 
user-focused innovation that will make health information more 
accessible and improve EHR usability.
    ONC will revise the draft TEF based on public comment and 
ultimately release a final version of the TEF that will subsequently be 
available for adoption by HINs and their participants seeking to 
participate in nationwide health information exchange. The goal for 
stakeholders that participate in, or serve as, a HIN is to ensure that 
participants will have the ability to seamlessly share and receive a 
core set of data from other network participants in accordance with a 
set of permitted purposes and applicable privacy and security 
requirements. Broad adoption of this framework and its associated 
exchange standards is intended to both achieve the outcomes described 
above while creating an environment more conducive to innovation.
    In light of the widespread adoption of EHRs along with the 
increasing availability of health information exchange infrastructure 
predominantly among hospitals, we are interested in hearing from 
stakeholders on how we could use the CMS health and safety standards 
that are required for providers and suppliers participating in the 
Medicare and Medicaid programs (that is, the Conditions of 
Participation (CoPs), Conditions for Coverage (CfCs), and Requirements 
for Participation (RfPs) for Long-Term Care (LTC) Facilities) to 
further advance electronic exchange of information that supports safe, 
effective transitions of care between hospitals and community 
providers. Specifically, CMS might consider revisions to the current 
CMS CoPs for hospitals, such as: Requiring that hospitals transferring 
medically necessary information to another facility upon a patient 
transfer or discharge do so electronically; requiring that hospitals 
electronically send required discharge information to a community 
provider via electronic means if possible and if a community provider 
can be identified; and requiring that hospitals make certain 
information available to patients or a specified third-party 
application (for example, required discharge instructions) via 
electronic means if requested.
    On November 3, 2015, we published a proposed rule (80 FR 68126) to 
implement the provisions of the Improving Medicare Post-Acute Care 
Transformation Act of 2014 (the IMPACT Act) (Pub. L. 113-185) and to 
revise the discharge planning CoP requirements that hospitals 
(including short-term acute care hospitals, long-term care hospitals 
(LTCHs), rehabilitation hospitals, psychiatric hospitals, children's 
hospitals, and cancer hospitals), critical access hospitals (CAHs), and 
home health agencies (HHAs) would need to meet in order to participate 
in the Medicare and Medicaid programs. This proposed rule has not been 
finalized yet. However, several of the proposed requirements directly 
address the issue of communication between providers and between 
providers and patients, as well as the issue of interoperability:
    <bullet> Hospitals and CAHs would be required to transfer certain 
necessary medical information and a copy of the discharge instructions 
and discharge summary to the patient's practitioner, if the 
practitioner is known and has been clearly identified;
    <bullet> Hospitals and CAHs would be required to send certain 
necessary medical information to the receiving facility/post-acute care 
providers, at the time of discharge; and
    <bullet> Hospitals, CAHs, and HHAs would need to comply with the 
IMPACT Act requirements that would require hospitals, CAHs, and certain 
post-acute care providers to use data on quality measures and data on 
resource use measures to assist patients during the discharge planning 
process, while taking into account the patient's goals of care and 
treatment preferences.
    We published another proposed rule (81 FR 39448) on June 16, 2016, 
that updated a number of CoP requirements that hospitals and CAHs would 
need to meet in order to participate in the Medicare and Medicaid 
programs. This proposed rule has not been finalized yet. One of the 
proposed hospital CoP revisions in that rule directly addresses the 
issues of communication between providers and patients, patient access 
to their medical records, and interoperability. We proposed that 
patients have the right to access their medical records, upon an oral 
or written request, in the form and format requested by such patients, 
if it is readily producible in such form and format (including in an 
electronic form or format when such medical records are maintained 
electronically); or, if not, in a readable hard copy form or such other 
form and format as agreed to by the facility and the individual, 
including current medical records, within a reasonable timeframe. The 
hospital must not frustrate the legitimate efforts of individuals to 
gain access to their own medical records and must actively seek to meet 
these requests as quickly as its recordkeeping system permits.
    We also published a final rule (81 FR 68688) on October 4, 2016, 
that revised the requirements that LTC facilities must meet to 
participate in the Medicare and Medicaid programs. In this rule, we 
made a number of revisions based on the importance of effective 
communication between providers during transitions of care, such as 
transfers and discharges of residents to other facilities or providers, 
or to home. Among these revisions was a requirement that the 
transferring LTC facility must provide all necessary information to the 
resident's receiving provider, whether it is an acute care hospital, an 
LTCH, a psychiatric facility, another LTC facility, a hospice, a home 
health agency, or another community-based provider or practitioner (42 
CFR 483.15(c)(2)(iii)). We specified that necessary information must 
include the following:
    <bullet> Contact information of the practitioner responsible for 
the care of the resident;
    <bullet> Resident representative information including contact 
information;
    <bullet> Advance directive information;
    <bullet> Special instructions or precautions for ongoing care;
    <bullet> The resident's comprehensive care plan goals; and
    <bullet> All other necessary information, including a copy of the 
resident's discharge or transfer summary and any other documentation to 
ensure a safe and effective transition of care.
    We note that the discharge summary mentioned above must include 
reconciliation of the resident's medications, as well as a 
recapitulation of the resident's stay, a final summary of the 
resident's status, and the post-discharge plan of care. In addition, in 
the preamble to the rule, we encouraged LTC facilities to 
electronically exchange this information if possible and to identify 
opportunities to streamline the collection and exchange of resident 
information by using information that the facility is already capturing 
electronically.
    Additionally, we specifically invite stakeholder feedback on the 
following questions regarding possible new or revised CoPs/CfCs/RfPs 
for interoperability and electronic exchange of health information:

[[Page 32473]]

    <bullet> If CMS were to propose a new CoP/CfC/RfP standard to 
require electronic exchange of medically necessary information, would 
this help to reduce information blocking as defined in section 4004 of 
the 21st Century Cures Act?
    <bullet> Should CMS propose new CoPs/CfCs/RfPs for hospitals and 
other participating providers and suppliers to ensure a patient's or 
resident's (or his or her caregiver's or representative's) right and 
ability to electronically access his or her health information without 
undue burden? Would existing portals or other electronic means 
currently in use by many hospitals satisfy such a requirement regarding 
patient/resident access as well as interoperability?
    <bullet> Are new or revised CMS CoPs/CfCs/RfPs for interoperability 
and electronic exchange of health information necessary to ensure 
patients/residents and their treating providers routinely receive 
relevant electronic health information from hospitals on a timely basis 
or will this be achieved in the next few years through existing 
Medicare and Medicaid policies, the implementing regulations related to 
the privacy and security standards of the Health Insurance Portability 
and Accountability Act of 1996 (HIPAA) (Pub. L. 104-91), and 
implementation of relevant policies in the 21st Century Cures Act?
    <bullet> What would be a reasonable implementation timeframe for 
compliance with new or revised CMS CoPs/CfCs/RfPs for interoperability 
and electronic exchange of health information if CMS were to propose 
and finalize such requirements? Should these requirements have delayed 
implementation dates for specific participating providers and 
suppliers, or types of participating providers and suppliers (for 
example, participating providers and suppliers that are not eligible 
for the Medicare and Medicaid EHR Incentive Programs)?
    <bullet> Do stakeholders believe that new or revised CMS CoPs/CfCs/
RfPs for interoperability and electronic exchange of health information 
would help improve routine electronic transfer of health information as 
well as overall patient/resident care and safety?
    <bullet> Under new or revised CoPs/CfCs/RfPs, should non-electronic 
forms of sharing medically necessary information (for example, printed 
copies of patient/resident discharge/transfer summaries shared directly 
with the patient/resident or with the receiving provider or supplier, 
either directly transferred with the patient/resident or by mail or fax 
to the receiving provider or supplier) be permitted to continue if the 
receiving provider, supplier, or patient/resident cannot receive the 
information electronically?
    <bullet> Are there any other operational or legal considerations 
(for example, implementing regulations related to the HIPAA privacy and 
security standards), obstacles, or barriers that hospitals and other 
providers and suppliers would face in implementing changes to meet new 
or revised interoperability and health information exchange 
requirements under new or revised CMS CoPs/CfCs/RfPs if they are 
proposed and finalized in the future?
    <bullet> What types of exceptions, if any, to meeting new or 
revised interoperability and health information exchange requirements 
should be allowed under new or revised CMS CoPs/CfCs/RfPs if they are 
proposed and finalized in the future? Should exceptions under the QPP, 
including CEHRT hardship or small practices, be extended to new 
requirements? Would extending such exceptions impact the effectiveness 
of these requirements?
    We would also like to directly address the issue of communication 
between hospitals (as well as the other providers and suppliers across 
the continuum of patient care) and their patients and caregivers. 
MyHealthEData is a government-wide initiative aimed at breaking down 
barriers that contribute to preventing patients from being able to 
access and control their medical records. Privacy and security of 
patient data will be at the center of all CMS efforts in this area. CMS 
must protect the confidentiality of patient data, and CMS is completely 
aligned with the Department of Veterans Affairs (VA), the National 
Institutes of Health (NIH), ONC, and the rest of the Federal 
Government, on this objective.
    While some Medicare beneficiaries have had, for quite some time, 
the ability to download their Medicare claims information, in pdf or 
Excel formats, through the CMS Blue Button platform, the information 
was provided without any context or other information that would help 
beneficiaries understand what the data were really telling them. For 
beneficiaries, their claims information is useless if it is either too 
hard to obtain or, as was the case with the information provided 
through previous versions of Blue Button, hard to understand. In an 
effort to fully contribute to the Federal Government's MyHealthEData 
initiative, CMS developed and launched the new Blue Button 2.0, which 
represents a major step toward giving patients meaningful control of 
their health information in an easy-to-access and understandable way. 
Blue Button 2.0 is a developer-friendly, standards-based application 
programming interface (API) that enables Medicare beneficiaries to 
connect their claims data to secure applications, services, and 
research programs they trust. The possibilities for better care through 
Blue Button 2.0 data are exciting, and might include enabling the 
creation of health dashboards for Medicare beneficiaries to view their 
health information in a single portal, or allowing beneficiaries to 
share complete medication lists with their doctors to prevent dangerous 
drug interactions.
    To fully understand all of these health IT interoperability issues, 
initiatives, and innovations through the lens of its regulatory 
authority, CMS invites members of the public to submit their ideas on 
how best to accomplish the goal of fully interoperable health IT and 
EHR systems for Medicare- and Medicaid-participating providers and 
suppliers, as well as how best to further contribute to and advance the 
MyHealthEData initiative for patients. We are particularly interested 
in identifying fundamental barriers to interoperability and health 
information exchange, including those specific barriers that prevent 
patients from being able to access and control their medical records. 
We also welcome the public's ideas and innovative thoughts on 
addressing these barriers and ultimately removing or reducing them in 
an effective way, specifically through revisions to the current CMS 
CoPs, CfCs, and RfPs for hospitals and other participating providers 
and suppliers. We have received stakeholder input through recent CMS 
Listening Sessions on the need to address health IT adoption and 
interoperability among providers that were not eligible for the 
Medicare and Medicaid EHR Incentives program, including long-term and 
post-acute care providers, behavioral health providers, clinical 
laboratories and social service providers, and we would also welcome 
specific input on how to encourage adoption of certified health IT and 
interoperability among these types of providers and suppliers as well.

B. Request for Information on Price Transparency: Improving Beneficiary 
Access to Home Health Agency Charge Information

    In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20548 and 20549) 
and the FY 2015 IPPS/LTCH PPS proposed and final rules (79 FR 28169 and 
79 FR 50146, respectively), we stated that we intend to continue to 
review and post relevant charge data in a consumer-friendly way, as we 
previously have done by posting hospital and physician charge

[[Page 32474]]

information on the CMS website.\107\ In the FY 2019 IPPS/LTCH PPS 
proposed rule, we also continued our discussion of the implementation 
of section 2718(e) of the Public Health Service Act, which aims to 
improve the transparency of hospital charges. This discussion in the FY 
2019 IPPS/LTCH PPS proposed rule continued a discussion we began in the 
FY 2015 IPPS/LTCH PPS proposed rule and final rule (79 FR 28169 and 79 
FR 50146, respectively). In all of these rules, we noted that section 
2718(e) of the Public Health Service Act requires that each hospital 
operating within the United States, for each year, establish (and 
update) and make public (in accordance with guidelines developed by the 
Secretary) a list of the hospital's standard charges for items and 
services provided by the hospital, including for diagnosis-related 
groups (DRGs) established under section 1886(d)(4) of the Social 
Security Act. In the FY 2015 IPPS/LTCH PPS proposed and final rules, we 
reminded hospitals of their obligation to comply with the provisions of 
section 2718(e) of the Public Health Service Act and provided 
guidelines for its implementation. We stated that hospitals are 
required to either make public a list of their standard charges 
(whether that be the chargemaster itself or in another form of their 
choice) or their policies for allowing the public to view a list of 
those charges in response to an inquiry. In the FY 2019 IPPS/LTCH PPS 
proposed rule, we took one step to further improve the public 
accessibility of charge information. Specifically, effective January 1, 
2019, we are updating our guidelines to require hospitals to make 
available a list of their current standard charges via the internet in 
a machine readable format and to update this information at least 
annually, or more often as appropriate.
---------------------------------------------------------------------------

    \107\ See, for example, Medicare Provider Utilization and 
Payment Data, available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html.
---------------------------------------------------------------------------

    In general, we encourage all providers and suppliers to undertake 
efforts to engage in consumer-friendly communication of their charges 
to help patients understand what their potential financial liability 
might be for services they obtain, and to enable patients to compare 
charges for similar services. We encourage providers and suppliers to 
update this information at least annually, or more often as 
appropriate, to reflect current charges.
    We are concerned that challenges continue to exist for patients due 
to insufficient price transparency. Such challenges include patients 
being surprised by out-of-network bills for physicians, such as 
anesthesiologists and radiologists, who provide services at in-network 
hospitals and in other settings, and patients being surprised by 
facility fees, physician fees for emergency department visits, or fees 
for services that are part of the beneficiary's episode of care but 
that are not otherwise included in a hospital's chargemaster (for 
example, home health or physical therapy services that follow a 
hospital stay but are billed separately). We also are concerned that, 
for providers and suppliers that maintain a list of standard charges, 
the charge data may not be helpful to patients for determining what 
they are likely to pay for a particular service or facility encounter. 
In order to promote greater price transparency for patients, we are 
considering ways to improve the accessibility and usability of current 
charge information.
    We also are considering potential actions that would be appropriate 
to further our objective of having providers and suppliers undertake 
efforts to engage in consumer-friendly communication of their charges 
to help patients understand what their potential financial liability 
might be for services they obtain from the provider or supplier, and to 
enable patients to compare charges for similar services across 
providers and suppliers, including when services could be offered in 
more than one setting. Therefore, we are seeking public comment from 
all providers and suppliers, including home health agencies, on the 
following:
    <bullet> How should we define ``standard charges'' in the home 
health setting? Is there one definition for those settings that 
maintain chargemasters, and potentially a different definition for 
those settings that do not maintain chargemasters? Should ``standard 
charges'' be defined to mean: average or median rates for the items on 
a chargemaster or other price list or charge list; average or median 
rates for groups of items and/or services commonly billed together, as 
determined by the HHA based on its billing patterns; or the average 
discount off the chargemaster, price list or charge list amount across 
all payers, either for each separately enumerated item or for groups of 
services commonly billed together? Should ``standard charges'' be 
defined and reported for both some measure of the average contracted 
rate and the chargemaster, price list or charge list? Or is the best 
measure of a HHA's standard charges its chargemaster, price list or 
charge list?
    <bullet> What types of information would be most beneficial to 
patients, how can HHAs best enable patients to use charge and cost 
information in their decision-making, and how can CMS and HHAs help 
third parties create patient-friendly interfaces with these data?
    <bullet> Should HHAs be required to inform patients how much their 
out-of- pocket costs for a service will be before those patients are 
furnished that service? How can information on out-of-pocket costs be 
provided to better support patients' choice and decision-making? What 
changes would be needed to support greater transparency around patient 
obligations for their out-of-pocket costs? How can CMS help 
beneficiaries to better understand how co-pays and co-insurance are 
applied to each service covered by Medicare? What can be done to better 
inform patients of their financial obligations? Should HHAs play any 
role in helping to inform patients of what their out-of-pocket 
obligations will be?
    <bullet> If HHAs were required to provide patients with information 
on what Medicare pays for a particular service performed by that HHA, 
what changes would need to be made by HHAs? What burden would be added 
as a result of such a requirement?
    In addition, we are seeking public comment on improving a Medigap 
patient's understanding of his or her out-of-pocket costs prior to 
receiving services, especially with respect to the following particular 
questions:
    <bullet> How does Medigap coverage affect patients' understanding 
of their out-of-pocket costs before they receive care? What challenges 
do HHAs face in providing information about out-of-pocket costs to 
patients with Medigap? What changes can Medicare make to support HHAs 
that share out-of-pocket cost information with patients that reflects 
the patient's Medigap coverage? Who is best situated to provide 
patients with clear Medigap coverage information on their out-of-pocket 
costs prior to receipt of care? What role can Medigap plans play in 
providing information to patients on their expected out-of-pocket costs 
for a service? What state-specific requirements or programs help 
educate Medigap patients about their out-of-pocket costs prior to 
receipt of care?

VII. 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

[[Page 32475]]

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:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our estimate of the information collection 
burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' May 2017 National Occupational Employment and Wage 
Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, the following table (Table 57) presents 
the mean hourly wage rate, fringe benefits costs and overhead 
(calculated at 100 percent of salary), and the adjusted hourly wage.

  Table 57--May 2017 National Industry-Specific Occupational Employment and Wage Estimates--NAICS 621600--Home
                                              Health Care Services
----------------------------------------------------------------------------------------------------------------
                                                                                      Fringe
                                                    Occupation      Mean hourly    benefits and      Adjusted
                Occupation title                       code         wage ($/hr)      overhead     hourly wage ($/
                                                                                   (100%) ($/hr)        hr)
----------------------------------------------------------------------------------------------------------------
Registered Nurse (RN)...........................         29-1141          $33.77          $33.77          $67.54
Physical therapists HHAs........................         29-1123           46.19           46.19           92.38
Speech-Language Pathologists (SLP)..............         29-1127           43.93           43.93           87.86
Occupational Therapists (OT)....................         29-1122           43.70           43.70           87.40
----------------------------------------------------------------------------------------------------------------

    This proposed rule makes reference to associated information 
collections that are not discussed in the regulation text contained in 
this document. These proposed changes are associated with the 
Information Collection Request (ICR) for CMS-10545--Outcome and 
Assessment Information Set (OASIS) OASIS-C2/ICD-10, approved under OMB 
control number 0938-1279. We note that on March 12, 2018 we published a 
notice in the Federal Register seeking public comment on a revision to 
CMS-10545 (OMB control number 0938-1279), which would modify the OASIS 
and refer to the revised item set as the OASIS-D upon implementation of 
the revised data set on January 1, 2019 (83 FR 10730). We are 
soliciting public comment on additional changes related to when certain 
OASIS items are required to be completed by HHA clinicians due to the 
proposed implementation of the patient-driven groupings model (PDGM) 
for CY 2020, as outlined in section III.F of this proposed rule; and 
the changes to due to the proposed removal of HH QRP measures beginning 
with the CY 2021 HH QRP, as outlined in section V.E of this proposed 
rule.

B. ICRs Regarding the OASIS

    We believe that the burden associated with the OASIS is the time 
and effort associated with data collection and reporting. As of April 
1, 2018, there are approximately 11,623 HHAs reporting OASIS data to 
CMS.
    In section V.E.1 of the proposed rule, we are proposing to remove 
the Depression Assessment Conducted Measure from the HH QRP beginning 
with the CY 2021 HH QRP under our proposed Factor 1. Measure 
performance among HHAs is so high and unvarying that meaningful 
distinctions in improvements in performance can no longer be made. The 
removal of this measure will not impact collection of information 
because OASIS Item M1730, which is used to calculate this measure, is 
also used as a risk adjuster to calculate other OASIS-based outcome 
measures currently adopted for the HH QRP.\108\
---------------------------------------------------------------------------

    \108\ The OASIS-based HH QRP outcome measures that use OASIS 
Item M1730 as a risk adjuster in the calculation of the measure are: 
Improvement in Bathing (NQF #0174), Improvement in Bed Transferring 
(NQF #0175), Improvement in Ambulation/Locomotion (NQF #0167), 
Improvement in Dyspnea, Improvement in Pain Interfering with 
Activity (NQF #0177), Improvement in Management of Oral Medications 
(NQF #0176), and Improvement in Status of Surgical Wounds (NQF 
#0178).
---------------------------------------------------------------------------

    In section V.E.2 of the proposed rule, we are proposing to remove 
the Diabetic Foot Care and Patient/Caregiver Education Implemented 
during All Episodes of Care Measure from the HH QRP beginning with the 
CY 2021 HH QRP under our proposed Factor 1. Measure performance among 
HHAs is so high and unvarying that meaningful distinctions in 
improvements in performance can no longer be made. This measure is 
calculated using OASIS Item M2401, row a at the time point of Transfer 
to an Inpatient Facility (TOC) and Discharge from Agency--Not to an 
Inpatient Facility (Discharge). Specifically, we are proposing to 
remove this one data element at the TOC and Discharge time points.
    In section V.E.3 of the proposed rule, we are proposing to remove 
the Multifactor Fall Risk Assessment Conducted For All Patients Who Can 
Ambulate (NQF #0537) Measure from the HH QRP beginning with the CY 2021 
HH QRP under our proposed Factor 1. Measure performance among HHAs is 
so high and unvarying that meaningful distinctions in improvements in 
performance can no longer be made. This measure is calculated using 
OASIS Item M1910 at the time point of SOC/ROC. Specifically, we are 
proposing to remove this one data element at the SOC/ROC time point.
    In section V.E.4 of the proposed rule, we are proposing to remove 
the Pneumococcal Polysaccharide Vaccine Ever Received Measure from the 
HH QRP beginning with the CY 2021 HH QRP, under our proposed Factor 3. 
A measure does not align with current clinical guidelines or practice. 
This measure is calculated using OASIS Items M1051 and M1056 at the 
time points of TOC and Discharge. Specifically, we are proposing to 
remove these two data elements at the TOC and Discharge time points.
    In section V.E.5 of the proposed rule, we are proposing to remove 
the Improvement in the Status of Surgical Wounds Measure from the HH 
QRP beginning with the CY 2021 HH QRP under our proposed Factor 4. A 
more broadly applicable measure (across settings, populations, or 
conditions) for the particular topic is available. The removal of this 
measure will not impact collection of information because OASIS Items 
M1340 and M1342 are

[[Page 32476]]

used as risk adjusters to calculate other OASIS-based outcome measures 
currently adopted for the HH QRP and OASIS Items M1340 and M1342 are 
also used for the Potentially Avoidable Events measure Discharged to 
the Community Needing Wound Care or Medication Assistance that is used 
by HH surveyors during the survey process.<SUP>109 110</SUP>
---------------------------------------------------------------------------

    \109\ The OASIS-based HH QRP outcome measures that use OASIS 
Items M1340 and M1342 as a risk adjuster in the calculation of the 
measure are: Improvement in Bathing (NQF #0174), Improvement in Bed 
Transferring (NQF #0175), Improvement in Ambulation/Locomotion (NQF 
#0167), Improvement in Dyspnea, Improvement in Pain Interfering with 
Activity (NQF #0177), and Improvement in Management of Oral 
Medications (NQF #0176).
    \110\ Measure specifications can be found in the Home Health 
Potentially Avoidable Events Measures Table on the Home Health 
Quality Measures website (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/Home-Health-PAE-Measures-Table-OASIS-C2_4-11-18.pdf).
---------------------------------------------------------------------------

    In sections V.E.6 and V.E.7 of the proposed rule, we are proposing 
to remove the Emergency Department Use without Hospital Readmission 
during the First 30 Days of HH (NQF #2505) Measure and the 
Rehospitalization during the First 30 Days of HH (NQF #2380) Measure 
from the HH QRP beginning with the CY 2021 HH QRP under our proposed 
Factor. A more broadly applicable measure (across settings, 
populations, or conditions) for the particular topic is available. 
Because these are both claims-based measures, their removal will not 
impact collection of information.
    Therefore, we are proposing the net reduction of 1 data element at 
SOC, 1 data element at ROC, 3 data elements at TOC and 3 data elements 
at Discharge associated with OASIS item collection as a result of the 
measure removal proposals from the HH QRP.
    The OASIS instrument is used for meeting the home health Conditions 
of Participation, requirements under the HH QRP, and for payment 
purposes under the HH PPS. As outlined in section III.F of this 
proposed rule, to calculate the case-mix adjusted payment amount for 
the PDGM, we are proposing to add collection of two current OASIS items 
(10 data elements) at the FU time point:

<bullet> M1033: Risk for Hospitalization (9 data elements)
<bullet> M1800: Grooming (1 data element)

    As outlined in section III.F of this proposed rule, several OASIS 
items would not be needed in case-mix adjusting the period payment for 
the PDGM; therefore, we are proposing to make 19 current OASIS items 
(48 data elements) optional at the FU time point:

<bullet> M1021: Primary Diagnosis (3 data elements)
<bullet> M1023: Other Diagnosis (15 data elements)
<bullet> M1030: Therapies (3 data elements)
<bullet> M1200: Vision (1 data element)
<bullet> M1242: Frequency of Pain Interfering (1 data element)
<bullet> M1311: Current Number of Unhealed Pressure Ulcers at Each 
Stage (12 data elements)
<bullet> M1322: Current Number of Stage 1 Pressure Ulcers (1 data 
element)
<bullet> M1324: Stage of Most Problematic Unhealed Pressure Ulcer that 
is Stageable (1 data element)
<bullet> M1330: Does this patient have a Stasis Ulcer? (1 data element)
<bullet> M1332: Current Number of Stasis Ulcer(s) that are Observable 
(1 data element)
<bullet> M1334: Status of Most Problematic Stasis Ulcer that is 
Observable (1 data element)
<bullet> M1340: Does this patient have a Surgical Wound (1 data 
element)
<bullet> M1342: Status of Most Problematic Surgical Wound that is 
Observable (1 data element)
<bullet> M1400: Short of Breath (1 data element)
<bullet> M1610: Urinary Incontinence or Urinary Catheter Presence (1 
data element)
<bullet> M1620: Bowel Incontinence Frequency (1 data element)
<bullet> M1630: Ostomy for Bowel Elimination (1 data element)
<bullet> M2030: Management of Injectable Medications (1 data element)
<bullet> M2200: Therapy Need (1 data element)

    Therefore, we are proposing the net reduction of 38 data elements 
at FU associated with OASIS item collection as a result of the 
implementation of the PDGM for CY 2020.
    In summary, under our proposals, there would be a net reduction of 
1 data element at SOC, 1 data element at ROC, 38 data elements at FU, 3 
data elements at TOC and 3 data elements at Discharge associated with 
OASIS item collection as a result of the measure removal proposals from 
the HH QRP and the proposed implementation of the PDGM starting January 
1, 2020.
    We assume that each data element requires 0.3 minutes of clinician 
time to complete. Therefore, we estimate that there would be a 
reduction in clinician burden per OASIS assessment of 0.3 minutes at 
SOC, 0.3 minutes at ROC, 11.4 minutes at FU, 0.9 minutes at TOC and 0.9 
minutes at Discharge.
    The OASIS is completed by RNs or PTs, or very occasionally by 
occupational therapists (OT) or speech language pathologists (SLP/ST). 
Data from 2016 show that the SOC/ROC OASIS is completed by RNs 
(approximately 87 percent of the time), PTs (approximately 12.7 percent 
of the time), and other therapists, including OTs and SLP/STs 
(approximately 0.3 percent of the time). We estimated a weighted 
clinician average hourly wage of $70.75, inclusive of fringe benefits, 
using the hourly wage data in Table 57. Individual providers determine 
the staffing resources necessary.
    Table 58 shows the total number of assessments submitted in CY 2017 
and estimated burden at each time point.

 Table 58--CY 2017 OASIS Submissions and Estimated Burden, by Time Point
------------------------------------------------------------------------
                                         CY 2017
            Time point                 assessments      Estimated burden
                                        completed             ($)
------------------------------------------------------------------------
Start of Care.....................          6,420,299     -$2,271,180.77
Resumption of Care................          1,062,962        -376,022.81
Follow-up.........................          3,688,651     -49,584,691.07
Transfer to an inpatient facility.          1,925,270      -2,043,192.79
Death at Home.....................             41,183                  0
Discharge from agency.............          5,249,483      -5,571,013.83
                                   -------------------------------------
    Total.........................         18,387,848     -59,846,101.27
------------------------------------------------------------------------
* Estimated Burden ($) at each Time-Point = (# CY 2017 Assessments
  Completed) x (clinician burden [min]/60) x ($70.75 [weighted clinician
  average hourly wage]).


[[Page 32477]]

    Based on the data in Table 58 for the 11,623 active Medicare-
certified HHAs in April 2018, we estimate the total average decrease in 
cost associated with proposed changes with OASIS item collection at 
$5,148.94 per HHA annually, or $59,846,101.27 for all HHAs annually. 
This corresponds to an estimated reduction in clinician burden 
associated with changes to collection of information associated with 
the OASIS of 72.8 hours per HHA annually, or 845,881.3 hours for all 
HHAs annually. This decrease in burden would be accounted for in the 
information collection under OMB control number 0938-1279.

C. ICRs Regarding Home Infusion Therapy

    At Sec.  486.520, Plan of Care, we propose that all patients must 
have a plan of care established by a physician that prescribes the 
type, amount, and duration of infusion therapy services that are to be 
furnished. This requirement directly implements section 5012 of the 
21st Cures Act. Accredited home infusion therapy suppliers are already 
required by their accrediting bodies to provide all care in accordance 
with a plan of care that specifies the type, amount, and duration of 
infusion therapy services to be furnished to each patient; therefore 
this proposed requirement would not impose a burden upon accredited 
agencies. Furthermore, all existing home infusion therapy suppliers are 
already accredited due to existing payment requirements established by 
private insurers and Medicare Advantage plans. In accordance with the 
implementing regulations of the PRA at 5 CFR 1320.3(b)(3), this 
requirement exists even in the absence of a federal requirement; 
therefore, the associated burden is not subject to the PRA.

D. ICRs Regarding the Approval and Oversight of Accrediting 
Organizations for Home Infusion Therapy

1. Background
    We are proposing to establish a new set of regulations related to 
the approval and oversight of accrediting organizations that accredit 
home infusion therapy suppliers. If finalized, these new regulatory 
requirements would impose burden on those new AOs that seek approval of 
their Home Infusion Therapy accreditation program. This burden would 
include, but is not limited to the time and costs associated with the 
following activities: (1) Preparation and filing of an initial 
application seeking CMS approval of the AOs home infusion therapy 
accreditation program; (2) participation in the application review 
process (that is, meetings, provide additional information and 
materials that may be required, participate in a site visit, etc.); (3) 
seeking new accreditation clients; (4) performing on-site surveys, off-
site survey audits or the performance of other types of survey 
activities; (5) participation in CMS ongoing accreditation program 
review activities; (6) performance of periodic re-accreditation 
activities; (7) investigation of complaints and performing complaint 
surveys; (8) administration of the appeals process for providers that 
have been denied accreditation; (9) staff training, in-services and 
continuing education; and (10) ensuring that surveyor staff have the 
proper education, training, and credentials.
    The following is a discussion of the potential ICR burdens 
associated with the proposed home infusion therapy supplier 
accreditation oversight regulations and well as any PRA exceptions that 
may apply.
2. Applicable PRA Exception
    We believe that the information collection burden associated with 
the preparation and submission of an initial or renewal application for 
approval and designation as an home infusion therapy AO and the 
participation in other accreditation related activities does not meet 
the definition of ``collection of information'' as defined in 5 CFR 
1320.3(c) because it is ``not imposed on 10 or more persons.'' This 
information collection burden would be imposed only on those national 
AOs that accredit home infusion therapy suppliers.
    At this time, there are five CMS-approved AOs and one non-CMS-
approved AO that provide accreditation for home infusion therapy 
suppliers (that is, The Joint Commission (TJC), Accreditation 
Commission for Health Care (ACHC), The Compliance Team (TCT), Community 
Health Accreditation Partner (CHAP), Healthcare Quality Association on 
Accreditation, and National Association of Boards of Pharmacy). 
However, these AOs offer home infusion therapy accreditation as part of 
the deeming accreditation of home health agencies or the home infusion 
therapy accreditation provided is CMS approved.
    In this proposed rule, we have proposed to require that these AO 
must apply for CMS approval of a home infusion therapy accreditation 
that is separate and distinct from its home health accreditation 
program. When we do solicit AOs to accredit home infusion therapy 
suppliers, we do not anticipate receiving more than the six 
applications which would be submitted by the existing AOs seeking 
approval of a home infusion therapy accreditation program, because this 
is a specialized area of accreditation.
    It is possible that the number of AOs that we designate to accredit 
home infusion therapy suppliers may increase to 10 or more in the 
future, when we begin accepting applications for home infusion therapy 
AOs. However, we do not anticipate that the number of AOs that would 
accredit home infusion therapy suppliers would increase to 10 or more 
in the foreseeable future.
    Should the number of AOs that accredit home infusion therapy 
suppliers rise to 10 or more, we would prepare and submit an 
information collection request (ICR) for the burden associated with the 
accreditation process, as well as obtain OMB approval, prior to 
accepting additional applications.

E. ICR Regarding Modifications to 42 CFR 488.5

    We have proposed to modify the AO approval and oversight 
regulations for Medicare certified providers and suppliers by adding 2 
new requirements. The first proposed new requirement is to added to 
Sec.  488.5(a)(7) and is a requirement that in their application for 
CMS approval, the AOs that accredited Medicare certified providers and 
suppliers must include a statement acknowledging that all accrediting 
organization surveyors have completed or will complete the relevant 
program specific CMS online trainings established for state surveyors, 
initially, and thereafter. The second requirement is to be added as 
Sec.  488.5(a)(18)(iii) and would require that the AOs for Medicare 
certified providers and suppliers include a written statement in their 
application for CMS approval agreeing that if a fully accredited and 
deemed facility in good standing provides written notification that 
they wish to voluntarily withdraw from the accrediting organization's 
CMS-approved accreditation program, the accrediting organization must 
continue the facility's current accreditation in full force and effect 
until the effective date of withdrawal identified by the facility or 
the expiration date of the term of accreditation, whichever comes 
first.
1. Burden Associated With CMS Online Training for AO Surveyors
    CMS provides a number of online surveyor training modules that are 
available to the State Survey Agency surveyors. We have proposed to 
require the AO surveyors to take this training in an attempt to 
decrease the historically

[[Page 32478]]

high disparity rate between the AOs survey results and those of the 
validation surveys performed by the State Survey Agency surveyors.
    There are a total of 163 online training programs that are 
available the State Survey Agency surveyors on the CMS Surveyor 
Training website. This website provides courses that are general in 
nature such as ``Principles of Documentation Learning Activity--Long 
Term Care'' and ``Basic Writing Skills for Surveyor Staff'', infection 
control, patient safety, Emergency Preparedness. The CMS Surveyor 
Training website also offers courses related to specific healthcare 
settings, services, and regulations such as hospitals, CAHs, ASCs, 
CLIA, Community Mental Health Centers, EMTALA, Federally Qualified 
Health Centers (FQHCs), Home Health Agencies and OASIS, Hospices, 
Nursing Homes and the MDS, Outpatient Physical Therapy/Outpatient 
Speech Therapy. These courses are self-paced and the person taking the 
course can take the courses over a period of time. The amount of time 
required to complete each of these training course varies depending on 
the pace at which the trainee completes the training.
    We estimate that each SA surveyor takes approximately 10 of these 
courses. We further estimate that it would take approximately 3-5 hours 
to complete each of these courses. Therefore a SA surveyor would incur 
a time burden of 30-50 hours for the completion of these CMS surveyor 
training courses. We believe that the surveyors for AOs that accredit 
Medicare certified providers would need to take the same number and 
type of surveyor training courses as the SA surveyors (that is--
approximately 10 courses). This means that each of the AOs surveyors 
that takes this training would incur a time burden in the amount of 30-
50 hours.
    The AOs that accredit Medicare certified providers and suppliers 
would incur a cost burden for the wages of their surveyors for the time 
they spend taking these online surveyor training courses. Most 
surveyors are clinicians such as Registered Nurses. According to the 
U.S. Bureau of Labor Statistics, the mean hourly wage for a Registered 
Nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). As 
noted above, we estimated that it would take approximately 30-50 hours 
for each AO surveyor to complete 10 online surveyor courses. Therefore, 
the AO would incur wages in the amount of $1,060.80 to $1,768.00 per 
each surveyor that completes the CMS online surveyor training. The AO 
would also incur additional costs for fringe benefits and overhead in 
the amount of $1,060.80 to $1,768.00 per each surveyor that completes 
the CMS online surveyor training.
    We are not able to accurately estimate to total time and cost 
burden to each AO for the wages incurred for the time spent by all 
surveyors of that AO that take the CMS online surveyor training 
courses, because we do not know exactly how many surveyors each AO has. 
However, if we estimate that each AO has 15 surveyors, the estimated 
time burden to each AO associated with this requirement would be 450 to 
750 hours ((30 hours x 15 surveyors = 450 hours per all surveyors) and 
(50 hours x 15 surveyors = 750 hours per all surveyors)). The estimated 
cost burden to each AO for Medicare certified providers and supplies 
associated with this requirement would be $31,824 to $53,040 
(($1,060.80 x 15 = $15,912) and ($1,768.00 x 15= $26,520) and ($15,912 
to $26,520 for fringe benefits and overhead)).
    There are currently 9 AOs that accredit Medicare certified 
providers and suppliers. We estimate that the time burden across all of 
these AOs associated with the requirement that their surveyors take the 
CMS online surveyor training would be 4,050 to 6,750 ((450 hours per 
all surveyors/AO x 9 AOs = 4,050 hours across all AOs) and (750 hours 
per all surveyors/AO x 9 AOs = 6,750 hours across all AOs). The 
estimated cost across all AOs that accredit Medicare certified 
providers and suppliers would be $763,776 ($15,912 x 9 AOs = $143,208) 
and ($26,520 x 9 AOs = $238,680) and ($381,888 for fringe benefits and 
overhead).
    However, we believe that the information collection burden 
associated with the requirement that the surveyors of AOs that accredit 
Medicare certified providers and suppliers does not meet the definition 
of ``collection of information'' as defined in 5 CFR 1320.3(c) because 
it is ``not imposed on 10 or more persons.'' This information 
collection burden would be imposed only on those AOs that accredit 
Medicare certified providers and suppliers. At this time, there are 
nine CMS-approved AOs that accredit Medicare certified providers and 
suppliers (that is, AAAASF, AAAHC, ACHC, AOA-HFAP, Community Health 
Accreditation Partner (CHAP), CIHQ, DNV-GL, The Joint Commission (TJC), 
Accreditation Commission for Health Care (ACHC), The Compliance Team 
(TCT)). Should the number of AOs that accredit Medicare certified 
providers and suppliers rise to 10 or more, we will seek OMB approval 
for the burden associated with the accreditation process.
2. Burden Associated With the Requirement for AOs To Continue a 
Medicare-Certified Provider's or Supplier's Accreditation
    This proposal would require the AOs for Medicare certified 
providers and suppliers to include a written statement in their 
application for CMS approval of their accreditation program, agreeing 
that if a fully accredited and deemed facility in good standing 
provides written notification that they wish to voluntarily withdraw 
from the accrediting organization's CMS-approved accreditation program, 
the accrediting organization must continue the facility's current 
accreditation in full force and effect until the effective date of 
withdrawal identified by the facility or the expiration date of the 
term of accreditation, whichever comes first.
    We believe that the AO would incur limited burden associated with 
this task, because this regulation simply requires that the AOs include 
a written statement in their application stating that they agree to 
continue the facility's current accreditation in full force and effect 
until the effective date of withdrawal identified by the facility or 
the expiration date of the term of accreditation, whichever comes 
first, if a provider of supplier provides written notification that 
they wish to voluntarily withdraw from the accrediting organization's 
CMS-approved accreditation program. All AOs that accredit Medicare 
certified providers and suppliers are required to submit an initial 
application to CMS when they first seek CMS approval and to submit 
renewal applications to CMS every 6 years thereafter. In accordance 
wirh 42 CFR 488.5, the AOs are required to provide a number of written 
acknowledgements with their application. We believe that the AO could 
add the required written statement to the other written 
acknowledgements that are included with their applications. As the AO 
would already be preparing the other acknowledgements required to be 
submitted with their application, it would be little if any additional 
burden for the AO to add the required written statement to their 
application.
    We estimate that the required written statement would consist of 
only 1-2 sentences and would take no more than 5 minutes to prepare. We 
further believe that clinicians such as registered nurses would prepare 
the required statement to be included in the AOs application. According 
to the U.S. Bureau of Labor Statistics, the mean hourly wage for a

[[Page 32479]]

non-industry specific registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the 
AOs associated with the preparation of the written statement would be 
approximately $17.68 (15 minutes x $35.36 per hour = $8.84 plus $8.84 
in fringe benefits and overhead = $17.68).
    There are 9 AOs that accredit Medicare certified providers and 
suppliers. The estimated time burden across all of these AOs would be 
45 minutes (15 minutes x 9 AOs = 135 minutes per all AOs). The 
estimated cost burden across all AOs that accredit Medicare certified 
providers and suppliers would be $159.12 ($8.84 x 9 AOs = $79.56 per 
all AOs + $79.56 for fringe benefits and overhead).
    However, we believe that the information collection burden 
associated with the requirement that the AOs that accredit Medicare 
certified providers and suppliers provide a written statement in their 
application stating that they agree to continue the facility's current 
accreditation in full force and effect until the effective date of 
withdrawal identified by the facility or the expiration date of the 
term of accreditation, whichever comes first, if a provider or supplier 
provides written notification that they wish to voluntarily withdraw 
from the accrediting organization's CMS-approved accreditation program, 
does not meet the definition of ``collection of information'' as 
defined in 5 CFR 1320.3(c) because it is ``not imposed on 10 or more 
persons.'' This information collection burden would be imposed only on 
those AOs that accredit Medicare-certified providers and suppliers. At 
this time, there are nine CMS-approved AOs that accredit Medicare-
certified providers and suppliers (that is, AAAASF, AAAHC, ACHC, AOA-
HFAP, Community Health Accreditation Partner (CHAP), CIHQ, DNV-GL, The 
Joint Commission (TJC), The Compliance Team (TCT)). Should the number 
of AOs that accredit Medicare certified providers or suppliers rise to 
10 or more, we will seek OMB approval for the burden associated with 
the accreditation process.

F. Submission of PRA-Related Comments

    We have submitted a copy of this proposed rule to OMB for its 
review of the rule's information collection and recordkeeping 
requirements. The requirements are not effective until they have been 
approved by OMB.
    We invite public comments on these information collection 
requirements. If you wish to comment, please identify the rule (CMS-
1689-P) and, where applicable, the ICR's CFR citation, CMS ID number, 
and OMB control number.
    To obtain copies of a supporting statement and any related forms 
for the proposed collection(s) summarized in this notice, you may make 
your request using one of following:
    1. Access CMS' website address at https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html.
    2. Email your request, including your address, phone number, OMB 
number, and CMS document identifier, to <a href="/cdn-cgi/l/email-protection#4f1f2e3f2a3d38203d240f2c223c6127273c61282039"><span class="__cf_email__" data-cfemail="7c2c1d0c190e0b130e173c1f110f5214140f521b130a">[email protected]</span></a>.
    3. Call the Reports Clearance Office at (410) 786-1326.
    See this rule's DATES and ADDRESSES sections for the comment due 
date and for additional instructions.

VIII. Regulatory Impact Analysis

A. Statement of Need

1. Home Health Prospective Payment System (HH PPS)
    Section 1895(b)(1) of the Act requires the Secretary to establish a 
HH PPS for all costs of home health services paid under Medicare. In 
addition, section 1895(b) of the Act requires: (1) The computation of a 
standard prospective payment amount include all costs for home health 
services covered and paid for on a reasonable cost basis and that such 
amounts be initially based on the most recent audited cost report data 
available to the Secretary; (2) the prospective payment amount under 
the HH PPS to be an appropriate unit of service based on the number, 
type, and duration of visits provided within that unit; and (3) the 
standardized prospective payment amount be adjusted to account for the 
effects of case-mix and wage levels among HHAs. Section 1895(b)(3)(B) 
of the Act addresses the annual update to the standard prospective 
payment amounts by the HH applicable percentage increase. Section 
1895(b)(4) of the Act governs the payment computation. Sections 
1895(b)(4)(A)(i) and (b)(4)(A)(ii) of the Act require the standard 
prospective payment amount to be adjusted for case-mix and geographic 
differences in wage levels. Section 1895(b)(4)(B) of the Act requires 
the establishment of appropriate case-mix adjustment factors for 
significant variation in costs among different units of services. 
Lastly, section 1895(b)(4)(C) of the Act requires the establishment of 
wage adjustment factors that reflect the relative level of wages, and 
wage-related costs applicable to home health services furnished in a 
geographic area compared to the applicable national average level.
    Section 1895(b)(3)(B)(iv) of the Act provides the Secretary with 
the authority to implement adjustments to the standard prospective 
payment amount (or amounts) for subsequent years to eliminate the 
effect of changes in aggregate payments during a previous year or years 
that were the result of changes in the coding or classification of 
different units of services that do not reflect real changes in case-
mix. Section 1895(b)(5) of the Act provides the Secretary with the 
option to make changes to the payment amount otherwise paid in the case 
of outliers because of unusual variations in the type or amount of 
medically necessary care. Section 1895(b)(3)(B)(v) of the Act requires 
HHAs to submit data for purposes of measuring health care quality, and 
links the quality data submission to the annual applicable percentage 
increase. Section 50208 of the BBA of 2018 (Pub. L. 115-123) requires 
the Secretary to implement a new methodology used to determine rural 
add-on payments for CYs 2019 through 2022.
    Section 1895(b)(2) of the Act and section 1895(b)(3)(A) of the Act, 
as amended by section 51001(a)(1) and 51001(a)(2) of the BBA of 2018 
respectively, require the Secretary to implement a 30-day unit of 
service, effective for CY 2020, and calculate a 30-day payment amount 
for CY 2020 in a budget neutral manner, respectively. In addition, 
section 1895(b)(4)(B) of the Act, as amended by section 51001(a)(3) of 
the BBA of 2018 requires the Secretary to eliminate the use of the 
number of therapy visits provided to determine payment, also effective 
for CY 2020.
    Finally, the HHVBP Model applies a payment adjustment based on an 
HHA's performance on quality measures to test the effects on quality 
and expenditures.
2. Home Infusion Therapy
    Section 1861(iii) of the Act, as added by the Cures Act, sets forth 
three elements for home infusion therapy suppliers in three areas: (1) 
Ensuring that all patients have a plan of care established and updated 
by a physician that sets out the care and prescribed infusion therapy 
necessary to meet the patient-specific needs, (2) having procedures to 
ensure that remote monitoring services associated with administering 
infusion drugs in a patient's home are provided, and (3) having 
procedures to ensure that patients receive education and training on 
the effective use of medications and equipment in the home. These

[[Page 32480]]

provisions serve as the basis for suppliers to participate in Medicare.
    Section 1834(u) of the Act serves as the basis for the 
establishment of a prospective payment system for home infusion therapy 
covered under Medicare. Section 1834(u)(7) of the Act, as added by BBA 
of 2018 requires the Secretary to provide a temporary transitional 
payment to eligible home infusion therapy suppliers for items and 
services associated with the furnishing of transitional home infusion 
drugs for CYs 2019 and 2020. Under this payment methodology (as 
described in section VI.C. of this proposed rule), the Secretary would 
establish three payment categories at amounts equal to the amounts 
determined under the Physician Fee Schedule established under section 
1848 for services furnished during CY 2019 for codes and units of such 
codes, determined without application of the geographic adjustment.
    Section 1834(u)(5)(B) of the Act requires the Secretary to 
designate organizations to accredit qualified home infusion therapy 
suppliers furnishing home infusion therapy no later than January 1, 
2021. Qualified home infusion therapy suppliers must furnish infusion 
therapy to individuals with acute or chronic conditions requiring 
administration of home infusion drugs; ensure the safe and effective 
provision and administration of home infusion therapy on a 7-day-a-
week, 24-hour-a-day basis; be accredited by an accrediting organization 
designated and approved by the Secretary; and meet other such 
requirements as the Secretary deems appropriate.

B. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), 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), the Congressional Review Act (5 U.S.C. 804(2)), and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    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). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). The net transfer impact related to the changes in payments under 
the HH PPS for CY 2019 is estimated to be $400 million (2.1 percent). 
The net transfer impact in CY 2020 related to the change in the unit of 
payment under the proposed PDGM is estimated to be $0 million as 
section 51001(a) of the BBA of 2018 requires such change to be 
implemented in a budget-neutral manner. The net transfer impact in CY 
2019 related to the Temporary Transitional Payment for Home Infusion 
Therapy is estimated to be $60 million. The savings impacts related to 
the HHVBP model as a whole are estimated at $378 million. The cost 
impact related to OASIS item collection as a result of the proposed 
implementation of the PDGM and proposed changes to the HH QRP is 
estimated to be a net $60 million in annualized cost savings to HHAs, 
discounted at 7 percent relative to year 2016, over a perpetual time 
horizon beginning in CY 2020. Finally, the estimated cost impact to 
each potential home infusion therapy AO is $23,258. We estimate that 
this rulemaking is ``economically significant'' as measured by the $100 
million threshold, and hence also a major rule under the Congressional 
Review Act. Accordingly, we have prepared a Regulatory Impact Analysis 
that to the best of our ability presents the costs and benefits of the 
rulemaking.

C. Anticipated Effects

    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, small entities 
include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most hospitals and most other providers and 
suppliers are small entities, either by nonprofit status or by having 
revenues of less than $7.5 million to $38.5 million in any one year. 
For the purposes of the RFA, we estimate that almost all HHAs are small 
entities as that term is used in the RFA. Individuals and states are 
not included in the definition of a small entity. The economic impact 
assessment is based on estimated Medicare payments (revenues) and HHS's 
practice in interpreting the RFA is to consider effects economically 
``significant'' only if greater than 5 percent of providers reach a 
threshold of 3 to 5 percent or more of total revenue or total costs. 
The majority of HHAs' visits are Medicare paid visits and therefore the 
majority of HHAs' revenue consists of Medicare payments. Based on our 
analysis, we conclude that the policies proposed in this rule would 
result in an estimated total impact of 3 to 5 percent or more on 
Medicare revenue for greater than 5 percent of HHAs. Therefore, the 
Secretary has determined that this HH PPS proposed rule would have a 
significant economic impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
RIA 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 603 of 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 rule is not applicable to hospitals. Therefore, the 
Secretary has determined this proposed rule would not have a 
significant economic impact on the operations of small rural hospitals.
    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 2018, that 
threshold is approximately $150 million. This rule is not anticipated 
to have an effect on State, local, or tribal

[[Page 32481]]

governments, in the aggregate, or on the private sector of $150 million 
or more.
    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 these criteria 
of Executive Order 13132, and have determined that it will not impose 
substantial direct costs on state or local governments. If regulations 
impose administrative costs on private entities, such as the time 
needed to read and interpret this proposed rule, we must estimate the 
cost associated with regulatory review. Due to the uncertainty involved 
with accurately quantifying the number of entities that would review 
the rule, we assume that the total number of unique commenters on this 
year's proposed rule would be the similar to the number of reviewers of 
last year's proposed rule. We acknowledge that this assumption may 
understate or overstate the costs of reviewing this rule. It is 
possible that not all commenters reviewed this year's rule in detail, 
and it is also possible that some reviewers chose not to comment on the 
proposed rule. For these reasons we thought that the number of past 
commenters would be a fair estimate of the number of reviewers of this 
rule. We welcome any comments on the approach in estimating the number 
of entities which would review this proposed rule. We also recognize 
that different types of entities are in many cases affected by mutually 
exclusive sections of this proposed rule, and therefore for the 
purposes of our estimate we assume that each reviewer reads 
approximately 50 percent of the rule. We seek comments on this 
assumption. Using the wage information from the BLS for medical and 
health service managers (Code 11-9111), we estimate that the cost of 
reviewing this rule is $107.38 per hour, including overhead and fringe 
benefits (https://www.bls.gov/oes/current/oes_nat.htm. Assuming an 
average reading speed of 250 words per minute, we estimate that it 
would take approximately 5.3 hours for the staff to review half of this 
proposed rule, which consists of approximately 160,000 words. For each 
HHA that reviews the rule, the estimated cost is $569.11 (5.3 hours x 
$107.38). Therefore, we estimate that the total cost of reviewing this 
regulation is $767,729.39 ($569.11 x 1,349 reviewers).
1. HH PPS
a. HH PPS for CY 2019
    The update set forth in this rule applies to Medicare payments 
under HH PPS in CY 2019. Accordingly, the following analysis describes 
the impact in CY 2019 only. We estimate that the net impact of the 
policies in this rule is approximately $400 million in increased 
payments to HHAs in CY 2019. We applied a wage index budget neutrality 
factor and a case-mix weight budget neutrality factor to the rates as 
discussed in section III.C.3 of this proposed rule. Therefore, the 
estimated impact of the 2019 wage index and the recalibration of the 
case-mix weights for CY 2019 is $0 million. The $400 million increase 
reflects the distributional effects of the CY 2019 home health payment 
update of 2.1 percent ($400 million increase), a 0.1 percent increase 
in payments due to decreasing the FDL ratio in order to target to pay 
no more than 2.5 percent of total payments as outlier payments ($20 
million increase) and a 0.1 percent decrease in payments due to the new 
rural add-on policy mandated by the BBA of 2018 for CY 2019 ($20 
million decrease). The $400 million in increased payments is reflected 
in the last column of the first row in Table 59 as a 2.1 percent 
increase in expenditures when comparing CY 2018 payments to estimated 
CY 2019 payments.
    With regards to options for regulatory relief, the rural add-on 
policy for CYs 2019 through 2022 is statutory and we do not have the 
authority to alter the methodology used to categorize rural counties or 
to revise the rural add-on percentages.
b. HH PPS for CY 2020 (Proposed PDGM)
    We estimate no net impact of the proposed policies related to the 
implementation of the PDGM for the CY 2020 HH PPS, as the transition to 
the 30-day unit of payment is required to be budget neutral. However, 
since the PDGM eliminates the use of therapy thresholds as a factor in 
determining payment, HHAs that provide more nursing visits, and thus 
experience lower margins under the current payment system which may 
incentivize overutilization of therapy, may experience higher payments. 
Conversely, HHAs that provide more therapy visits compared to nursing 
visits, and thus may profit more from the current payment system, may 
experience lower payments.
c. Proposed Elimination of Recertification Requirement To Estimate How 
Much Longer Home Health Services Will Be Required
    Sections 1814(a)(2)(C) and 1835(a)(2)(A) of the Act require, as a 
condition of payment, that a physician must certify (and recertify, 
when home health services are furnished over a period of time) that the 
individual is eligible for home health services. The regulations at 
Sec.  424.22(b)(2) set forth the content and basis for recertification 
requirements and states that the recertification statement must 
indicate the continuing need for services and estimate how much longer 
the services will be required. This requirement has been longstanding 
policy that predates the Paperwork Reduction Act of 1995 requirements. 
Therefore, there is no corresponding Collection of Information that was 
submitted to the Office of Management and Budget (OMB) for review and 
approval for the burden estimate for the recertification requirement 
that the certifying physician must estimate how much longer home health 
services will be required.
    In section III.G. of this proposed rule, we are proposing to 
eliminate the regulatory requirement as set forth at 42 CFR 
424.22(b)(1), that the certifying physician, as part of the 
recertification process, include an estimate of how much longer home 
health services will be required at each home health recertification. 
While all other recertification content requirements under Sec.  424.22 
will remain unchanged, the certifying physician would not be required 
to provide his/her estimation as to how much longer the patient will 
require home health services on recertifications on and after January 
1, 2019. Therefore, we believe this would result in a reduction of 
burden for certifying physicians by reducing the amount of time 
physicians spend on the recertification process and we are providing an 
estimate on the reduction in burden in this proposed rule. All salary 
information is based on the May 2017 wage data for physicians and 
surgeons from the Bureau of Labor Statistics (BLS) website at (https://www.bls.gov/oes/current/oes291069.htm) and includes a fringe benefits 
and overhead worth 100 percent of the base salary.
    Using CY 2017 claims, we estimate that of the total number of 
Medicare home health claims (5.8 million), 37 percent were 
recertifications (2.1 million) completed by 284,615

[[Page 32482]]

certifying physicians.\111\ Of those 2.1 million recertifications, we 
estimate that the time needed to recertify patient eligibility will 
decrease by 2 minutes per recertification with a total reduction of 
69,930 physician hours for all recertifications as a result of 
eliminating the time estimation statement. Based on the physician's 
hourly wage of $203.26 as described previously ($101.63 with 100 
percent fringe benefits and overhead), this results in an overall 
annualized cost savings of $14.2 million beginning in CY 2019.
---------------------------------------------------------------------------

    \111\ CY 2017 OASIS assessments matched to Medicare FFS claims 
(as of March 2, 2018).
---------------------------------------------------------------------------

2. HHVBP Model
    Under the HHVBP Model, the first payment adjustment applies in CY 
2018 based on PY1 (2016) data and the final payment adjustment will 
apply in CY 2022 based on PY5 (2020) data. In the CY 2016 HH PPS final 
rule, we estimated that the overall impact of the HHVBP Model from CY 
2018 through CY 2022 was a reduction of approximately $380 million (80 
FR 68716). In the CY 2017 HH PPS final rule, we estimated that the 
overall impact of the HHVBP Model from CY 2018 through CY 2022 was a 
reduction of approximately $378 million (81 FR 76795). We do not 
believe the changes proposed in this rule would affect the prior 
estimates.
3. Home Infusion Therapy
a. Health and Safety Standards
    Section 5012 of the Cures Act (Pub. L. 114-255), which amended 
section 1861(s)(2) of the Social Security Act (the Act), established a 
new Medicare home infusion therapy benefit. Section 1861(iii) of the 
Act, as added by section 5012 of the Cures Act defines, the Medicare 
home infusion therapy benefit and covers professional services 
including nursing services, training and education, and remote 
monitoring and monitoring services associated with administering 
certain infusion drugs in a patient's home. This benefit would ensure 
consistency in coverage for home infusion benefits for all Medicare 
beneficiaries. Section 1861(iii) of the Act, as added by the Cures Act, 
sets forth elements for home infusion therapy suppliers in three areas: 
(1) Ensuring that all patients have a plan of care established and 
updated by a physician that sets out the care and prescribed infusion 
therapy necessary to meet the patient-specific needs, (2) having 
procedures to ensure that remote monitoring services associated with 
administering infusion drugs in a patient's home are provided, and (3) 
having procedures to ensure that patients receive education and 
training on the effective use of medications and equipment in the home.
    We propose to implement the following requirements for home 
infusion therapy suppliers--
    <bullet> Ensure that all patients must have a plan of care 
established by a physician that prescribes the type, amount and 
duration of infusion therapy services that are furnished. The plan of 
care would specify the care and services necessary to meet the patient 
specific needs.
    <bullet> Ensure that the plan of care for each patient is 
periodically reviewed by the physician.
    <bullet> Ensure that patients have infusion therapy support 
services at all times through the provision of professional services, 
including nursing services, furnished in accordance with the plan of 
care on a 7-day-a-week, 24-hour-a-day schedule.
    <bullet> Provide patient training and education.
    <bullet> Provide remote monitoring and monitoring services for the 
provision of home infusion therapy and home infusion drugs.
    All current standards established by AOs already address the 
proposed requirements set forth in this rule. Furthermore, all existing 
home infusion therapy suppliers are already accredited by an existing 
AO for home infusion therapy to meet requirements established by 
private insurers and Medicare Advantage plans. Therefore, we assume 
that there would be no new burden imposed on home infusion therapy 
suppliers in order to meet the proposed health and safety standards. 
Additionally, we assume that these proposed health and safety 
provisions would not impose a new burden on home infusion therapy AOs 
that are likely to apply to be Medicare approved AOs for home infusion 
therapy because their existing standards would already meet or exceed 
those that would be established in this rule.
b. Home Infusion Therapy Payment
    We estimate that the net impact of the policies in this rule is 
approximately $60 million in increased Medicare payments to home 
infusion suppliers in CY 2019. This increase reflects the cost of 
providing infusion therapy services to existing DME home infusion 
therapy beneficiaries (at a 4-hour rate), as the temporary transitional 
payment applies only to existing Medicare qualified home infusion 
suppliers (that is, DME suppliers that are enrolled as pharmacies that 
provide external infusion pumps and supplies are considered eligible 
home infusion suppliers, as are potential pharmacy suppliers that 
enroll and comply with the Medicare program's supplier standards (found 
at 42 CFR 424.57(c)) and quality standards to become accredited for 
furnishing external infusion pumps and supplies). Prior to the 
implementation of the temporary transitional payment, home infusion 
suppliers have not been separately reimbursed for providing these 
services under the DME benefit. For the temporary transitional payment 
we do not anticipate an increase in beneficiaries receiving home 
infusion therapy services as referral patterns are not likely to change 
significantly due to the inability for other provider types (for 
example, physicians, HHAs) to become home infusion therapy suppliers 
prior to CY 2021 and given that existing DME suppliers already provide 
home infusion therapy services without separate reimbursement.
c. Accreditation of Quality Home Infusion Therapy Suppliers
    The requirement for accreditation of home infusion therapy 
suppliers will cause both the home infusion therapy AOs and the home 
infusion therapy suppliers to incur costs related to the accreditation 
process. This section provides a discussion of the estimated time and 
cost burdens that home infusion therapy suppliers may incur as part of 
the accreditation process. It also discusses the estimated time and 
cost burdens that may be incurred by the home infusion therapy AOs to 
comply with the proposed home infusion therapy AO approval and 
oversight regulations at Sec. Sec.  488.1010 through 488.1050. As the 
following discussion demonstrates, we have estimated that each home 
infusion therapy AO would incur an estimated cost burden in the amount 
of $23,258 for compliance with the proposed home infusion therapy AO 
approval and oversight regulations at Sec. Sec.  488.1010 through 
488.1050.
(1) Burden Incurred by Home Infusion Therapy AOs
    Section 1834(u)(5)(B) of the Act requires the Secretary to 
designate AOs to accredit suppliers furnishing home infusion therapy 
not later than January 1, 2021. To date, we have not solicited nor 
approved any AOs to accredit home infusion therapy suppliers as 
required by section 1834(u)(5)(B) of the Act. Therefore, in this rule 
we have proposed to publish a solicitation notice in the Federal 
Register seeking national AOs to accredit home infusion therapy 
suppliers. We propose to publish this

[[Page 32483]]

solicitation after the publication of the final rule.
    The AOs that respond to the solicitation notice would be required 
to submit an application to CMS requesting CMS-approval of a home 
infusion therapy accreditation program for Medicare. If CMS approves 
the AOs application, the home infusion therapy AO would also be 
required to meet, on an ongoing basis, the requirements set forth in 
proposed Sec. Sec.  488.1010 through 488.1050. The following is a 
discussion of the burden associated with specific sections of the 
proposed home infusion therapy AO approval and oversight regulations at 
Sec. Sec.  488.1010 through 488.1050.
(a) Burden for Home Infusion Therapy AOs Associated With Proposed Sec.  
488.1010
    The AOs that accredit home infusion therapy suppliers would incur 
time and costs burdens associated with the preparation of the 
application they submit to CMS requesting approval of their home 
infusion therapy accreditation program. This would include the 
preparation, gathering or obtaining of all the documentation required 
in proposed Sec.  488.1010(a)(1) through (24).
    If the AO has never submitted an application to CMS, we estimate 
that it would take approximately 70 hours of time to gather, obtain or 
prepare all documentation required by proposed Sec.  488.1010(a)(1) 
through (23). However, for an existing AO that has previously submitted 
an application to CMS for any type of accreditation program, we 
estimate that it would take approximately 45 hours to gather, obtain or 
prepare all required documentation. We believe that it would take less 
time for an AO that has previously submitted an application to CMS to 
prepare an application requesting approval of a home infusion therapy 
accreditation program because this AO would already be familiar with 
the application process and requirements. The proposed application 
requirements for home infusion therapy AOs, set forth at Sec.  
488.1010(a)(1) through (23), are consistent with those for Medicare-
certified providers and suppliers which are set forth at Sec.  488.5.
    The home infusion therapy AO would incur costs associated with the 
preparation and submission of the home infusion therapy accreditation 
program application. The home infusion therapy AO would incur costs for 
the wages of all AO staff that work on the preparation of the 
application. We estimate that the AO would have 2 staff work on the 
preparation of the application. We believe that the AO staff that works 
on the AOs application would be clinicians such as registered nurses or 
medical or health services manager. According to the U.S. Bureau of 
Labor Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm) and the mean hourly 
wage for a medical or health services manager is $53.69 (https://www.bls.gov/oes/current/oes119111.htm)). Therefore, we estimate that 
the home infusion therapy AO would incur wages for 45 hours of time by 
a registered nurse and wages for 45 hours of time by a medical or 
health services manager in the amount of $8,014.50 (45 hours x $35.36 
per hour = $1,591.20) + (45 hours x $53.69 = $2,416.05 per hour) + 
($4,007.25 for fringe benefits and overhead).
    As stated previously, we estimate that it would take approximately 
70 hours for an AO that has never submitted an application before to 
prepare and submit their home infusion therapy accreditation program 
application to CMS. We estimate that the home infusion therapy AO would 
incur wages for 70 hours of time by a registered nurse and 70 hours of 
time by a medical or health services manager in the amount of $12,453 
(70 hours x $35.36 per hour = $2,475.20) + (70 hours x $53.59 = 
$3,751.30 + ($6,226,50 for fringe benefits and overhead).
    In addition, AOs are required to submit 2 hard copies of their 
application to CMS in notebooks with dividers and an electronic copy of 
their application on a thumb drive. Because of this requirement, the 
home infusion therapy AO would incur costs for the notebooks, dividers, 
thumb drive, photocopying, paper and ink, and postage costs for mailing 
the notebooks with the hard copies of the application to the CMS 
Central Office. We estimate that these costs would be no more than 
$250.
    At this time, there are six AOs that accredit home infusion therapy 
suppliers (that is--The Joint Commission (TJC), Accreditation 
Commission for Health Care (ACHC), The Compliance Team (TCT), Community 
Health Accreditation Partner (CHAP), Healthcare Quality Association on 
Accreditation (HQAA), and National Association of Boards of Pharmacy). 
The home infusion therapy accreditation offered by these AOs is offered 
as part of the deeming accreditation of a home health accreditation 
program and has not been approved under the requirements of section 
1834(u)(5)(A) of the Act. Therefore, we are proposing that, in order 
for the home infusion therapy suppliers accredited by these AOs to 
continue to receive payment for the home infusion therapy services 
furnished to Medicare beneficiaries, these AOs must obtain Medicare 
approval for a home infusion therapy accreditation program. If all of 
these six AOs were to submit applications to CMS for approval of a home 
infusion therapy accreditation program, the cost incurred across all of 
these potential home infusion therapy AOs for the preparation and 
submission of their applications would be $48,087 ($4,007.25 x 6 AOs = 
$24,043.50) + ($24,043.50 for fringe benefits and overhead).
    To obtain this CMS approval, we are proposing that these AOs would 
be required to submit an application to CMS seeking approval of a home 
infusion therapy accreditation program that meets the requirements set 
forth in the proposed new home infusion therapy AO approval and 
oversight regulations set forth at Sec. Sec.  488.1010.1 through 
488.1010.24 and the proposed new home infusion therapy health and 
safety regulations at 42 CFR part 466, subpart I. We have further 
proposed that the home infusion therapy accreditation programs 
submitted to CMS for approval by the existing home infusion therapy AOs 
be consistent with the requirements of section 5102 of the 21st Century 
CURES Act and section 1861(iii) of the Act. We would also require that 
the home infusion therapy programs submitted by these AOs be separate 
and distinct from the AOs home health deeming accreditation program.
    The AOs that currently provide home infusion therapy accreditation 
would incur the time and costs associated with the preparation of the 
CMS application and required supporting documentation. We estimate that 
it would take these AOs approximately 45 hours to prepare their 
applications and supporting documentation because they have previously 
submitted applications for approval of their home health accreditation 
programs. The existing AOs that accredit home infusion therapy 
suppliers would also incur costs for the wages for all AO staff 
involved with the preparation and submission of the application. The AO 
would also incur costs for printing the hard copies of the application, 
ink and paper, notebooks and dividers, and postage.
(b) Burden for Home Infusion Therapy AOs Associated With Proposed Sec.  
488.1030
    In accordance with proposed Sec.  488.1030(b) CMS would perform a 
comparability review if CMS makes

[[Page 32484]]

changes to the home infusion therapy AO approval and oversight 
regulations or home infusion therapy health and safety regulation. The 
purpose of the comparability review is to allow CMS to assess the 
equivalency of a home infusion therapy AO's accreditation standards 
with the comparable Medicare home infusion therapy accreditation 
requirements after CMS imposes new or revised Medicare home infusion 
therapy accreditation requirements.
    Proposed Sec.  488.1030(b)(1) would provide that if CMS were to 
make changes to the home infusion therapy AO approval and oversight 
accreditation regulations or the home infusion therapy health and 
safety regulations, CMS would send a written notice of the changes to 
the home infusion therapy AOs. Proposed Sec.  488.1030(b)(2) would 
provide that CMS would provide a deadline of not less than 30 day by 
which the AO must submit its revised home infusion therapy 
accreditation program standards to CMS.
    Proposed Sec.  488.1030(b)(2) would require the home infusion 
therapy AOs to revise their home infusion therapy accreditation 
standards so as to incorporate the changes made by CMS. The AO must 
submit their revised home infusion therapy accreditation program 
standards to CMS by the deadline specified in CMS' written notice. The 
AO may submit a request for an extension of the submission deadline, so 
long as the request is submitted prior to the original submission 
deadline.
    The home infusion therapy AOs would incur a time burden associated 
with the time required for the AO staff to review CMS' notice of the 
revisions to the home infusion therapy AO approval and oversight 
accreditation standards or home infusion therapy health and safety 
standards. We estimate that it would take no more than 1 hour for the 
AO to review the notice from CMS notifying the AO of the changes to the 
AO approval and oversight regulations or health and safety regulation.
    The home infusion therapy AOs would incur a cost burden for the 
wages of the AO staff that are involved with reviewing the CMS notice 
and the preparation of the home infusion therapy AO's revised 
accreditation program standards. We believe that the AO staff that 
would review the notice from CMS regarding changes to the CMS home 
infusion therapy regulations would be clinicians such as registered 
nurses. According to the U.S. Bureau of Labor Statistics, the mean 
hourly wage for a non-industry specific registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm). Therefore, the home 
infusion therapy AO would incur a cost burden in the amount of $70.72 
for the preparation of the response to CMS (1 hour x $35.36 per hour = 
$35.36) + ($35.36 for fringe benefits and overhead).
    The home infusion therapy would also incur a cost burden for the 
wages of the AO staff for the time spent preparing the AOs revised home 
infusion therapy accreditation standards. However, we are unable to 
accurately estimate this cost because the amount of wages incurred 
would be dependent on the amount of time spent by the AO staff 
preparing the AOs revised accreditation standards.
    We believe that the AO staff that would prepare the home infusion 
therapy AOs revised home infusion therapy accreditation standards would 
be a clinician such as registered nurses. According to the U.S. Bureau 
of Labor Statistics, the mean hourly wage for a non-industry specific 
registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). If we were to estimate that it would take 5 hours for 
the home infusion therapy AO to prepare the revised home infusion 
therapy accreditation standards, the estimated cost burden to the AO 
would be $353.60 (5 hours x $35.36 per hour = $176.80) + ($176.80 for 
fringe benefits and overhead).
    At this time, there are six AOs that accredit home infusion therapy 
suppliers (that is--The Joint Commission (TJC), Accreditation 
Commission for Health Care (ACHC), The Compliance Team (TCT), Community 
Health Accreditation Partner (CHAP), Healthcare Quality Association on 
Accreditation (HQAA), and National Association of Boards of Pharmacy). 
The home infusion therapy accreditation offered by these AOs is offered 
as part of the deeming accreditation of a home health accreditation 
program and has not been approved under the requirements of section 
1834(u)(5)(A) of the Act. If all of these six AOs were to submit 
applications to CMS for approval of a home infusion therapy 
accreditation program, the cost incurred across all of these AOs for 
the preparation of revised accreditation standards would be $2,121.60 
($176.80 x 6 AOs = $1,060.80) + ($1,060.80 for fringe benefits and 
overhead).
    As provided by proposed Sec.  488.1030(b)(4), a home infusion 
therapy AO may request an extension of the deadline by which they must 
submit their revised accreditation home infusion therapy standards, so 
long as the extension request is submitted prior to the submission 
deadline. If the home infusion therapy AO requested an extension of the 
submission deadline, the AO would incur burden for the time required to 
prepare and submit the deadline extension request, however, we believe 
this burden would be minimal. We believe that the extension request 
could be sent in the form of an email to CMS, would consist of no more 
than a few paragraphs and would take no more than 15 minutes to prepare 
and send.
    The AO would incur a cost burden for the wages for the AO staff who 
prepares the extension request. We believe that this email would be 
sent by an administrative assistant. According to the U.S. Bureau of 
Labor Statistics, the mean hourly wage for an executive administrative 
assistant is $28.56 (https://www.bls.gov/oes/current/oes436011.htm). We 
estimate that the AO would incur a cost burden for wages related to the 
preparation and sending of the extension request to CMS in the amount 
of $14.28. ($28.56 x 15 minutes = $7.14) + ($7.14 for fringe benefits 
and overhead).
    At this time, there are six AOs that accredit home infusion therapy 
suppliers (that is--The Joint Commission (TJC), Accreditation 
Commission for Health Care (ACHC), The Compliance Team (TCT), Community 
Health Accreditation Partner (CHAP), Healthcare Quality Association on 
Accreditation (HQAA), and National Association of Boards of Pharmacy). 
If all of these six AOs were to submit applications to CMS for approval 
of a home infusion therapy accreditation program, they could become 
CMS-approved home infusion therapy AOs. It is unlikely that all of the 
AOs would submit a request for an extension of the deadline to submit 
their revised accreditation standards to CMS. However, if this were to 
occur, the cost incurred across all of these AOs for the preparation of 
the extension requests by each home infusion therapy AO would be $85.68 
($7.14 x 6 AOs = $42.84) + ($42.84 for fringe benefits and overhead).
    Proposed Sec.  488.1030(b)(7) would provide that if CMS were to 
make significant substantial changes to the home infusion therapy AO 
approval and oversight accreditation standards or the home infusion 
therapy health and safety standards, we may require the home infusion 
therapy AOs to submit a new application for approval of their revised 
home infusion therapy accreditation programs. If this were to occur, 
the home infusion therapy AOs would incur a time burden for the time 
associated

[[Page 32485]]

the preparation of the AOs new application.
    We estimate that it would take the home infusion therapy AO 
approximately 45 hours to prepare and submit their new application to 
CMS. This would include the time and costs required to gather and 
prepare the required supporting documentation to go with the 
application. We believe that the home infusion therapy AOs would 
already be familiar with the CMS application process and would be able 
to use their previous application and supporting documentation with 
updates, therefore, the reapplication process would be less burdensome.
    The home infusion therapy AO would also incur costs associated with 
the preparation and submission of a new application. The home infusion 
therapy AO would incur costs for the wages of all AO staff that work on 
the preparation of the application. We estimate that the AO would have 
2 staff persons work on the preparation of the application. 
Furthermore, we believe that the AO staff that works on the AOs 
application would be clinicians such as a registered nurse and a 
medical or health services manager. According to the U.S. Bureau of 
Labor Statistics, the mean hourly wage for a non-industry specific 
registered nurse is $35.36 ((https://www.bls.gov/oes/current/oes291141.htm). and the mean hourly wage for a medical or health 
services manager is $53.69 ((https://www.bls.gov/oes/current/oes119111.htm). Therefore, we estimate that the home infusion therapy 
AO would incur wages for 45 hours of time by a registered nurse and 45 
hours of time by a medical or health services manager in the amount of 
$$8,014.50 (45 hours x $35.36 per hour = $1,591.20) + (45 hours x 
$53.69 = $2,416.05 per hour) + ($4,007.25 for fringe benefits and 
overhead). The cost across all the 6 potential home infusion therapy 
AOs would be $48,087 ($4007.25 x 6 AOs = $24,043.50) + ($24,043.50 for 
fringe benefits and overhead).
    In addition, AOs are required to submit 2 hard copies of their 
application to CMS in notebooks with dividers and an electronic copy of 
their application on a thumb drive. Because of this requirement, the 
home infusion therapy AO would incur costs for the notebooks, dividers, 
thumb drive, photocopying, paper and ink, and postage costs for mailing 
the notebooks with the hard copies of the application to the CMS 
Central Office. We estimate that these costs would be no more than 
$250.
    In accordance with proposed Sec.  488.1030(c), CMS will perform a 
standards review when the home infusion therapy AO makes updates to its 
accreditation standards and surveys processes. Proposed Sec.  
488.1030(c)(1) would require that when a home infusion therapy AO 
proposes to adopt new or revised accreditation standards, requirements 
or changes in its survey process, the home infusion therapy AO must 
submit its revised accreditation standards and survey processes to CMS 
for review, at least 60 days prior to the proposed implementation date 
of the revised standards. Proposed Sec.  488.1030(c)(3) would require 
that the home infusion therapy AO provide CMS with a detailed 
description of the changes that are to be made to the AO's home 
infusion therapy accreditation standards, requirements and survey 
processes and a detailed crosswalk (in table format) that states the 
exact language of the organization's revised accreditation requirements 
and the applicable Medicare requirements for each. Proposed Sec.  
488.1030(c)(4) would provide that CMS must provide a written notice to 
the home infusion therapy accrediting organization which states whether 
the home infusion therapy accreditation program, including the proposed 
revisions, continues or does not continue to meet or exceed all 
applicable Medicare home infusion therapy requirements within 60 days 
of receipt of the home infusion therapy accrediting organization's 
proposed changes. Proposed Sec.  488.1030(c)(5) would provide that if a 
home infusion therapy AO implements changes that have neither been 
determined nor deemed by CMS to be comparable to the applicable 
Medicare home infusion therapy requirements, CMS may open a home 
infusion therapy accreditation program review in accordance with 
proposed Sec.  488.1030(c)(d).
    The burden to the home infusion therapy AO associated with the 
standards review includes the time required for the home infusion 
therapy AO to prepare its revised accreditation standards and detailed 
crosswalk for submission to CMS and submit them to CMS for review. This 
burden would also include the time required for the AO staff to read 
and respond to CMS' written response. It is important to note that we 
do not include in our burden estimate the time that would be spent by 
the home infusion therapy AO in making voluntary revisions to their 
accreditation standards that are not required by CMS nor prompted by a 
regulatory change.
    The home infusion therapy AO would also incur costs for the wages 
of the AO staff involved with the preparation of the AO's revised home 
infusion therapy accreditation standards and the detailed crosswalk for 
submission to CMS. The AO would also incur costs for wages for the time 
the AO staff spent reviewing CMS' response. However, the AO could send 
their revised accreditation standards to CMS via email, therefore the 
AO would not incur costs for postage.
    We are not able to accurately estimate the total time and cost 
burden associated with the standards review because the time required 
for the home infusion therapy AO to prepare its revised home infusion 
therapy accreditation standards and detailed crosswalk would depend on 
the extent of the revision the AO has made to its home infusion therapy 
accreditation standards or survey processes. The burden would also 
depend of the content and length of CMS' response letter. However, we 
do estimate that the preparation of the home infusion therapy AOs 
revised accreditation standard and detailed crosswalk for submission to 
CMS would take no less than 5 hours.
    We believe that the AO staff that would prepare the home infusion 
therapy AOs revised home infusion therapy accreditation standards and 
detailed crosswalk for submission to CMS would be clinicians such as 
registered nurses. According to the U.S. Bureau of Labor Statistics, 
the mean hourly wage for a non-industry specific registered nurse is 
$35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, if 
we were to estimate that this task would take 5 hours to complete, the 
cost burden to the home infusion therapy would be $353.60 (5 hours x 
$35.36 per hour = $176.80) + ($176.80 for fringe benefits and 
overhead).
    We further estimate that it would take the home infusion therapy AO 
approximately 30 minutes for the home infusion therapy AO to review the 
CMS response to their submission of the revised home infusion therapy 
accreditation standards and detailed crosswalk. We believe that a 
clinician such as a registered nurse would review the CMS response 
letter. Therefore, the cost burden to the home infusion therapy AO 
associated with this task would be $ 53.04 (45 minutes x $35.36 per 
hour = $26.52) + ($26.52 for fringe benefits and overhead).
    It is important to note that we have not calculated this burden 
across all of the potential home infusion therapy AOs. We have not done 
so because the submission of revised home infusion therapy 
accreditation standards by a home infusion therapy AO would only

[[Page 32486]]

occur on an occasional basis and would never be done by all 6 potential 
AOs at the same time.
    In accordance with proposed Sec.  488.1030(d), CMS may perform a 
home infusion therapy accreditation program review if a comparability, 
performance, or standards review reveals evidence of substantial non-
compliance of a home infusion therapy AO's CMS-approved home infusion 
therapy accreditation program with the requirements of the proposed 
home infusion therapy AO approval and oversight regulation at 42 CFR 
part 488, subpart L. If a home infusion therapy accreditation program 
review is initiated, CMS will provide written notice to the home 
infusion therapy AO indicating that its CMS-approved accreditation 
program approval may be in jeopardy and that a home infusion therapy 
accreditation program review is being initiated. The notice would 
provide all of the following information:
    <bullet> A statement of the instances, rates or patterns of non-
compliance identified, as well as other related information, if 
applicable.
    <bullet> A description of the process to be followed during the 
review, including a description of the opportunities for the home 
infusion therapy accrediting organization to offer factual information 
related to CMS' findings.
    <bullet> A description of the possible actions that may be imposed 
by CMS based on the findings of the home infusion therapy accreditation 
program review.
    <bullet> The actions the home infusion therapy accrediting 
organization must take to address the identified deficiencies.
    <bullet> A timeline for implementation of the home infusion therapy 
accrediting organization's corrective action plan, not to exceed 180 
calendar days after receipt of the notice that CMS is initiating a home 
infusion therapy accreditation program review.
    Proposed Sec.  488.1030(d)(3) would provide that CMS will monitor 
the performance of the AO's home infusion therapy and the 
implementation of the corrective action plan during a probation period 
of up to 180 days. Proposed Sec.  488.1030(d)(4) would provide that if 
CMS determines, as a result of the home infusion therapy accreditation 
program review or a review of an application for renewal of the 
accrediting organizations existing CMS-approved home infusion therapy 
accreditation program, that the home infusion therapy accrediting 
organization has failed to meet any of the requirements of the proposed 
regulations at Sec. Sec.  488.1010 through 488.1050, CMS may place the 
home infusion therapy AO's CMS-approved home infusion therapy 
accreditation program on an additional probation period of up to 180 
calendar days subsequent to the period described in Sec.  
488.1030(d)(1)(iv).
    The time burden associated with the home infusion therapy 
accreditation program review includes the time burden associated with 
the AO's review of CMS' written notice which indicates that the home 
infusion therapy AO's CMS-approved accreditation program approval may 
be in jeopardy and that a home infusion therapy accreditation program 
review is being initiated. The time required for the review of the CMS 
letter will depend on the length of CMS' finding. However, we estimate 
it would take no more than 60 minutes to review this letter.
    The AO would incur costs for the wages of the AO staff who performs 
the review of the CMS letter. We believe that an AO staff person with a 
clinical background such as a registered nurse would review the CMS 
letter. According to the U.S. Bureau of Labor Statistics, the mean 
hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, we estimate that the cost burden to 
the home infusion therapy AO associated with the review of the CMS 
letter would be approximately $70.72 (1 hour x $35.36 = $35.36) + 
($35.36 for fringe benefits and overhead).
    There is further burden associated with the requirement that the AO 
prepare and submit a written response to the CMS letter and a 
corrective action plan. However, we are unable to accurately estimate 
the time burden associated with this task because the amount of time 
required for the home infusion therapy AO to prepare the response 
letter and corrective plan would be dependent on the number and type of 
findings identified in CMS' letter.
    However, we believe that an AO staff person with a clinical 
background such as a registered nurse would prepare the home infusion 
therapy AO's written response to the CMS letter and a corrective action 
plan. According to the U.S. Bureau of Labor Statistics, the mean hourly 
wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). If we were to estimate that it would take the home 
infusion therapy AO 3 hours to prepare and submit a written response to 
the CMS letter and a corrective action plan, the estimated cost burden 
to the home infusion therapy AO associated with this task would be 
$212.16 (3 hours x $35.36 = $106.08) + ($106.08 for fringe benefits and 
overhead). Proposed Sec.  488.1030(d)(2) provides that CMS would review 
and approve the AO's plan of correction within 30 days of receipt. If 
CMS requires the home infusion therapy AO to make changes to their 
corrective action plan as a condition of approval, the AO would incur 
burden for the time required to make the required revisions to their 
plan of correction and resubmit it to CMS.
    The home infusion therapy AO would incur a time burden for the time 
spent by the AO staff making corrections to the AOs corrective action 
plan. We are unable to accurately estimate how long it would take for 
the AO to revise its corrective action plan because the revision to be 
made to the corrective action plan would be dependent on the extent of 
the correction requested by CMS.
    However, we believe that an AO staff person with a clinical 
background such as a registered nurse would make the corrections to the 
AOs corrective action plan. According to the U.S. Bureau of Labor 
Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm). So, if we were to 
estimate that it would take the home infusion therapy AO 2 hours to 
prepare and submit a written response to the CMS letter and make any 
necessary revision to the corrective action plan, the estimated cost 
burden to the home infusion therapy AO associated with this task would 
be $141.44 (2 hours x $35.36 per hour = $70.72) + ($70.72 for fringe 
benefits and overhead). During the 180 day probationary period, CMS is 
likely to require the home infusion therapy AO to submit periodic 
progress reports and participate in periodic telephone to monitor the 
home infusion therapy AOs progress. The home infusion therapy AO would 
incur burden for the time required to prepare and submit an initial 
progress report. We estimate that the initial progress report would 
take approximately one hour to prepare. We further estimate that the 
burden associated with the preparation and submission of subsequent 
progress reports would be less than that for the initial progress 
report because the AO would be able to modify or update their initial 
or previous progress report. We estimate that it would take 
approximately 1 hour for the AO staff to prepare the initial progress 
report and 30 minutes for the AO staff to prepare subsequent progress 
reports. If CMS were to require the AO to submit one progress report 
per month during the entire 180 day probation period (6 months), the AO 
would have

[[Page 32487]]

to submit 1 initial progress report and 5 subsequent progress reports. 
Therefore, we estimate that the AO would incur a time burden in the 
amount of 3.5 hours for the submission of all progress reports during 
the 180 day probation period. The AO would also incur a cost burden for 
the wages of the AO staff person who is involved in the preparation and 
submission of the progress reports. We believe that the initial and 
subsequent progress reports would be prepared by person with a clinical 
background such as a registered nurse. According to the U.S. Bureau of 
Labor Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm). We estimate that the 
home infusion therapy AO would incur a cost burden in the amount of 
$247.52 for the preparation of the progress reports during the 180 day 
probation period ($3.5 hours x 35.36 per hour = $123.76) + ($123.76 for 
fringe benefits and overhead).
    The home infusion therapy AO would also incur burden associated 
with the time required to participate in the periodic phone calls with 
CMS. We are not able to accurately estimate the amount of time that 
would be required for these periodic phone calls because we do not know 
how often the AO would be required to participate in phone calls with 
CMS or how long these phone calls would last. However, we do not 
believe that these phone calls would be held more often that monthly or 
last more than one hour. The AO would incur costs for the wages of all 
AO staff that participate in the periodic telephone calls. We are not 
able to accurately estimate the total cost burden for wages that would 
be incurred by the home infusion therapy AO at this time, because we do 
not know who from the AO would be attending these meetings.
    If we were to estimate that these phone calls were to be held on a 
monthly basis during the 180 day probation period for a period of one 
hour period per call, the home infusion therapy AO would incur a time 
burden in the amount of 6 hours per each staff member that participates 
in these phone calls. We believe that the AO would have a minimum of 3 
staff that are clinicians, such as registered nurses, participate on 
the call. According to the U.S. Bureau of Labor Statistics, the mean 
hourly wage for a registered nurse is $35.36 (https://www.bls.gov/ooh/healthcare/registered-nurses.htm). Therefore, the cost burden to the 
home infusion therapy AO for participation in the monthly telephone 
calls would be $1,272.96 ((3 AO staff x $35.36 per hour = $106.08 per 
call per all staff/$106.08 per call per all staff x 6 calls = $636.48 
total wages per all staff per all calls) + ($636.48 for fringe benefits 
and overhead)).
    At or near the end of the first 180 day probationary period, CMS 
will make a decision as to whether the home infusion therapy AO has 
successfully come into compliance with the home infusion therapy 
regulations, or whether the AO has failed to do so. Proposed Sec.  
488.1030(d)(4) would provide that if CMS finds that the home infusion 
therapy AO has failed to properly implement the plan of correction and 
come into compliance with the requirements of the proposed home 
infusion therapy AO approval and oversight regulation or the proposed 
home infusion therapy health and safety regulations, CMS may place the 
home infusion therapy AO's on an additional probation period of up to 
180 calendar days. If this were to occur, the AO would incur the same 
or similar time and cost burdens as in the initial 180 day probationary 
period. (See previous estimates for the estimated time and cost burden 
associated with the 180-day probationary period).
    It is important to note that we have not calculated the burden 
associated with the tasks required of the home infusion therapy AO 
under Sec.  488.1030(d) across all of the potential home infusion 
therapy AOs. We have not done so because the act of CMS placing a home 
infusion therapy AO on an accreditation program review would only occur 
on a sporadic and as needed basis. There would never be a situation in 
which all 6 potential AOs would be under an accreditation program 
review at the same time.
(c) Burden for Home Infusion Therapy AOs Associated With Proposed Sec.  
488.1035
    Proposed Sec.  488.1035 titled ``Ongoing responsibilities of a CMS-
approved home infusion therapy accrediting organization'' would require 
that the home infusion therapy AO carry out certain activities and 
submit certain documents to CMS on an ongoing basis. Proposed Sec.  
488.1035(a) would require the home infusion therapy AO to submit the 
following documents to CMS: (1) Copies of all home infusion therapy 
accreditation surveys, together with any survey-related information 
that CMS may require (including corrective action plans and summaries 
of findings with respect to unmet CMS requirements); (2) notice of all 
accreditation decisions; (3) notice of all complaints related to 
providers or suppliers; (4) information about all home infusion therapy 
accredited suppliers against which the home infusion therapy 
accreditation organization has taken remedial or adverse action, 
including revocation, withdrawal, or revision of the providers or 
suppliers accreditation; (5) the home infusion therapy accrediting 
organization must provide, on an annual basis, summary data specified 
by CMS that relate to the past year's accreditation activities and 
trends; (6) notice of any proposed changes in the home infusion therapy 
accrediting organization's accreditation standards or requirements or 
survey process.
    We believe that there would be little burden associated with this 
requirements for several reasons. First, while the home infusion 
therapy AOs would be required to provide copies of all survey reports 
and any survey-related information that CMS may require, the AOs would 
only be required to provide this information upon request. CMS may not 
request the home infusion therapy AO to submit this information if 
there are no compliance concerns. Second, we believe the home infusion 
therapy AO would keep these records in the normal course of their 
business as a home infusion therapy AO and would store the survey 
records in electronic format. As the AO already has this information 
prepared and stored in an electronic format, it would place little if 
any burden on the home infusion therapy AO to provide this information 
to CMS. We believe that the AO could send this information to CMS via 
email and attach the survey record electronic files to the email.
    We estimate that it would take approximately 30 minutes to locate 
the required survey information files and approximately 15 minutes for 
the AO staff to prepare an email to CMS and attach the electronic files 
to the email. We believe that the person at the AO that would prepare 
the email sending the survey information to CMS would most likely be a 
clinician such as a registered nurse. According to the U.S. Bureau of 
Labor Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/ooh/healthcare/registered-nurses.htm). Therefore, 
the cost burden to the home infusion therapy AO associated with the 
preparation and submission of the survey reports and information to CMS 
would be $53.04 (30 minutes to locate information requested by CMS x 
$35.36 per hour = $17.68) + (15 minutes x $35.36 = $8.84) + ($26.52 for 
fringe benefits and overhead). The estimated cost across the potential 
6 home infusion therapy AOs for these tasks would be $318.24 ($53.04 x 
6 home infusion therapy AOs = $318.24).

[[Page 32488]]

    Proposed Sec.  488.1035(a)(2) would require the home infusion 
therapy AO to provide CMS with notice of all accreditation decisions 
made for each home infusion therapy supplier that files an application 
for accreditation. This would consist of a list of each home infusion 
therapy supplier that had filed an application with the home infusion 
therapy AO for accreditation and the accreditation decision made by the 
AO.
    We believe that these accreditation decisions would be made by the 
AO in the normal course of the AOs business of performing accreditation 
of home infusion therapy suppliers. We further believe that there would 
be little burden associated with the requirement that the AO provide 
CMS with a list of the accreditation decisions made by the AO as this 
is information that would be readily available to the AO and that could 
quickly and easily be provided to CMS via email. We estimate that it 
would take approximately 15 minutes for the home infusion AO to gather 
the required accreditation decision information in preparation for 
sending it to CMS.
    We believe that this information can be sent to CMS via email and 
estimate that it would take an additional 15 minutes for the AO staff 
to prepare an email to CMS and attach the electronic files containing 
the accreditation decision information to the email. We believe that 
the person at the AO who would prepare the accreditation decision 
information and prepare the email to CMS would most likely be a 
clinician such as a registered nurse. According to the U.S. Bureau of 
Labor Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm). Therefore, the 
estimated cost burden to the home infusion therapy AO associated with 
the preparation and submission of the survey reports and information to 
CMS would be $35.36 (15 minutes x $35.36 per hour = $8.84) and (15 
minutes x $35.36 = $8.84) + ($17.68 for fringe benefits and overhead). 
The estimated cost across the potential 6 home infusion therapy AOs for 
these tasks would be $212.16 ($35.36 x 6 home infusion therapy AOs = 
$212.16).
    Section 488.1035(a)(3) would require the AO to report complaint 
information to CMS. Complaint information is typically reported to CMS 
by other AOs by email on a monthly basis for the previous month. The 
contents of the complaint information reported to CMS would depend on 
whether the AO had received any complaints during the previous month. 
For example, if the AO received no complaint during the previous month, 
this email could consist of a sentence stating that the AO had received 
no complaints. If the AO had received one or more complaints during the 
previous month, the AO would be required to provide information about 
the nature of each complaint, a description of the investigation 
performed, a description of how the complaint was resolved and the date 
resolved.
    We believe that there would be little burden associated with the 
reporting of complaint information by the home infusion therapy AO to 
CMS for several reasons. First, we estimate that the home infusion 
therapy AOs will rarely receive complaints about their accredited home 
infusion therapy suppliers. Second, we believe that the home infusion 
therapy AO will store information about any complaints received in an 
electronic format. Therefore, complaint information can be reported by 
the home infusion therapy AO to CMS via email. We estimate that the 
preparation of the complaint information email would take only no more 
than 15 minutes to prepare and send.
    We believe that the person at the AO who would prepare the 
complaint information email and sent it to CMS would most likely be a 
clinician such as a registered nurse. According to the U.S. Bureau of 
Labor Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm) Therefore, the 
estimated monthly cost burden to the home infusion therapy AO 
associated with the submission of complaint information to CMS would be 
$17.68 (15 minutes x $35.36 per hour = $8.84) + ($8.84 for fringe 
benefits and overhead). The estimated yearly burden to the home 
infusion therapy AO for this task would be $212.16 ($17.68 per month x 
12 months per year = $212.16 per year).
    The estimated monthly cost across the potential 6 home infusion 
therapy AOs for these tasks would be $106.08 ($17.68 x 6 home infusion 
therapy AOs = $106.08). The estimated yearly cost across the 6 
potential home infusion therapy AOs would be $1,272.96 ($17.68 x 6 AOs 
= $106.08 per all AOs per month/$106.08 per year x 12 months per year = 
$1,272.96. Proposed Sec.  488.1035(a)(4) would require the AO to 
provide CMS with information about all home infusion therapy accredited 
suppliers against which the home infusion therapy AO has taken remedial 
or adverse action, including revocation, withdrawal, or revision of the 
providers or suppliers accreditation. The information to be sent to CMS 
would simply consist of a list of the home infusion therapy suppliers 
and the type of remedial or adverse action taken.
    We expect that when a home infusion therapy AO takes remedial or 
adverse action against its accredited supplier, the AO would prepare 
documentation which states the action taken and the reason this action 
was taken. We further believe that the AO would store this information 
electronically. This would enable the AO to send the required 
information to CMS via email. Therefore, we believe that there would be 
little burden associated with this requirement.
    We believe that the home infusion therapy AOs could send 
information about adverse or remedial actions they have taken against 
their accredited suppliers via email. We estimate that it would take 
approximately 30 minutes for a home infusion therapy AO to prepare a 
report about the adverse or remedial actions taken against its 
accredited suppliers and approximately 15 minutes to prepare an email 
to CMS, attach the electronic file with the required information and 
send it to CMS. The home infusion therapy AOs would be required to 
report this information to CMS on a monthly basis.
    The AO would incur a cost burden for the wages of the AO staff for 
the time spent preparing the report of the adverse or remedial action 
taken against the AO's accredited home infusion therapy suppliers and 
the time spent preparing the email to CMS. We believe that the person 
at the AO who would prepare the report of adverse or remedial action 
taken and prepare the email to CMS would most likely be a clinician 
such as a registered nurse. According to the U.S. Bureau of Labor 
Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm). Therefore, the 
estimated cost monthly cost burden to the home infusion therapy AO 
associated with the submission of information about the adverse or 
remedial action taken by the home infusion therapy AO against its 
accredited home infusion therapy suppliers to CMS would be $53.04 (30 
minutes x $35.36 per hour = $17.68 + (15 minutes x $35.36 per hour = 
$8.84) + ($26.52 for fringe benefits and overhead). The estimated 
yearly cost burden to the home infusion therapy AO for this task would 
be $636.48 ($53.04 per month x 12 months per year = $636.48 per year).
    The estimated monthly cost across the potential 6 home infusion 
therapy AOs for these tasks would be $318.24 ($53.04 x 6 home infusion 
therapy AOs =

[[Page 32489]]

$318.24). The estimated yearly cost across the 6 potential home 
infusion therapy AOs would be $3,818.88 ($53.04 x 6 AOs = $318.24 per 
all AOs per month/$318.24 per year x 12 months per year = $3,818.88.
    Proposed Sec.  488.1035(a)(5) would require the home infusion 
therapy accrediting organization to provide, on an annual basis, 
summary data specified by CMS that relates to the past year's 
accreditation activities and trends. This summary data might include 
information such as the total number of complaints received during the 
year, the total number of immediate jeopardy situations found during 
the year, and the total number of deficiencies cited. We believe this 
is information that the AO would collect and document throughout the 
year in the normal course of business. We further believe that the home 
infusion therapy AO would prepare this year end summary data for their 
own informational, quality improvement, and research purposes.
    We believe that there would be little, if any time burden 
associated with the submission of the documents and information 
required by proposed Sec.  488.1035(a)(5) by the home infusion therapy 
AOs to CMS, because these are documents which the AO would keep in the 
normal course of business, therefore these documents would be easily 
accessible to the home infusion therapy AO. Title 5 CFR 1320.3(b)(2) 
states that the time, effort, and financial resources necessary to 
comply with a collection of information that would be incurred in the 
normal course of their activities (for example in compiling and 
maintaining business records) will be excluded from the burden if the 
agency demonstrates that the reporting, recordkeeping, or disclosure 
activities needed to comply are usual and customary. Further, we 
believe that most, if not all of the home infusion therapy AOs would 
store these documents electronically and would be able to send them 
electronically to CMS via email.
    The home infusion therapy AO would incur a time burden for the 
preparation and submission of the annual summary data to CMS. We 
estimate that it would take approximately 60 minutes for the home 
infusion therapy AO to locate the required annual summary data 
information and prepare it for submission to CMS. We further estimate 
that it would take an additional 15 minutes to prepare an email to CMS 
and attach the electronic files containing the summary data.
    The home infusion therapy AO would incur a cost burden for the 
wages of the AO staff who prepares that summary data for submission to 
CMS and prepares the email to in which the annual summary data are 
submitted to CMS. We believe that the person at the AO who would 
prepare the summary data for submission to CMS and also prepare the 
email to CMS would most likely be a clinician such as a registered 
nurse. According to the U.S. Bureau of Labor Statistics, the mean 
hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the 
home infusion therapy AO associated with the submission of summary data 
to CMS would be $88.40 (60 minutes x $35.36 per hour = $35.36) + (15 
minutes x $35.36 per hour = $8.84) + ($44.20 for fringe benefits and 
overhead). The estimate cost burden across the 6 potential home 
infusion therapy AOs for this task would be $530.40 ($88.40 x 6 
potential home infusion therapy AOs = $530.40).
    Proposed Sec.  488.1035(b) would require that within 30 calendar 
days after a change in CMS requirements, the home infusion therapy 
accrediting organization must submit an acknowledgment of receipt of 
CMS' notification to CMS. The time burden associated with this 
requirement would be the time required for an AO staff person to review 
the notification from CMS about the change in home infusion therapy 
accreditation program requirements and the time required for the AO 
staff person to compose and send an acknowledgement email to CMS.
    We estimate the time required for the AO staff to review the notice 
of a change in CMS requirements would be 1 hour. We further estimate 
that the time that would be required to prepare and submit the 
acknowledgement of receipt of the CMS notice would be approximately 15 
minutes because this notice could be sent to CMS via email and would 
only consist of 1-2 paragraphs.
    The home infusion therapy AO would incur a cost burden for the 
wages of the staff for the time required to review the notice from CMS 
of the change in CMS requirements. The home infusion therapy AO would 
incur a cost burden for the wages of the staff for the time required to 
prepare the acknowledgement and submits it to CMS. We believe that the 
person at the AO who would prepare the email to CMS acknowledging 
receipt of the CMS notice would most likely be a clinician such as a 
registered nurse. According to the U.S. Bureau of Labor Statistics, the 
mean hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm).
    The estimated cost burden to the home infusion therapy AO 
associated with the review of the notice from CMS of changes to the CMS 
requirements would be $70.72 (1 hour x $35.36 per hour) + ($35.36 for 
fringe benefits and overhead). The estimated cost burden associated 
with the preparation and submission of the acknowledgement by the home 
infusion therapy AO would be $17.68 (15 minutes x $35.36 per hour = 
$8.84) + ($8.84 for fringe benefits and overhead). The estimates cost 
across the 6 potential home infusion therapy AOs would be $530.40 
($70.72 x 6 = $424.32) + ($17.68 x 6 = $106.08).
    It is important to note that the home infusion therapy AOs would 
only have to perform these tasks if CMS were to make a change to the 
home infusion therapy standards. We believe that this would occur on an 
infrequent basis, therefore, the home infusion therapy AOs would incur 
these time and cost burdens on an infrequent basis.
    Proposed Sec.  488.1035(c) would require that the home infusion 
therapy AO permit its surveyors to serve as witnesses if CMS takes an 
adverse action based on accreditation findings. An example in which a 
surveyor would be needed to testify as a witness would be if there was 
litigation about CMS' termination of a home infusion therapy supplier's 
participation in the Medicare program and the surveyor that had 
performed a survey of that home infusion therapy supplier was needed to 
testify about the survey findings. The burden associated with this 
requirement would be the time the surveyor spent providing testimony, 
any travel expenses the home infusion therapy AO would be responsible 
to pay, and the wages paid to the surveyor during the time spent giving 
testimony.
    The home infusion therapy AO would incur a time burden for the time 
required for the AO's surveyor to serve as a witness. This would 
include travel time to and from the location where the hearing is being 
held. The AO would also incur cost burdens for the wages paid to the 
surveyor during the time they are serving as a witness and also for any 
travel expenses the AO may be required to pay, that are not reimbursed.
    It is important to note that the home infusion therapy AO surveyors 
would rarely, if ever, be required to act as a witness. Therefore, this 
is a burden that the home infusion therapy AOs would not be likely to 
incur.
    Proposed Sec.  488.1035(d) would require that, within 2 business 
days of identifying a deficiency of an accredited home infusion therapy 
supplier that poses immediate jeopardy to a beneficiary or to the 
general public, the

[[Page 32490]]

home infusion therapy AO must provide CMS with written notice of the 
deficiency and any adverse action implemented by the AO. The burden 
associated with this requirement is the time required to provide notice 
to CMS of the immediate jeopardy situation and the wages for the AO 
staff person for the time spent preparing and submitting this notice.
    We believe that the AO would keep this information in the normal 
course of their business of providing home infusion therapy 
accreditation. Therefore, the AO should have these readily available. 
We further believe that the home infusion therapy AOs would keep 
records related to immediate jeopardy findings in an electronic format.
    The AO would incur a time burden for the time required to report 
the immediate jeopardy information to CMS. We estimate that it would 
take the AO no more than 20 minutes to prepare an email to CMS in which 
they provide the required information about the immediate jeopardy 
situation that has been discovered. The AO can attach electronic files 
to the email that contain the required information. It is important to 
note that we do not count, as a burden, the time spent by the home 
infusion therapy AO in finding the immediate jeopardy situation or 
resolving it, because it is the duty of any CMS-approved AO to monitor 
it's accredited providers or supplier to ensure they are providing care 
that meets the accreditation standards and that they do not have any 
situation that put the patients or general public in imminent danger of 
harm. The home infusion therapy AO would incur a cost burden for the 
wages of the AO staff that prepares the email to CMS which notified CMS 
of the immediate jeopardy situation. We believe that the person at the 
AO who would prepare the immediate jeopardy notification email to CMS 
would most likely be a clinician such as a registered nurse. According 
to the U.S. Bureau of Labor Statistics, the mean hourly wage for a 
registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the home 
infusion therapy AO associated with the preparation and submission of 
the acknowledgement by the home infusion therapy AO would be $23.60 
($35.36 divided by 60 minutes per hour = $0.59 per minute/20 minutes x 
$0.59 per minute = $11.80) + ($11.80 for fringe benefits and overhead).
    The home infusion therapy AOs would have to perform these tasks and 
incur these time and costs burdens only if they discover an immediate 
jeopardy situation with an accredited home infusion therapy supplier. 
We would like to point out that this would not be a regular time and 
cost burden that would be incurred by the home infusion therapy AOs, as 
the discovery of immediate jeopardy situations by AOs do not occur 
frequently.
    It is important to note that we have not calculated the burden 
associated with the tasks required of the home infusion therapy AO 
under Sec.  488.1035(d) across all of the potential home infusion 
therapy AOs. We have not done so because the need for a home infusion 
therapy AO to report an immediate jeopardy situation to CMS would only 
occur on a sporadic basis. We do not believe that there would ever be a 
situation in which all 6 potential AOs would be required to report an 
immediate jeopardy situation simultaneously. Proposed Sec.  488.1035(e) 
would require that within 10 calendar days after CMS' notice to a CMS-
approved home infusion therapy AO that CMS intends to withdraw approval 
of the AO's home infusion therapy accreditation program, the home 
infusion therapy AO must provide written notice of the withdrawal to 
all of the home infusion therapy AO's accredited suppliers. The time 
burden associated with this requirement would be the time spent by the 
AO staff to prepare the required notice that must be sent to all of the 
AOs accredited home infusion therapy suppliers and the time required 
for the AO to send this notice out to all of its accredited suppliers.
    We estimate that it would take that home infusion therapy AO 
approximately 45 minutes to prepare the notice that they must send out 
to their accredited suppliers. We believe it would take an additional 2 
minutes per letter to be sent by the home infusion therapy AO to its 
accredited suppliers to prepare these letters for mailing (that is--
fold letter, place in envelope, affix correct amount of postage and 
place the letter into the outgoing mail). We are not able to accurately 
estimate the amount of time it would take for the AO to send this 
notice out to all of its accredited suppliers because this would be 
dependent on the number of accredited suppliers the AO has at the time. 
However, if were to assume that a home infusion therapy AO had 50 
accredited home infusion therapy suppliers, this task would take the AO 
staff 1.7 hours to complete (2 minutes x 50 letters = 100 minutes/100 
minutes divided by 60 minutes per hour = 1.7 hours).
    The home infusion therapy AO would incur a cost burden for the 
wages of the AO staff person that prepares the required notification. 
We believe that the person at the AO who would prepare the required 
notification would most likely be a clinician such as a registered 
nurse. According to the U.S. Bureau of Labor Statistics, the mean 
hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the 
home infusion therapy AO associated with the preparation of the 
required notice which is to be sent to all of the AO's accredited 
suppliers would be $53.04 (45 minutes x $35.36 per hour = $26.52) + 
($26.52 for fringe benefits and overhead)
    The home infusion therapy would also incur a cost burden for the 
wages of the staff person for the time spent preparing the required 
notices for mailing and mailing them. We are unable to accurately 
estimate this cost burden because the time required to perform this 
task would be dependent on the number of accredited home infusion 
therapy supplier the AO has at the time. However, if were to assume 
that a home infusion therapy AO had 50 accredited home infusion therapy 
suppliers, this task would take the AO staff 1.7 hours to complete (2 
minutes x 50 letters = 100 minutes/100 minutes divided by 60 minutes 
per hour = 1.7 hours). We believe that the person that would perform 
this task would be an Administrative Assistant. According to the U.S. 
Bureau of Labor Statistics, the mean hourly wage for an executive 
administrative Assistant is $28.56 (https://www.bls.gov/oes/current/oes436011.htm). Therefore, the home infusion therapy AO would incur a 
cost burden in the amount of $97.92 for the completion of this task 
($28.56 per hour divided by 60 minutes per hour = $0.48 per minute/60 
minutes per hour divided by 10 = 6 minutes per 0.1 hour/6 minutes x 7 = 
42 minutes = 0.7 hour/60 minutes + 42 minutes = 102 minutes or 1.7 
hours/$0.48 per minute x 102 minutes = $48.96) + ($48.96 for fringe 
benefits and overhead). The home infusion therapy AO would incur an 
additional cost burden for miscellaneous costs. These costs would 
include the cost of the paper used to print the notices on, the printer 
ink used, the cost of the envelopes used, and the postage required to 
mail all the notices. We are unable to accurately estimate these costs 
as they are dependent on the number of notices that would be sent. We 
believe that these costs would not exceed $250.
    It is important to note that the home infusion therapy AO surveyors 
would rarely, if ever, be required to perform the tasks required by 
proposed Sec.  488.1035(e) because we would rarely withdraw the CMS 
approval of a home

[[Page 32491]]

infusion therapy AO. We would do so if there were serious, unresolved 
compliance concerns that the AO was unable or unwilling to rectify, 
even after being placed on an accreditation program probationary 
period. We do not believe that it would be possible that all of the 
home infusion therapy AOs would incur these cost and time burdens at 
the same time.
(d) Burden for Home Infusion Therapy AOs Related to Proposed Sec.  
488.1040
    Proposed Sec.  488.1040 would require that as part of the 
application review process, the ongoing review process, or the 
continuing oversight of an home infusion therapy AO's performance, CMS 
may conduct onsite inspections of the home infusion therapy AO's 
operations and offices at any time to verify the home infusion therapy 
AO's representations and to assess the home infusion therapy AO's 
compliance with its own policies and procedures. Proposed Sec.  
488.1040(b) provides that the activities to be performed by CMS staff 
during the onsite inspections may include, but are not limited to the 
following: (1) Interviews with various AO staff; (2) review of 
documents, survey files, audit tools, and related records; (3) 
observation of meetings concerning the home infusion therapy 
accreditation process; (4) auditing meetings concerning the 
accreditation process; (5) observation of in-progress surveys and 
audits; and (6) evaluation of the AO's survey results and accreditation 
decision-making process.
    We believe that there would be little burden associated with the 
onsite visits made by CMS to the home infusion therapy AO's operations 
and offices because most of the activities related to the onsite visit 
involve work performed by the CMS staff, which would not impose burden 
on the AO staff (such as review of records or observation of meeting 
held at the AOs offices). We estimate that the time burden to the home 
infusion therapy AO associated with these onsite visits would include 
the time required for the AO staff to greet the CMS team upon arrival 
and show them to the conference room, the time required to locate the 
records the CMS team requests for review, and the time required for CMS 
to conduct interviews of AO staff members. If the home infusion therapy 
AOs records are electronic, an AO staff member may need to remain with 
the CMS team during their record review to assist them with access to 
the AO's records.
    We are not able to accurately estimate the total time that would be 
required for these activities because we have not yet accredited any 
home infusion therapy AOs, nor have we had an opportunity to perform an 
onsite visit to a home infusion therapy AO. We do not yet know what 
type of accreditation standards and surveys processes the home infusion 
therapy AOs would use. Also, we do not know the amount and type of 
records we would seek to review during an onsite visit to a home 
infusion therapy AO or approximately how much time we would need to 
review these records. Likewise, we do not yet know how much interaction 
we would need to have with the home infusion therapy AO staff or which 
AO staff members we would choose to interview. The onsite AO visits we 
have performed for other types of AOs have lasted 1 to 2 days depending 
on the type of AO.
    However, if we estimate that it would take 1 hour for the CMS team 
entrance conference, 8 hours for the CMS team to perform their records 
review and 1 hour for the CMS team conduct the exit conference, the 
home infusion therapy AO would incur a time burden in the amount of 1 
hour for each AO staff person that attends the entrance conference, 8 
hours for any staff that remains with the CMS team to assist them with 
the record review and 1 hour of time for each AO staff person that 
attends the exit conference. We believe that the AO staff that would be 
attending the entrance and exit conferences and assisting the CMS staff 
with their records review would most likely be clinicians such as 
registered nurses. According to the U.S. Bureau of Labor Statistics, 
the mean hourly wage for a non-industry specific registered nurse is 
$35.36 (https://www.bls.gov/oes/current/oes291141.htm). We estimate 
that approximately 4 AO staff persons would attend the entrance and 
exit conferences and that one AO staff person would assist the CMS team 
with their record review.
    Based on the a previously stated time estimate, we estimate that 
the home infusion therapy AO would incur a cost burden in the amount of 
$282.88 for wages for four AO staff for attendance at the entrance 
conference. ($35.36 per hour per each AO staff x 1 hour = $35.36/$35.36 
per hour x 4 AO staff = $141.44) + ($141.44 for fringe benefits and 
overhead).
    We further estimate that the AO would incur a cost burden in the 
amount of $282.88 for the wages of the four AO staff for attendance at 
the exit conference. ($35.36 per hour per each AO staff x 1 hour = 
$35.36/$35.36 per hour x 4 AO staff = $141.44) + ($141.44 for fringe 
benefits and overhead).
    We also estimate that the AO would incur a cost burden in the 
amount of $565.76 for the wages of the AO staff person that would 
remain with the CMS team to assist them with their record review. (8 
hours x $35.36 = $282.88) + ($282.88 for fringe benefits and overhead).
    The total estimated cost burden to the home infusion therapy AO 
associated with the CMS onsite visit is $1,131.52 ($282.88 for entrance 
conference + $282.88 for exit conference + $565.76 for assisting CMS 
staff with record review = $1,131.52). The estimated cost burden across 
all of the potential six home infusion therapy AOs would be $6,789.12.
    In this proposed rule, we have proposed that the six AOs that 
currently provide accreditation to home infusion therapy suppliers must 
submit an application to CMS for approval of a separate and distinct 
home infusion therapy accreditation program. A corporate onsite visit 
to the home infusion therapy AOs office is a part of the application 
review and approval process. Therefore, each of the AOs that submit an 
application to CMS for approval of a home infusion therapy program 
would incur the previously stated estimated burden related to the 
corporate onsite visit. However, after the initial application process 
has been completed, CMS would only make additional corporate onsite 
visits every 6 years when the home infusion therapy AOs submit their 
renewal application. Therefore, this would not be is a frequent or 
ongoing burden incurred by the home infusion therapy AOs.
(e) Burden for Home Infusion Therapy AOs Related to Proposed Sec.  
488.1045
    Proposed Sec.  488.1045 contains regulations related to the 
voluntary and involuntary termination of the CMS approval of a home 
infusion therapy AO's home infusion therapy accreditation program. 
Proposed Sec.  488.1045(a) would provide that a home infusion therapy 
accrediting organization that decides to voluntarily terminate its CMS-
approved home infusion therapy accreditation program must provide 
written notice at least 90 days in advance of the effective date of the 
termination to CMS and each of its accredited home infusion therapy 
suppliers.
    The requirement that the home infusion therapy AO provide notice of 
its decision to voluntarily terminate its CMS approved home infusion 
therapy accreditation program to CMS and all of its accredited home 
infusion therapy suppliers would cause the AO to incur the following 
time burdens: (1) The time required to prepare and send the required 
notice to CMS; and (2) the time required to prepare and send the

[[Page 32492]]

required notice to all of the AOs accredited home infusion therapy 
suppliers. We would require that the AO send the required notice of 
their decision to voluntarily terminate its CMS-approved accreditation 
program to CMS by U.S. mail. We would also require the AO to send the 
required notice to all of its accredited home infusion therapy 
suppliers by U.S. mail. We estimate that it would take approximately 60 
minutes for the AO staff person to prepare the letter to CMS in which 
the AO notified CMS that the AO wishes to voluntarily terminate its 
CMS-approved home infusion therapy accreditation program, print the 
letter and mail it.
    We further estimate that it would take the AO staff person another 
4 hours to perform the following tasks: (1) Draft a letter its 
accredited home infusion therapy suppliers, giving notice that the AO 
is voluntarily terminating its CMS approved home infusion therapy 
accreditation program; (2) perform a mail merge to prepare a copy of 
the letter addressed to each accredited home infusion therapy supplier; 
(3) print out a letter to each accredited supplier and envelope; put 
the letters into the envelopes; (4) affix the correct amount of 
postage; and (5) put the envelopes in the outgoing mail. We believe 
that the person at the AO who would perform these tasks would most 
likely be a clinician such as a registered nurse. According to the U.S. 
Bureau of Labor Statistics, the mean hourly wage for a registered nurse 
is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, 
the estimated cost burden to the home infusion therapy AO associated 
with the preparation of the required notice which is to be sent to all 
of the AO's accredited suppliers would be $35.36 (60 minutes x $35.36 
per hour = $35.36).
    The home infusion therapy AO would also incur a cost burden for the 
wages of the staff person for the time spent preparing and mailing the 
required notices to be sent to the AO's accredited home infusion 
therapy suppliers. As stated previously, we estimate that it would take 
approximately 4 hours of time for an AO staff person to prepare the 
required notification letter to the AOs accredited providers, print out 
a copy of the letter for each accredited home infusion therapy supplier 
and put these letters into the mail. We believe that the person at the 
AO who would perform these tasks would most likely be a clinician such 
as a registered nurse. According to the U.S. Bureau of Labor 
Statistics, the mean hourly wage for a registered nurse is $35.36 
(https://www.bls.gov/oes/current/oes291141.htm). Therefore, the 
estimated cost burden to the home infusion therapy AO associated with 
the preparation of the required notice for mailing would be $353.60 (4 
hours x $35.36 per hour = $176.80) + ($176.80 for fringe benefits and 
overhead).
    The home infusion therapy AO would incur an additional burden for 
miscellaneous costs associated with the preparation of the required 
notices to be sent to CMS and the AOs accredited home infusion therapy 
suppliers, including the cost of the paper on which the notices are 
printed, the printer ink used, the cost of the envelopes used, and the 
postage required to mail all of the notices. We are unable to 
accurately estimate these costs as they are dependent on the number of 
notices that would need to be sent. However we believe these costs 
would not exceed $200. We seek comment on how to estimate this burden.
    It is important to note that we have not calculated the burden 
associated with the tasks required of the home infusion therapy AO 
under Sec.  488.1045 across all of the potential home infusion therapy 
AOs. We have not done so because the need for a home infusion therapy 
AO to perform these tasks only arise if a home infusion therapy AO 
voluntarily decides to terminate its CMS approved home infusion therapy 
accreditation program. This would occur rarely, if ever.
    We do not believe that there would ever be a situation in which all 
six of the potential home infusion therapy AOs would decide to 
terminate their CMS approved accreditation programs simultaneously.
    Proposed Sec.  488.1045(b) states that once CMS publishes a notice 
in the Federal Register announcing the decision to involuntarily 
terminate the home infusion therapy AO's home infusion therapy 
accreditation program, the home infusion therapy AO must provide 
written notification to all suppliers accredited under its CMS-approved 
home infusion therapy accreditation program by no later than 30 
calendar days after the notice is published in the Federal Register. 
This notice would announce that CMS is withdrawing its approval of the 
AOs home infusion therapy accreditation program and the implications 
for the home infusion therapy suppliers payment status in accordance 
with the requirements at Sec.  488.1010(f) once their current term of 
accreditation expires.
    The time burden associated with proposed Sec.  488.1045(b) would be 
the time it takes for the home infusion therapy AO to prepare and send 
the required written notification to all accredited home infusion 
therapy suppliers which states that CMS is withdrawing the AOs approval 
of the home infusion therapy accreditation program and which also 
states the implications for the home infusion therapy suppliers payment 
status. We estimate that it would take no more than 4 hours for an AO 
staff person to perform the following tasks: (1) Draft the required 
notification letter; (2) perform a mail merge to prepare a copy of the 
letter that is addressed to each home infusion therapy supplier 
accredited by the AO; (3) print copies of the notification letters for 
each of the AOs accredited home infusion therapy suppliers; (4) put 
each notifications letter into an envelope; (5) affix the correct 
amount of postage to the envelope and (6) put the envelopes into the 
outgoing mail.
    The home infusion therapy AO would incur a cost burden for the 
wages for the AO staff who performs the previously stated tasks. We 
believe that the person at the AO who would perform these tasks would 
most likely be a clinician such as a registered nurse. According to the 
U.S. Bureau of Labor Statistics, the mean hourly wage for a registered 
nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). 
Therefore, the estimated cost burden to the home infusion therapy AO 
associated with the preparation of the required notice which is to be 
sent to all of the AO's accredited suppliers would be $282.88 (4 hours 
x $35.36 per hour = $141.44) + ($141.44 for fringe benefits and 
overhead).
    The home infusion therapy AO would incur an additional burden for 
miscellaneous costs associated with the preparation of the required 
notices to be sent to the AOs accredited home infusion therapy 
suppliers, including the cost of the paper on which the notices are 
printed, the printer ink used, the cost of the envelopes used, and the 
postage required to mail all of the notices. We believe that these 
costs would not exceed $200.
    It is important to note that we have not calculated the burden 
associated with the tasks required of the home infusion therapy AO 
under Sec.  488.1045 across all of the potential home infusion therapy 
AOs. We have not done so because the need for a home infusion therapy 
AO to perform these tasks required by Sec.  488.1045(b) would only 
arise if CMS decides to involuntarily terminate the CMS approval of the 
AO's home infusion therapy accreditation program. This would occur 
rarely, if ever. Also, we do not believe that there would ever be a 
situation in which all 6 of the potential home infusion therapy AOs 
would decide to terminate their

[[Page 32493]]

CMS approved accreditation programs simultaneously.
    Proposed Sec.  488.1045(c)(3) would require that for both voluntary 
and involuntary terminations of a home infusion therapy AOs CMS 
approved home infusion therapy accreditation program, the home infusion 
therapy AO must provide a second written notification to all of its 
accredited home infusion therapy suppliers ten calendar days prior to 
the AO's accreditation program termination effective date. We estimate 
that the time and cost burdens associated with this requirement would 
be the same as our estimated burden for proposed Sec.  488.1045(b) set 
forth previously.
    Proposed Sec.  488.1045(d) sets forth the required steps that a 
home infusion therapy AO must take when one of its accredited home 
infusion therapy suppliers has requested a voluntary withdrawal from 
accreditation. The withdrawal from accreditation by the home infusion 
therapy supplier may not become effective until the AO completes all of 
the following 3 steps: (1) The home infusion therapy AO must contact 
the home infusion therapy supplier to seek written confirmation that 
the home infusion therapy supplier intends to voluntarily withdraw from 
the home infusion therapy accreditation program; (2) the home infusion 
therapy AO must advise the home infusion therapy supplier, in writing, 
of the statutory requirement for accreditation for all home infusion 
therapy suppliers and the possible payment consequences for a lapse in 
accreditation status; (3) the home infusion therapy AO must submit 
their final notice of the voluntary withdrawal of accreditation by the 
home infusion therapy supplier to CMS by no later than 5 business days 
after the request for voluntary withdrawal is ultimately processed and 
effective.
    The burden associated with the requirement that the home infusion 
therapy AO contact the home infusion therapy supplier to seek written 
confirmation that the home infusion therapy supplier intends to 
voluntarily withdraw from the home infusion therapy accreditation 
program would include the time required for the AO to contact the home 
infusion therapy supplier to request written confirmation that the home 
infusion therapy supplier does indeed want to terminate their home 
infusion therapy accreditation. We estimate that the AO would most 
likely contact the home infusion therapy supplier to make this request 
by telephone or email. We estimate this would take no more than 15 
minutes.
    The AO would incur a cost burden for the wages of the AO staff 
person for the time spent contacting the home infusion therapy supplier 
to confirm they intend to voluntarily withdraw from the home infusion 
therapy accreditation program. We believe that the person at the AO who 
would perform this task would most likely be a clinician such as a 
registered nurse. According to the U.S. Bureau of Labor Statistics, the 
mean hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the 
home infusion therapy AO associated with contacting the home infusion 
therapy supplier to confirm that they do want to voluntarily terminate 
would be $17.68 (15 minutes x $35.36 per hour = $8.84) + ($8.84 for 
fringe benefits and overhead).
    The home infusion therapy AO would also incur a time burden 
associated with the requirement that they send a written notice to the 
home infusion therapy supplier that is voluntarily terminating their 
home infusion therapy accreditation, which provides notice of the 
statutory requirement for accreditation for all home infusion therapy 
suppliers and the possible payment consequences for a lapse in 
accreditation status. We estimate that it would take the home infusion 
therapy no more than 60 minutes to prepare the written notification.
    We believe that the person at the AO who would prepare the required 
written notice to be sent to the home infusion therapy supplier that is 
voluntarily terminating its home infusion therapy accreditation would 
most likely be a clinician such as a registered nurse. According to the 
U.S. Bureau of Labor Statistics, the mean hourly wage for a registered 
nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). 
Therefore, the estimated cost burden to the home infusion therapy AO 
associated with the preparation of the required written notice would be 
$70.72 (1 hours x $35.36 per hour = $35.36) + ($35.36 for fringe 
benefits and overhead). We further estimate that the AO would incur 
postage costs in the amount of $0.50 for each letter sent.
    Finally, we estimate the burden associated with Sec.  
488.1045(d)(3) would include the time required for the home infusion 
therapy AO staff to prepare a final notice of voluntary withdrawal of 
accreditation by the home infusion therapy supplier and the time 
required to send this notice to CMS. We estimate that it would only 
take the AO staff 15 minutes or less to prepare the required notice for 
CMS, because this notice could be sent to CMS by email. We estimate it 
would take an additional 10 minutes of time for the AO staff to prepare 
the email and attach the written notice to the email.
    The AO would incur a cost burden for the wages of the AO staff for 
the time spent preparing the notice and sending it to CMS. We believe 
that the person at the AO who would prepare the required written notice 
to be sent to CMS would most likely be a clinician such as a registered 
nurse. According to the U.S. Bureau of Labor Statistics, the mean 
hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the 
home infusion therapy AO associated with the preparation of the 
required written notice to be sent to CMS would be $29.48 (15 minutes x 
$35.36 per hour = $8.84) + (10 minutes x $35.36 per hour = $5.90) + 
($14.74 for fringe benefits and overhead).
    It is important to note that we have not calculated the burden 
associated with the tasks required of the home infusion therapy AO 
under Sec.  488.1045(d) across all of the potential home infusion 
therapy AOs. We have not done so because the need for a home infusion 
therapy AO to perform these tasks would only arise if a home infusion 
therapy supplier would decide to voluntarily terminate its 
accreditation with the home infusion therapy AO. This would occur on an 
infrequent basis. We do not believe that there would ever be a 
situation in which all 6 of the potential home infusion therapy AOs 
would have a home infusion therapy supplier decide to voluntarily 
terminate the accreditation with their home infusion therapy AOs 
simultaneously.
(f) Burden for Home Infusion Therapy AOs Associated With Proposed Sec.  
488.1050
    Proposed Sec.  488.1050(a) would provide that a home infusion 
therapy AO that is dissatisfied with a determination, made by CMS, that 
its home infusion therapy accreditation requirements do not provide or 
do not continue to provide reasonable assurance that the suppliers 
accredited by the home infusion therapy AO meet the applicable quality 
standards is entitled to reconsideration.
    Proposed Sec.  488.1050(b)(1) would require that a written request 
for reconsideration be filed within 30 calendar days of the receipt of 
CMS' notice of an adverse determination or non-renewal. Proposed Sec.  
488.1050(b)(2) would provide that the written request for 
reconsideration must specify the findings or issues with which the home 
infusion therapy AO disagrees and the reasons for the disagreement. 
Proposed

[[Page 32494]]

Sec.  488.1050(c)(1) provides the opportunity for a hearing to be 
conducted by a hearing officer appointed by the Administrator of CMS 
and proposed Sec.  488.1050(c)(2) provides that written notice of the 
time and place of the hearing will be provided at least 10 business 
days before the scheduled date.
    We estimate that it would take approximately 2 hours for a home 
infusion therapy AO to prepare its request for reconsideration. We 
believe that the person at the AO who would prepare the request for 
reconsideration would most likely be a clinician such as a registered 
nurse. According to the U.S. Bureau of Labor Statistics, the mean 
hourly wage for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the 
home infusion therapy AO associated with the preparation of the request 
for reconsideration would be $141.44 (2 hours x $35.36 per hour = 
$70.72) + ($70.72 for fringe benefits and overhead).
    The remaining information that would be submitted in connection 
with a request for reconsideration or a reconsideration hearing, 
including any evidence or testimony provided is not considered 
``information'' in accordance with 5 CFR 1320.3(h)(8), which excludes 
as ``information'' any ``facts or opinions obtained or solicited at or 
in connection with public hearings.''
    It is important to note that we have not calculated the burden 
associated with the tasks required of the home infusion therapy AO 
under Sec.  488.1050 across all of the potential home infusion therapy 
AOs. We have not done so because we believe that the filing of a 
request for reconsideration by a home infusion therapy AO would occur 
rarely, if ever. Further, we do not believe that there would ever be a 
situation in which all 6 of the potential home infusion therapy AOs 
would decide to file a request for reconsideration at the same time. 
Therefore, there would never be an occurrence where all the home 
infusion therapy AOs would incur the previously stated burden 
simultaneously.
(g) Burdens for Home Infusion Therapy AOs Related to Survey Activities 
and Accreditation of Home Infusion Therapy Suppliers
    The home infusion therapy AO would incur time and cost associated 
the accreditation of home infusion therapy suppliers. These would 
include the time and costs required to perform an onsite survey, 
offsite survey or other type of survey activity for each home infusion 
therapy supplier that has hired that AO to provide accreditation. 
However, as we have not approved any home infusion therapy AOs, we do 
not yet know what type of home infusion therapy accreditation standards 
they will use, or what the home infusion therapy accreditation survey 
process will consist of. Therefore, we are unable to accurately 
estimate the time and cost burden associated with the survey of home 
infusion therapy suppliers.
    However, we can state that if the home infusion therapy AO were to 
perform an onsite survey, it would incur wages for each of the 
surveyors that are sent to perform the survey for the amount of time 
spent performing the survey. The AO would also incur wages for the time 
spent by the surveyors or other home infusion therapy AO staff in 
reviewing the survey documents, making a decision about whether to 
grant accreditation to the home infusion therapy supplier that was 
surveyed and preparing the decision letter to the home infusion therapy 
supplier. The AO would also incur travel costs for the AO staff to 
travel to the home infusion therapy supplier's location to perform the 
survey.
    If the home infusion therapy AO were to do an offsite records audit 
survey, the AO would request that the home infusion therapy supply the 
AO with specific records. The AO would incur costs for the wages of the 
AO staff that performed the audit of the documents provided by the home 
infusion therapy supplier. The AO would also incur wages for the time 
spent by the surveyors or other home infusion therapy AO staff in 
making a decision about whether to grant accreditation to the home 
infusion therapy supplier that was audited and preparing the decision 
letter to the home infusion therapy supplier.
    We seek comment on how to estimate this burden.
2. Burden to Home Infusion Therapy Suppliers Related to Home Infusion 
Therapy Health and Safety Standards
    All existing home infusion therapy suppliers are already accredited 
by existing home infusion therapy AOs to meet requirements established 
by private insurers and Medicare Advantage plans. We are proposing 
that, in order for the existing home infusion therapy suppliers 
accredited by these AOs to continue to receive payment for the home 
infusion therapy services provided, these AOs must obtain Medicare 
approval for a home infusion therapy accreditation program. To obtain 
this CMS approval, we are proposing that these AOs would be required to 
submit an application to CMS seeking approval of a home infusion 
therapy accreditation program that meets the requirements set forth in 
the proposed new home infusion therapy AO approval and oversight 
regulations and proposed new home infusion therapy health and safety 
regulations. We would also require that the home infusion therapy 
program submitted by these AOs be separate and distinct from the AOs 
home health deeming accreditation program.
    It is likely that the home infusion therapy suppliers would need to 
be resurveyed after their home infusion therapy AO obtains CMS approval 
of a home infusion therapy accreditation program, under section 
1861(iii)(3)(D)(i)(III) of the Act. We believe this resurvey would be 
necessary because the AOs would have to determine if the home infusion 
therapy suppliers they accredit meet their new Medicare-approved home 
infusion therapy accreditation program accreditation standards. 
However, if a current home infusion therapy AOs current home infusion 
therapy standards already meet or exceed the proposed home infusion 
therapy health and safety standards, so that a revision of that AOs 
home infusion therapy accreditation standards is not required, then a 
resurvey of that AO's accredited home infusion therapy suppliers may 
not be necessary.
    The home infusion therapy supplier would incur some time burden in 
order to come into compliance with the home infusion therapy AOs new 
home infusion therapy accreditation program requirements initially and 
thus prepare for the accreditation survey. However, all existing home 
infusion therapy suppliers are already accredited by existing home 
infusion therapy AOs to meet requirements established by private 
insurers and Medicare Advantage plans. Therefore, we assume that there 
would be little, is any new burden imposed on home infusion therapy 
suppliers in order to implement the proposed new health and safety 
standards.
    The home infusion therapy supplier would be charged a fee by the AO 
for providing accreditation services. Fees for the home infusion 
therapy accreditation currently offered by the six AOs listed 
previously accreditation programs offered by the six AOs listed 
previously vary between $5,950 and $12,500 and, in general, currently 
cover all of the following items: Application fee, manuals, initial 
accreditation fee, onsite surveys or other auditing (generally once 
every 3 years), and travel, when necessary for survey

[[Page 32495]]

personnel. Accreditation costs also vary by the size of the provider or 
supplier seeking accreditation, its number of locations, and the number 
of services it provides.
    We recognize that cost and time burdens associated with becoming 
accredited may be a barrier for small suppliers such as home infusion 
therapy suppliers. We propose to implement the following to minimize 
the burden of accreditation on suppliers, including small businesses:
    <bullet> Multiple accreditation organizations--We expect that more 
than one AO would submit an application to become a designated Home 
Infusion Therapy AO. We believe that selection of more than one home 
infusion therapy AO would introduce competition resulting in reductions 
in accreditation costs.
    <bullet> Required plan for small businesses--During the application 
process we would require prospective home infusion therapy AOs to 
include a plan that details their methodology to reduce accreditation 
fees and burden for small or specialty suppliers. This would need to 
include that the AO's fees are based on the size of the organization.
    <bullet> Reasonable quality standards--The quality standards that 
would be used to evaluate the services rendered by each home infusion 
therapy supplier are being proposed in this rule. Many home infusion 
therapy suppliers already comply with the standards and have 
incorporated these practices into their daily operations. It is our 
belief that compliance with the quality standards would result in more 
efficient and effective business practices and would assist suppliers 
in reducing overall costs.
    There are at least two important sources of uncertainty in 
estimating the impact of accreditation on home infusion therapy 
suppliers. First, our estimates assume that all home infusion therapy 
suppliers with positive Medicare payments would seek accreditation. We 
assume that home infusion therapy suppliers who currently receive no 
Medicare allowed charges would choose not to seek accreditation. It is 
also possible that many of the home infusion therapy suppliers with 
allowed charges between $1 and $1,000 may decide not to incur the costs 
of accreditation.
    Second, it is difficult to predict what accreditation fees would be 
in the future. Our experience with other accreditation programs has 
lead us to believe that the accreditation rates would go up, due to 
factors such as wage increases, and increased travel costs. To monitor 
accreditation fees, we propose to require the AOs for home infusion 
therapy suppliers to submit their proposed fees to CMS for review for 
reasonableness. We would require home infusion therapy AOs to notify 
CMS anytime there is an increase in accreditation fees.
(d) Medicare-Certified Accreditation Organizations--Proposed Changes to 
42 CFR 488.5
    We have proposed to modify the AO approval and oversight 
regulations for Medicare-certified providers and suppliers by adding 
two new requirements. The first proposed new requirement is to added to 
42 CFR 488.5(a)(7) and is a requirement that in their application for 
CMS approval, the AOs that accredited Medicare-certified providers and 
suppliers must include a statement acknowledging that all accrediting 
organization surveyors have completed or will complete the relevant 
program specific CMS online trainings established for state surveyors, 
initially, and thereafter. The second requirement is to be added as 
Sec.  488.5(a)(18)(iii) and would require that the AOs for Medicare-
certified providers and suppliers include a written statement in their 
application for CMS approval agreeing that if a fully accredited and 
deemed facility in good standing provides written notification that 
they wish to voluntarily withdraw from the accrediting organization's 
CMS-approved accreditation program, the accrediting organization must 
continue the facility's current accreditation in full force and effect 
until the effective date of withdrawal identified by the facility or 
the expiration date of the term of accreditation, whichever comes 
first.
(1) Burden Associated With the Online Training Requirement for AO 
Surveyors
    CMS provides a number of online surveyor training modules that are 
available to the State Survey Agency surveyors. We have proposed to 
require the AO surveyors to take this training in an attempt to 
decrease the historically high disparity rate between the AOs survey 
results and those of the validation surveys performed by the State 
Survey Agency surveyors.
    CMS offers 168 online surveyor training programs that are available 
for the State Survey Agency surveyors. This website provides courses 
that are general in nature such as ``Principles of Documentation 
Learning Activity--Long Term Care'', ``Basic Writing Skills for 
Surveyor Staff'', Infection Control, Patient Safety, and Emergency 
Preparedness. The CMS Surveyor Training website also offers courses 
related to specific healthcare settings, services, and regulations, 
such as hospitals, CAHs, ASCs, CLIA, CMHCs, EMTALA, FQHCs, HHAs and 
OASIS, Hospices, Nursing Homes and the MDS, Outpatient Physical 
Therapy/Outpatient Speech Therapy (OPT/OST). These courses are self-
paced and the person taking the course can take the courses over a 
period of time. The amount of time required to complete each of these 
training course varies depending on the pace preferred by the trainee.
    We estimate that each SA surveyor takes approximately 10 courses on 
the CMS Surveyor Training website. We estimate that it would take 
approximately 3-5 hours to complete each of these courses. We believe 
that the surveyors for AOs that accredit Medicare-certified providers 
should take the same number and type of surveyor training courses as 
the SA surveyors (that is--approximately 10 courses). This means that 
each of the AOs surveyors that takes this training would incur a time 
burden in the amount of 30 to 50 hours.
    The AOs that accredit Medicare-certified providers and suppliers 
would incur a cost burden for the wages of the surveyor for the time 
they spend taking these online surveyor training courses. Most 
surveyors are clinicians such as registered nurses. According to the 
U.S. Bureau of Labor Statistics, the mean hourly wage for a registered 
nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). As 
noted previously, we estimated that it would take approximately 30-50 
hours for each AO surveyor to complete 10 online surveyor courses. 
Therefore, the AO would incur wages in the amount of $1,060.80 to 
$1,768 per each surveyor that completes the CMS online surveyor 
training (($35.36 x 30 hours = $1,060.80) and ($35.36 x 50 hours = 
$1,768)). The AO would also incur additional costs for fringe benefits 
and overhead in the amount of $1,060.80 to $1,768.00 per each surveyor 
that completes the CMS online surveyor training.
    We are not able to accurately estimate to total time and cost 
burden to each AO for the wages incurred for the time spent by all 
surveyors of that AO that take the CMS online surveyor training 
courses, because we do not know exactly how many surveyors each AO has. 
However, if we estimate that each AO has 15 surveyors, the estimated 
time burden to each AO associated with this requirement would be 450 to 
750 hours ((30 hours x 15 surveyors = 450 hours per all surveyors) and 
(50 hours x 15 surveyors = 750 hours per all surveyors)). The estimated 
cost burden to each AO for Medicare-certified providers and supplies 
associated with

[[Page 32496]]

this requirement would be $31,824 to $53,040 (($1,060.80 x 15 = 
$15,912) and ($1,768.00 x 15 = $26,520) and ($15,912 to $26,520 for 
fringe benefits and overhead)).
    There are currently 9 AOs that accredit Medicare-certified 
providers and suppliers. We estimate that the time burden across all of 
these AOs associated with the requirement that their surveyors take the 
CMS online surveyor training would be 4,050 to 6,750 ((450 hours per 
all surveyors/AO x 9 AOs = 4,050 hours across all AOs) and (750 hours 
per all surveyors/AO x 9 AOs = 6,750 hours across all AOs)). The 
estimated cost across all AOs that accredit Medicare-certified 
providers and suppliers would be $143,208 to $238,680 (($15,912 x 9 AOs 
= $143,208) and ($26,520 x 9 AOs = $238,680)). The cost for fringe 
benefits and overhead on these estimated wages across all AOs would be 
$143,208 to 238,680.
(2) Burden Associated With the Statement Requirement for AOs
    We are proposing that AOs approved in accordance with section 1865 
of the Act, and regulated under part 488 subpart A, provide a written 
statement in their application in which they agree to continue a 
provider's or supplier's current accreditation in full force and effect 
until the effective date of withdrawal identified by the facility or 
the expiration date of the term of accreditation, whichever comes 
first.
    Proposed Sec.  488.5(a)(18)(iii) would require the AOs for 
Medicare-certified providers and suppliers to include a written 
statement in their application for CMS approval of their accreditation 
program, agreeing that if a fully accredited and deemed facility in 
good standing provides written notification that they wish to 
voluntarily withdraw from the accrediting organization's CMS-approved 
accreditation program, the accrediting organization must continue the 
facility's current accreditation in full force and effect until the 
effective date of withdrawal identified by the facility or the 
expiration date of the term of accreditation, whichever comes first.
    We believe that the AOs that accredit Medicare-certified providers 
and suppliers would incur limited burden associated with this 
requirement, because this proposed regulation simply requires that the 
AOs to include a statement in their application stating that they agree 
to continue the facility's current accreditation in full force and 
effect until the effective date of withdrawal identified by the 
facility or the expiration date of the term of accreditation, whichever 
comes first, if a provider of supplier provides written notification 
that they wish to voluntarily withdraw from the accrediting 
organization's CMS-approved accreditation program. We believe that this 
written statement to be provided by the AO would consist of only 1 to 2 
paragraphs and would take no more than 15 minutes to prepare.
    We believe that a clinicians such as registered nurses would 
prepare the required statement to be included in the AOs application. 
According to the U.S. Bureau of Labor Statistics, the mean hourly wage 
for a registered nurse is $35.36 (https://www.bls.gov/oes/current/oes291141.htm). Therefore, the estimated cost burden to the AOs that 
accredit Medicare-certified providers and suppliers associated with the 
preparation of the required statement would be approximately $17.68 
((15 minutes x $35.36 per hour = $8.84) + ($8.84 for fringe benefits 
and overhead)).
    There are nine AOs that accredit Medicare-certified providers and 
suppliers. The cost across all AOs for the completion of this task 
would be $158.12 (($8.84 x 9 AOs = $79.56) + ($79.56 for fringe 
benefits and overhead. However, AOs for Medicare-certified providers 
and suppliers are required to submit a renewal application only every 
six years. Therefore, the existing AOs would be required to submit the 
statement stating that they agree to continue the facility's current 
accreditation in full force and effect until the effective date of 
withdrawal identified by the facility or the expiration date of the 
term of accreditation, whichever comes first, if a provider of supplier 
provides written notification that they wish to voluntarily withdraw 
from the accrediting organization's CMS-approved accreditation program 
with their next renewal application which is submitted after the 
publication of the final rule. While we have calculated the cost for 
the performance of this task across all AOs that accredit Medicare-
certified providers and suppliers, it is important to note that the 
existing AOs are scheduled to submit their renewal applications at 
varying dates and times over a period of several years. Therefore there 
will be no time period in which all of these AOs will incur these 
expenses simultaneously.

D. Detailed Economic Analysis

1. HH PPS
    This rule proposes updates for the CY 2019 HH PPS rates contained 
in the CY 2018 HH PPS final rule (82 FR 51676 through 51752). The 
impact analysis of this proposed rule presents the estimated 
expenditure effects of policy changes proposed in this rule. We use the 
latest data and best analysis available, but we do not make adjustments 
for future changes in such variables as number of visits or case-mix.
    This analysis incorporates the latest estimates of growth in 
service use and payments under the Medicare HH benefit, based primarily 
on Medicare claims data from 2017. We note that certain events may 
combine to limit the scope or accuracy of our impact analysis, because 
such an analysis is future-oriented and, thus, susceptible to errors 
resulting from other changes in the impact time period assessed. Some 
examples of such possible events are newly-legislated general Medicare 
program funding changes made by the Congress, or changes specifically 
related to HHAs. In addition, changes to the Medicare program may 
continue to be made as a result of the Affordable Care Act, or new 
statutory provisions. Although these changes may not be specific to the 
HH PPS, 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 HHAs.
a. HH PPS for CY 2019
    Table 59 represents how HHA revenues are likely to be affected by 
the policy changes proposed in this rule for CY 2019. For this 
analysis, we used an analytic file with linked CY 2017 OASIS 
assessments and HH claims data for dates of service that ended on or 
before December 31, 2017. The first column of Table 59 classifies HHAs 
according to a number of characteristics including provider type, 
geographic region, and urban and rural locations. The second column 
shows the number of facilities in the impact analysis. The third column 
shows the payment effects of the CY 2019 wage index and revised labor 
share. The fourth column shows the payment effects of the CY 2019 case-
mix weights. The fifth column shows the effects of the new rural add-on 
payment provision in statute. The sixth column shows the effects of the 
revised FDL ratio used to calculate outlier payments, and the seventh 
column shows the effects of the CY 2019 home health payment update 
percentage.
    The last column shows the combined effects of all the policies 
proposed in this rule. Overall, it is projected that aggregate payments 
in CY 2019 would increase by 2.1 percent. As illustrated in Table 59, 
the combined effects of all of the changes vary by specific types of

[[Page 32497]]

providers and by location. We note that some individual HHAs within the 
same group may experience different impacts on payments than others due 
to the distributional impact of the CY 2019 wage index, the extent to 
which HHAs had episodes in case-mix groups where the case-mix weight 
decreased for CY 2019 relative to CY 2018, the percentage of total HH 
PPS payments that were subject to the low-utilization payment 
adjustment (LUPA) or paid as outlier payments, and the degree of 
Medicare utilization.

                                    Table 59--Estimated HHA Impacts by Facility Type and Area of the Country, CY 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              CY 2019                                            CY 2019 HH
                                                                             wage index    CY 2019     Rural add-    Updated      payment
                                                                Number of    and labor     case-mix        on      outlier FDL     update     Total (%)
                                                                 agencies    share \1\   weights \2\   revisions    ratio 0.51   percentage
                                                                                (%)          (%)          (%)          (%)          \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Agencies.................................................       10,547          0.0          0.0         -0.1          0.1          2.1          2.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Facility Type and Control
--------------------------------------------------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP...................................        1,065         -0.3         -0.1          0.0          0.2          2.1          1.9
Free-Standing/Other Proprietary..............................        8,366          0.1          0.0         -0.1          0.1          2.1          2.2
Free-Standing/Other Government...............................          260          0.3          0.1         -0.1          0.2          2.1          2.6
Facility-Based Vol/NP........................................          604          0.0          0.0          0.0          0.2          2.1          2.3
Facility-Based Proprietary...................................           76         -0.3          0.1         -0.2          0.2          2.1          1.9
Facility-Based Government....................................          176         -0.1          0.0         -0.3          0.2          2.1          1.9
                                                              ------------------------------------------------------------------------------------------
    Subtotal: Freestanding...................................        9,691          0.0          0.0         -0.1          0.1          2.1          2.1
    Subtotal: Facility-based.................................          856         -0.1          0.0         -0.1          0.2          2.1          2.1
    Subtotal: Vol/NP.........................................        1,669         -0.2         -0.1          0.0          0.2          2.1          2.0
    Subtotal: Proprietary....................................        8,442          0.1          0.0         -0.1          0.1          2.1          2.2
    Subtotal: Government.....................................          436          0.1          0.0         -0.2          0.2          2.1          2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Facility Type and Control: Rural
--------------------------------------------------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP...................................          253          0.1          0.1         -0.3          0.2          2.1          2.2
Free-Standing/Other Proprietary..............................          821          0.6          0.0         -0.7          0.1          2.1          2.1
Free-Standing/Other Government...............................          176          0.5          0.1         -0.2          0.2          2.1          2.7
Facility-Based Vol/NP........................................          273          0.2          0.1         -0.3          0.2          2.1          2.3
Facility-Based Proprietary...................................           41          0.1          0.2         -0.5          0.1          2.1          2.0
Facility-Based Government....................................          134          0.2          0.1         -0.4          0.2          2.1          2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Facility Type and Control: Urban
--------------------------------------------------------------------------------------------------------------------------------------------------------
Free-Standing/Other Vol/NP...................................          812         -0.4         -0.1          0.0          0.2          2.1          1.8
Free-Standing/Other Proprietary..............................        7,545          0.0          0.0          0.0          0.1          2.1          2.2
Free-Standing/Other Government...............................           84          0.1          0.1          0.0          0.2          2.1          2.5
Facility-Based Vol/NP........................................          331         -0.1         -0.1          0.0          0.2          2.1          2.1
Facility-Based Proprietary...................................           35         -0.6          0.1          0.0          0.2          2.1          1.8
Facility-Based Government....................................           42         -0.4         -0.1         -0.1          0.1          2.1          1.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Facility Location: Urban or Rural
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rural........................................................        1,698          0.4          0.0         -0.6          0.1          2.1          2.0
Urban........................................................        8,849          0.0          0.0          0.0          0.1          2.1          2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Facility Location: Region of the Country (Census Region)
--------------------------------------------------------------------------------------------------------------------------------------------------------
New England..................................................          363         -0.9          0.0          0.0          0.2          2.1          1.4
Mid Atlantic.................................................          482         -0.3         -0.2          0.0          0.2          2.1          1.8
East North Central...........................................        2,031         -0.3          0.1          0.0          0.1          2.1          2.0
West North Central...........................................          705          0.0          0.1          0.0          0.2          2.1          2.4
South Atlantic...............................................        1,647          0.0         -0.2          0.0          0.1          2.1          2.0
East South Central...........................................          423          0.1         -0.1         -0.5          0.1          2.1          1.7
West South Central...........................................        2,774          0.6          0.1         -0.3          0.1          2.1          2.6
Mountain.....................................................          678         -0.3          0.1          0.1          0.2          2.1          2.2
Pacific......................................................        1,403          0.3          0.2          0.0          0.1          2.1          2.7
Other........................................................           41          0.9         -0.9          0.0          0.2          2.1          2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Facility Size (Number of First Episodes)
--------------------------------------------------------------------------------------------------------------------------------------------------------
<100 episodes................................................        2,907          0.0          0.3          0.0          0.2          2.1          2.6
100 to 249...................................................        2,301          0.1          0.4         -0.1          0.1          2.1          2.6
250 to 499...................................................        2,218          0.1          0.3         -0.1          0.1          2.1          2.5
500 to 999...................................................        1,637          0.1          0.1         -0.1          0.1          2.1          2.3
1,000 or More................................................        1,484          0.0         -0.1         -0.1          0.1          2.1          2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 for which we had a linked OASIS assessment.
\1\ The impact of the CY 2019 home health wage index is offset by the wage index budget neutrality factor described in section III.C.4 of this proposed
  rule.

[[Page 32498]]

 
\2\ The impact of the CY 2019 home health case-mix weights reflects the recalibration of the case-mix weights offset by the case-mix weights budget
  neutrality factor described in section III.B of this proposed rule.
\3\ The CY 2019 home health payment update percentage reflects the home health payment update of 2.1 percent as described in section III.C.2 of this
  proposed rule.
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; Other = Guam, Puerto Rico, Virgin
  Islands.

b. HH PPS for CY 2020 (Proposed PDGM)
    Table 60 represents how HHA revenues are likely to be affected by 
the policy changes proposed in this rule for CY 2020. For this 
analysis, we used an analytic file with linked CY 2017 OASIS 
assessments and CY 2017 HH claims data (as of March 2, 2018) for dates 
of service that ended on or before December 31, 2017. The first column 
of Table 60 classifies HHAs according to a number of characteristics 
including provider type, geographic region, and urban and rural 
locations. The second column shows the number of HHAs in the impact 
analysis. The PDGM, as required by Section 51001(a)(2)(A) of the BBA of 
2018, will be implemented in a budget neutral manner and the third 
column shows the total impact of the proposed PDGM as outlined in 
section III.F of this proposed rule. As illustrated in Table 60, the 
effect of the proposed PDGM varies by specific types of providers and 
location. We note that some individual HHAs within the same group may 
experience different impacts on payments than others. This is due to 
distributional differences among HHAs with regards to the percentage of 
total HH PPS payments that were subject to the low-utilization payment 
adjustment (LUPA) or paid as outlier payments, the degree of Medicare 
utilization, and the ratio of overall visits that were provided as 
therapy versus skilled nursing.
    As outlined in section III.F of this proposed rule, several OASIS 
items would no longer be needed to case-mix adjust the 30-day payment 
under the PDGM; therefore, we would make 19 current OASIS items (48 
data elements) optional at the FU time point starting January 1, 2020. 
As also discussed in section III.F. of this proposed rule, in order to 
calculate the case-mix adjusted payment amount for the PDGM, we would 
add the collection of two current OASIS items (10 data elements) at the 
FU time point starting January 1, 2020. Section VII of this proposed 
rule provides a detailed description of the net decrease in burden 
associated with these proposed changes in conjunction with the changes 
in burden that result from OASIS item collection changes due to the 
proposed removal of certain measures required under HH QRP, also 
effective for January 1, 2020 as outlined in section V.E of this rule. 
We estimate that the burden associated with OASIS item collection as a 
result of this proposed rule results in a net $60 million in annualized 
cost savings to HHAs, discounted at 7 percent relative to year 2016, 
over a perpetual time horizon beginning in CY 2020.

                   Table 60--Impacts of PDGM, CY 2020
------------------------------------------------------------------------
                                             Number of
                                             agencies        PDGM (%)
------------------------------------------------------------------------
All Agencies............................          10,480            0.0%
------------------------------------------------------------------------
                        Facility Type and Control
------------------------------------------------------------------------
Free-Standing/Other Vol/NP..............           1,055             2.6
Free-Standing/Other Proprietary.........           8,309            -1.2
Free-Standing/Other Government..........             260             1.1
Free-Based Vol/NP.......................             604             3.8
Free-Based Proprietary..................              76             4.4
Free-Based Government...................             176             4.6
                                         -------------------------------
    Subtotal: Freestanding..............           9,624            -0.4
    Subtotal: Free-based................             856             3.9
    Subtotal: Vol/NP....................           1,659             2.9
    Subtotal: Proprietary...............           8,385            -1.2
    Subtotal: Government................             436             2.9
------------------------------------------------------------------------
                    Facility Type and Control: Rural
------------------------------------------------------------------------
Free-Standing/Other Vol/NP..............             253             3.8
Free-Standing/Other Proprietary.........             820             3.9
Free-Standing/Other Government..........             176             1.9
Free-Based Vol/NP.......................             273             4.1
Free-Based Proprietary..................              41            11.3
Free-Based Government...................             134             5.9
------------------------------------------------------------------------
                    Facility Type and Control: Urban
------------------------------------------------------------------------
Free-Standing/Other Vol/NP..............             802             2.4
Free-Standing/Other Proprietary.........           7,489            -1.8
Free-Standing/Other Government..........              84             0.3
Free-Based Vol/NP.......................             331             3.7
Free-Based Proprietary..................              35             0.1

[[Page 32499]]

 
Free-Based Government...................              42             3.4
------------------------------------------------------------------------
                    Facility Location: Urban or Rural
------------------------------------------------------------------------
Rural...................................           1,697             4.0
Urban...................................           8,783            -0.6
------------------------------------------------------------------------
        Facility Location: Region of the Country (Census Region)
------------------------------------------------------------------------
New England.............................             354             2.5
Mid Atlantic............................             479             3.1
East North Central......................           2,012            -1.1
West North Central......................             703            -3.9
South Atlantic..........................           1,643            -5.3
East South Central......................             423             0.9
West South Central......................           2,750             4.1
Mountain................................             675            -5.2
Pacific.................................           1,400             3.8
Other...................................              41            11.0
------------------------------------------------------------------------
                 Facility Size (Number of 1st Episodes)
------------------------------------------------------------------------
< 100 episodes..........................           2,841             1.9
100 to 249..............................           2,301             1.1
250 to 499..............................           2,218             0.6
500 to 999..............................           1,636            -0.3
1,000 or More...........................           1,484            -0.2
------------------------------------------------------------------------
                      Nursing/Therapy Visits Ratio
------------------------------------------------------------------------
1st Quartile (Lowest 25 Nursing)........           2,620            -9.9
2nd Quartile............................           2,620            -0.8
3rd Quartile............................           2,620             6.5
4th Quartile (Top 25 Nursing)...........           2,620            17.0
------------------------------------------------------------------------
Source: CY 2017 Medicare claims data (as of March 2, 2018) for episodes
  ending on or before December 31, 2017 for which we had a linked OASIS
  assessment.
Note(s): The ``PDGM'' is the 30-day version of the model with no
  behavioral assumptions applied. From the impact file, this analysis
  omits 354,099 60-day episodes not grouped under the PDGM (either due
  to a missing SOC OASIS, because they could be assigned to a clinical
  grouping, or had missing therapy/nursing visits). After converting 60-
  day episodes to 30-day periods for the PDGM, a further 26 periods were
  excluded with missing NRS weights, and 2,386 periods with a missing
  urban/rural indicator. These excluded episodes results overall in 67
  fewer HHAs being represented than in the standard impact tables.
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; Other = Guam, Puerto Rico, Virgin Islands.

    In response to the CY 2019 case-mix adjustment methodology 
refinements proposed in the CY 2018 HH PPS proposed rule (82 FR 35270), 
a few commenters requested that CMS include more information in the 
impact table for the proposed PDGM, specifically how payments are 
impacted for patients with selected clinical conditions as was included 
in the Technical Report which is available at: https://downloads.cms.gov/files/hhgm%20technical%20report%20120516%20sxf.pdf. 
Therefore, we are including Table 61 which provides more information on 
the impact of the PDGM case-mix adjustment methodology for patients 
with selected clinical conditions.

    Table 61--Impact of the PDGM for Selected Patient Characteristics
------------------------------------------------------------------------
                                                  Ratio of average PDGM
                                                    payment to average
                                                     current (30-day
                                                   equivalent) payment
------------------------------------------------------------------------
All Episodes (60-Day Count)....................                     1.00
------------------------------------------------------------------------
                             Clinical Group
------------------------------------------------------------------------
Behavioral Health..............................                     0.85
Complex........................................                     1.13

[[Page 32500]]

 
MMTA...........................................                     1.00
MS Rehab.......................................                     0.96
Neuro Rehab....................................                     0.93
Wound..........................................                     1.27
------------------------------------------------------------------------
                            Functional Level
------------------------------------------------------------------------
Low............................................                     0.95
Medium.........................................                     1.00
High...........................................                     1.05
------------------------------------------------------------------------
                            Admission Source
------------------------------------------------------------------------
Community......................................                     0.89
Institutional..................................                     1.30
------------------------------------------------------------------------
                                 Timing
------------------------------------------------------------------------
Early..........................................                     1.25
Late...........................................                     0.87
------------------------------------------------------------------------
                            Comorbidity Group
------------------------------------------------------------------------
No adjustment..................................                     0.97
Single Comorbidity.............................                     1.02
Comorbidity Interaction........................                     1.22
------------------------------------------------------------------------
                               Dual Status
------------------------------------------------------------------------
Not (Full) Dual Eligible.......................                     0.99
Yes (Full) Dual Eligible.......................                     1.03
------------------------------------------------------------------------
                          Parenteral Nutrition
------------------------------------------------------------------------
No Parenteral Nutrition........................                     1.00
Yes Parenteral Nutrition.......................                     1.18
------------------------------------------------------------------------
                             Surgical Wounds
------------------------------------------------------------------------
No Known Surgical Wound........................                     0.98
Yes Known Surgical Wound.......................                     1.11
------------------------------------------------------------------------
                                 Ulcers
------------------------------------------------------------------------
No Ulcers Recorded.............................                     0.99
Positive Number of Ulcers Recorded.............                     1.16
------------------------------------------------------------------------
                                 Bathing
------------------------------------------------------------------------
Able to Bathe with some independence...........                     0.97
Cannot bathe independently.....................                     1.08
------------------------------------------------------------------------
                  Poorly-Controlled Cardiac Dysrhythmia
------------------------------------------------------------------------
No Poorly-Controlled Cardiac Dysrhythmia.......                     1.00
Yes Poorly-Controlled Cardiac Dysrhythmia......                     1.04
------------------------------------------------------------------------
                       Poorly-Controlled Diabetes
------------------------------------------------------------------------
No Poorly-Controlled Diabetes..................                     0.99
Yes Poorly-Controlled Diabetes.................                     1.06
------------------------------------------------------------------------
              Poorly-Controlled Peripheral Vascular Disease
------------------------------------------------------------------------
No Poorly-Controlled Peripheral Vascular                            1.00
 Disease.......................................
Yes Poorly-Controlled Peripheral Vascular                           1.07
 Disease.......................................
------------------------------------------------------------------------
                  Poorly-Controlled Pulmonary Disorder
------------------------------------------------------------------------
No Poorly-Controlled Pulmonary Disorder........                     1.00

[[Page 32501]]

 
Yes Poorly-Controlled Pulmonary Disorder.......                     1.03
------------------------------------------------------------------------
                            Open Wound/Lesion
------------------------------------------------------------------------
No Open Wound/Lesion...........................                     0.98
Yes Open Wound/Lesion..........................                     1.10
------------------------------------------------------------------------
                          Temporary Health Risk
------------------------------------------------------------------------
No Temporary Health Risk.......................                     0.99
Yes Temporary Health Risk......................                     1.02
------------------------------------------------------------------------
                       Fragile/Serious Health Risk
------------------------------------------------------------------------
Yes Fragile/Serious Health Risk................                     0.98
No Fragile/Serious Health Risk.................                     1.04
------------------------------------------------------------------------
Note(s): **For this table only**, payments are for normal episodes and
  do not include outlier payments. For comparability with the 30-day
  PDGM, current payments have been halved from 60-day amounts to
  simulate 30-day payments. PDGM payments have been normalized so that
  national average 30-day payments equaled the 30-day current system
  equivalent payment to facilitate an understanding of reallocation of
  payments from the current system. For the ratio of PDGM to current
  payments in the right-hand column, a value greater than one signifies
  that characteristic would receive increased payment and a value less
  than one would signify that characteristic would receive lesser
  payment, all else equal, in the PDGM. To be classified as Poorly
  Controlled Cardiac Dysrhythmia, Diabetes, Peripheral Vascular Disease,
  or Pulmonary Disorder required one of the following respective primary
  or secondary diagnosis codes with an accompanying recorded ``poorly-
  controlled'' degree of symptom control: Cardiac Dysthymia: ICD-10 I-21-
  I22.9 & I47-I49; Diabetes: E08.0-E08.8, E09.0-E09.8, & E10-E14;
  Peripheral Vascular Disease: ICD-10 I73; and Pulmonary Disorder: (I40-
  47, J84.01, J84.02, J84.03, J84.10, J96.0-J96.92, & J98.01-J98.3).

2. HHVBP Model
    Table 62 displays our analysis of the distribution for possible 
payment adjustments at the maximum 7-percent, and 8-percent rates that 
will be used in Years 4 and 5 of the Model. These analyses use 
performance year data from 2016, the first year of HHVBP, the most 
recent year for which complete performance year data are available. The 
estimated impacts are for the following proposed changes, each of which 
would take effect beginning with PY4 (2019):
    <bullet> Remove two OASIS-based measures (Influenza Immunization 
Received for Current Flu Season and Pneumococcal Polysaccharide Vaccine 
Ever Received);
    <bullet> Replace three OASIS-based measures (Improvement in 
Bathing, Improvement in Bed Transferring, and Improvement in 
Ambulation-Locomotion) with two composite measures (Total Change in 
Self Care, Total Change in Mobility). The two composite measures would 
have a maximum score of 15 points;
    <bullet> Reduce the maximum possible improvement points from 10 to 
9 (13.5 for the two composite measures); and,
    <bullet> Change the weights given to the performance measures used 
in the Model so that the OASIS and claims-based measures each count for 
35 percent and the HHCAHPS measures count for 30 percent of the 90 
percent of the Total Performance Score (TPS) that is based on 
performance on the Clinical Quality of Care, Care Coordination and 
Efficiency, and Person and Caregiver-Centered Experience measures. Data 
reporting for each New Measure would continue to have equal weight and 
account for the 10 percent of the TPS that is based on the New Measures 
collected as part of the Model. The weight of the unplanned 
hospitalization measure would also be increased so that it has three 
times the weight of the ED use without hospitalization measure.
    We analyzed the payment adjustment percentage and the number of 
eligible HHAs under current policy to determine the impacts if the 
proposed changes in this rule were finalized. We used PY1 (CY2016) data 
to measure the impacts. The data sources for these analyses are data 
from the QIES system for the existing OASIS and claims-based measures, 
OASIS assessments for the two composite measures, HHCAHPS data received 
from the HHCAHPS contractor, and New Measure data submitted by Model 
participants. HHAs are classified as being in the smaller or larger 
volume cohort using the 2016 Quality Episode File, which is created 
using OASIS assessments. We note that this impact analysis is based on 
the aggregate value across all nine Model states.
    Table 63 displays our analysis of the estimated impact of the 
proposals in this rule on the number of eligible HHAs and the 
distribution of percentage change in payment adjustment percentage 
based on the same PY1 (CY2016) data used to calculate Table 62. We note 
that this impact analysis is based on the aggregate value across all 
nine Model states. Note that all Medicare-certified HHAs that provide 
services in Massachusetts, Maryland, North Carolina, Florida, 
Washington, Arizona, Iowa, Nebraska, and Tennessee are required to 
compete in this Model. The analysis is calculated at the state and size 
cohort level. It is expected that a certain number of HHAs would not 
have a payment adjustment because they may be servicing too small of a 
population to report an adequate number of measures to calculate a TPS. 
Table 63 shows that there would be a reduction in the number of HHAs 
that would have a sufficient number of measures to receive a payment 
adjustment for performance year 4 of 31 HHAs (Change column), a 
decrease from 1,610 HHAs (Current column) to 1,579 HHAs (Simulated 
column) across the nine selected states.
    This analysis reflects only HHAs that would have data for at least 
five measures that meet the requirements of Sec.  484.305 and would be 
included in the LEF and would have a payment adjustment calculated. 
Value-based incentive payment adjustments for the estimated eligible 
1,579 HHAs in the selected states that would compete in the HHVBP Model 
are stratified by size as described in section IV.B. of the CY 2017 HH 
PPS final rule. As finalized in

[[Page 32502]]

section IV.B. of the CY 2017 final rule, there must be a minimum of 
eight HHAs in any cohort.
    Those HHAs that are in states that do not have at least eight 
smaller-volume HHAs will not have a separate smaller-volume cohort and 
thus there will only be one cohort that will include all the HHAs in 
that state. As indicated in Table 63, Maryland, North Carolina, 
Tennessee, Washington, and Arizona would have only one cohort while 
Florida, Iowa, Massachusetts, and Nebraska would have both a smaller-
volume cohort and a larger-volume cohort. For example, Iowa would have 
17 HHAs eligible to be exempt from being required to have their 
beneficiaries' complete HHCAHPS surveys because they provide HHA 
services to less than 60 beneficiaries. Therefore, those 17 HHAs would 
be competing in Iowa's smaller-volume cohort for CY 2019 (PY4) under 
the Model.
    Table 63 shows the distribution of percentage change in payment 
adjustment percentage resulting from the proposals in this rule. Using 
2016 data and the maximum payment adjustment for performance year 4 of 
7 percent (as applied in CY 2021), based on the six proposed OASIS 
quality measures and two claims-based measures in QIES, the five 
HHCAHPS measures, and the three New Measures, we see that, across all 
nine states, 31 HHAs would no longer be eligible for a payment 
adjustment for PY4 because they would not have data on at least five 
measures that meet the requirements of Sec.  484.305. The distribution 
of scores by percentile shows the distribution of the change in percent 
payment adjustment. For example, the distribution for HHAs in Florida 
in the smaller-volume cohort ranges from -2.5 percent at the 10th 
percentile to +2.9 percent at the 90th percentile. This means that, for 
7 of the 77 HHAs in the smaller-volume cohort in Florida, the proposed 
changes would decrease their payment adjustment percentage by -2.5 
percent or more while, for another 7 HHAs these proposed changes would 
increase their payment adjustment percentage by 2.9 percent or more. 
For half of the HHAs in Florida's smaller volume cohort, the impact of 
these proposed changes on their payment adjustment percentage would be 
between -1.1 percent and +1.3 percent. These impact analyses suggest 
that, for most participating HHAs, the impacts of the proposed changes 
would be modest.
    Table 64 provides the payment adjustment distribution based on 
agency size, proportion of dually-eligible beneficiaries, average case 
mix (using the average case-mix for non-LUPA episodes), the proportion 
of the HHA's beneficiaries that reside in rural areas and HHA 
organizational status. HHAs with a higher proportion of dually-eligible 
beneficiaries and HHAs whose beneficiaries have higher acuity tend to 
have a more negative impact associated with the proposals in this rule 
based on the 50th percentile of the impact of the changes on payment 
adjustment percentage.
    Table 65 shows the current and proposed weights for individual 
performance measures by measure category and possible applicable 
measure category scenarios to demonstrate the weight of the individual 
measures when an HHA has scores on All Measures or if an HHA is missing 
all measures in a measure category. For example, for an HHA that has 
quality measure scores on All Measures in all the measure categories 
(OASIS-based, claims-based and HHCAHPS) under the current weighting 
method, the individual measures are weighted equally. The Proposed 
Weights columns show the proposed weights for the individual 
performance measures based on the changes to the weighting methodology 
proposed in this rule. For example, for HHAs with scores on All 
Measures, the OASIS-based measures account for 35 percent of the TPS, 
with equal weighting given to the Improvement in Oral Medications, 
Improvement in Dyspnea, Improvement in Pain, and Discharge to Community 
measures. The proposed Composite Self-Care and Composite Mobility 
measures would be weighted 1.5 times more than the other OASIS-based 
measures so that the maximum score for the two composite measures is 
the same as for the three functional OASIS-based measures that they 
would replace (Improvement in Ambulation, Bathing and Bed 
Transferring). Under the proposed weights, the two claims-based 
measures, which would collectively account for 35 percent of an HHA's 
TPS, would not be weighted equally. We are proposing that the weight of 
the acute care hospitalization measure would be three times higher than 
that of the ED Use measure. Thus, its weight would be 26.25 percent 
while the weight of the ED Use measure would be 8.75 percent for an HHA 
that reported on all measures. The HHCAHPS measures would account for 
30 percent of an HHA's TPS and each measure would be weighted equally.
    Table 65 also shows the number of HHAs that would have enough 
measures to receive a payment adjustment under each possible scoring 
scenario under both the current and proposed weighting methodologies. 
Most of the HHAs that would no longer receive a payment adjustment with 
the proposed changes in this rule are those with no claims or HHCAHPS 
measures. With only OASIS measures, these HHAs are more impacted by the 
proposal to remove the two immunization measures and the proposal to 
replace three OASIS functional measures with the two composite 
measures. The number of HHAs without claims or HHCAHPS measures that do 
not have enough measures to receive a payment adjustment would drop 
from 99 to 73 (a decrease of 26 HHAs), and the majority of the HHAs 
that would no longer have a payment adjustment would be smaller HHAs 
(16 of the 26 HHAs).
BILLING CODE 4120-01-P

[[Page 32503]]

<GRAPHIC><TIFF>TP12JY18.010


[[Page 32504]]


<GRAPHIC><TIF1>TP12JY18.011


[[Page 32505]]


<GRAPHIC><TIF2>TP12JY18.012


[[Page 32506]]


<GRAPHIC><TIF3>TP12JY18.013

BILLING CODE 4120-01-C

[[Page 32507]]

3. HH QRP
    Failure to submit data required under section 1895(b)(3)(B)(v) of 
the Act with respect to a calendar year will result in the reduction of 
the annual home health market basket percentage increase otherwise 
applicable to a HHA for that calendar year by 2 percentage points. For 
the CY 2018 annual payment update determination, 1,311 of the 11,776 
active Medicare-certified HHAs, or approximately 11.1 percent, did not 
receive the full annual percentage increase. Information is not 
available to determine the precise number of HHAs that would not meet 
the requirements to receive the full annual percentage increase for the 
CY 2019 payment determination.
    As discussed in section V.E. of this proposed rule, we are 
proposing to remove seven measures from the HH QRP: Depression 
Assessment Conducted, Diabetic Foot Care and Patient/Caregiver 
Education Implemented during All Episodes of Care, Multifactor Fall 
Risk Assessment Conducted For All Patients Who Can Ambulate (NQF 
#0537), Pneumococcal Polysaccharide Vaccine Ever Received, Improvement 
in the Status of Surgical Wounds, Emergency Department Use without 
Hospital Readmission during the First 30 Days of HH (NQF #2505), 
Rehospitalization during the First 30 Days of HH (NQF #2380). All seven 
of these measures are proposed for removal starting with the CY 2021 HH 
QRP. As noted previously, section VII. of this proposed rule provides a 
detailed description of the net decrease in burden associated with 
these proposed changes in conjunction with the changes in burden that 
result from the proposed implementation of the PDGM for CY 2020. We 
estimate that the burden associated with OASIS item collection as a 
result of this proposed rule results in a net $60 million in annualized 
cost savings to HHAs, discounted at 7 percent relative to year 2016, 
over a perpetual time horizon beginning in CY 2020.
4. Home Infusion Therapy Payment
    The following analysis applies to the Temporary Transitional 
Payment for Home Infusion Therapy as set forth in section 1834(u)(7) of 
the Act, as added by section 50401 of the BBA of 2018 (Pub. L 115-123), 
and accordingly, describes the impact for CY 2019 only. Table 66 
represents the estimated increased costs of existing DME users 
currently using home infusion therapy services. We used CY 2017 data to 
identify beneficiaries with DME claims containing 1 of the 37 HCPCS 
codes identified in section 1834(u)(7)(C) of the Act, which are shown 
in column 2. In column 3, 2017 claims were again used to determine the 
total weeks of care, which is the sum of weeks of care across all 
beneficiaries found in each category. Weeks of care for payment 
categories 1 and 3 are defined as the week of the last infusion drug or 
pump claim minus the week of the first infusion drug or pump claim plus 
one. For Category 2, we used the median number of weeks of care, 47, as 
many patients use immune globulin for the whole year. Column four 
assumes the initial week of care requires two nurse visits, and all 
subsequent weeks only require one visit, in order to estimate the total 
visits of care per category. In general, nursing visits for payment 
category 2, subcutaneous immune globulin (SCIG) administration, occur 
once per month; therefore, we assume the estimated number of visits for 
these patients is 12. The fifth column multiplies the volume of nurse 
visits across beneficiaries by the payment rate (using the 2018 
Physician Fee Schedule amounts) in order to estimate the increased cost 
per each of the three infusion drug categories.\112\ In the CY 2019 HH 
PPS final rule, we will update this impact analysis using more complete 
2017 claims data (as of June 30, 2018 or later) and the CY 2019 
Physician Fee Schedule amounts.
---------------------------------------------------------------------------

    \112\ Based on the 2018 Medicare PFS these rates are $141.12 
($74.16 + 3 * $22.32) for Category 1, $224.28 ($176.76 + 3 * $15.84) 
for Category 2, and $239.76 ($144.72 + 3 * $31.68) for Category 3.

 Table 66--Estimated Increased Costs of Existing DME Home Infusion Patients Now Receiving Covered Home Infusion
                                            Therapy Services, CY 2019
----------------------------------------------------------------------------------------------------------------
                                                                     Estimated
        Payment category            Number of       Total weeks    total visits    2018  Payment     Estimated
                                  beneficiaries       of care         of care          rate            cost
----------------------------------------------------------------------------------------------------------------
1..............................            5,885         130,896         136,781         $141.12     $19,302,535
2..............................            6,315         236,470          75,780          224.28      16,995,938
3..............................            5,774          87,260          93,034          239.76      22,305,832
                                --------------------------------------------------------------------------------
    Total......................           17,974  ..............  ..............  ..............      58,604,305
----------------------------------------------------------------------------------------------------------------

    Table 67 displays the estimated regional impacts using the 
beneficiary enrollment address reported in the Medicare Master 
Beneficiary Summary File. Table 68 displays impacts based on rural or 
urban designations. All beneficiaries identified had at least one 
applicable home infusion claim (claims with 1 of the 37 drug codes 
listed in section 1834(u)(7)(C) of the Act) in CY 2017. Unknown 
beneficiaries were those without valid state and county information in 
the Master Beneficiary Summary File. Additionally, the tables provide 
the estimated impacts by drug category.

                 Table 67--Estimated Impacts of the Temporary Transitional Payment for Home Infusion Therapy Services by Region, CY 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of home
                      Census Region                        infusion patients      Category 1         Category 2         Category 3           Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
New England..............................................                719      $1,030,740.48        $866,617.92       $$263,496.24      $2,160,854.64
Mid Atlantic.............................................              3,503       2,699,343.36       1,582,519.68       8,670,920.40      12,952,783.44
East North Central.......................................              2,493       3,204,976.32       1,733,235.84       3,346,330.32       8,284,542.48
West North Central.......................................              1,296       1,192,605.12       1,351,062.72       1,644,034.32       4,187,702.16
South Atlantic...........................................              4,396       4,367,805.12       4,849,830.72       4,516,359.12      13,733,994.96
East South Central.......................................              1,201       1,330,761.60       1,544,840.64         668,690.64       3,544,292.88

[[Page 32508]]

 
West South Central.......................................              1,729       2,546,228.16       1,824,742.08         942,256.80       5,313,227.04
Mountain.................................................                847         978,949.44       1,404,889.92         281,957.76       2,665,797.12
Pacific..................................................              1,727       1,928,969.28       1,800,519.84       1,882,595.52       5,612,084.64
Other....................................................                 63          22,155.84          37,679.04          89,190.72         149,025.60
                                                          ----------------------------------------------------------------------------------------------
    Total................................................             17,974      19,302,534.72      16,995,938.40      22,305,831.84      58,604,304.96
--------------------------------------------------------------------------------------------------------------------------------------------------------


                Table 68--Estimated Urban/Rural Impacts of the Temporary Transitional Payment for Home Infusion Therapy Services, CY 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of home
                     CBSA Urban/rural                      infusion patients      Category 1         Category 2         Category 3           Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Urban....................................................             14,692     $15,906,058.56     $14,495,664.96     $17,419,762.80     $47,821,486.32
Rural....................................................              3,239       3,384,057.60       2,462,594.40       4,863,052.08      10,709,704.08
Unknown..................................................                 43          12,418.56          37,679.04          23,016.96          73,114.56
                                                          ----------------------------------------------------------------------------------------------
    Total................................................             17,974      19,302,534.72      16,995,938.40      22,305,831.84      58,604,304.96
--------------------------------------------------------------------------------------------------------------------------------------------------------

E. Alternatives Considered

1. HH PPS
a. HH PPS for CY 2019
    Section 1895(b)(3)(B) of the Act requires that the standard 
prospective payment amounts for CY 2019 be increased by a factor equal 
to the applicable HH market basket update for those HHAs that submit 
quality data as required by the Secretary. For CY 2019, Section 
1895(b)(3)(B)(vi) of the Act requires that the market basket update 
under the HHA prospective payment system be annually adjusted by 
changes in economy-wide productivity. The proposed 0.7 percentage point 
multifactor productivity adjustment to the proposed CY 2019 home health 
market basket update of 2.8 percent, is discussed in the preamble of 
this rule and is not discretionary as it is a requirement in section 
1895(b)(3)(B)(vi)(I) of the Act.
    We considered not rebasing the home health market basket. However, 
we believe that it is desirable to rebase the home health market basket 
periodically so that the cost category weights reflect changes in the 
mix of goods and services that HHAs purchase in furnishing home health 
care. In addition, we considered not implementing the proposed revision 
to the labor-related share of 76.1 percent in a budget neutral manner. 
However, we believe it is more prudent to implement the revision to the 
labor-related share in a manner that does not increase or decrease 
budgetary expenditures.
    With regards to payments made under the HH PPS for high-cost 
outlier episodes of care (that is, episodes of care with unusual 
variations in the type or amount of medically necessary care), we did 
not consider maintaining the current FDL ratio of 0.55. As discussed in 
section III.E.3. of this proposed rule, we propose to revise the FDL 
ratio to 0.51. Simulations using CY 2017 claims data and the proposed 
CY 2019 HH PPS payment rates resulted in an estimated 2.32 percent of 
total HH PPS payments being paid as outlier payments using the existing 
methodology for calculating the cost of an episode of care. The FDL 
ratio and the loss-sharing ratio must be selected so that the estimated 
outlier payments do not exceed the 2.5 percent of total HH PPS payments 
(as required by section 1895(b)(5)(A) of the Act). We did not consider 
proposing a change to the loss sharing ratio (0.80) in order for the HH 
PPS to remain consistent with payment for high-cost outliers in other 
Medicare payment systems (for example, IRF PPS, IPPS, etc.)
b. HH PPS for CY 2020 (PDGM)
    For CY 2020, we did not consider alternatives to changing the unit 
of payment from 60 days to 30 days, eliminating the use of therapy 
thresholds for the case-mix adjustment, and requiring the revised 
payments to be budget neutral. Section 51001 of the BBA of 2018 
requires the change in the unit of payment from 60 days to 30 days to 
be made in a budget neutral manner and mandates the elimination of the 
use of therapy thresholds for case-mix adjustment purposes. The BBA of 
2018 also requires these measures to be implemented on January 1, 2020 
and that we make assumptions about behavior changes that could occur as 
a result of the implementation of the 30-day unit of payment and as a 
result of the case-mix adjustment factors that are implemented in CY 
2020 in calculating a 30-day payment amount for CY 2020 in a budget 
neutral manner.
    Alternatives to making 19 current OASIS items (48 data elements) 
optional at the FU time point as outlined in section VII. of this 
proposed rule, would be to either not implement the case-mix adjustment 
methodology changes proposed under the PDGM or to continue collecting 
the 19 current OASIS items at the FU time point, even though they would 
not be used to case-mix adjust payments under the PDGM. Similarly, an 
alternative to adding collection of two current OASIS items (10 data 
elements) at the FU time point as discussed in section VII. of this 
proposed rule would be to either not adopt the PDGM or not to include 
the two current OASIS items (M1800 and M1033) as part of the case-mix 
adjustment methodology under the proposed PDGM. As noted previously, we 
did not consider not implementing the case-mix methodology changes 
under the proposed PDGM as a new case-mix adjustment methodology is 
required to be implemented in accordance with section 51001 of the BBA 
of 2018, which mandates the elimination of the use of therapy 
thresholds for case-mix adjustment purposes by January 1, 2020. We 
believe that continuing to require HHAs to report responses for the 19 
current OASIS items at the FU time point that are no longer needed for 
case-mix adjustment purposes under the PDGM results in unnecessary 
burden for HHAs.

[[Page 32509]]

While requiring HHAs to report responses for two current OASIS items at 
the FU time point results in a small increase in burden if CMS were to 
not make 19 current OASIS items optional at the FU time point, those 
two OASIS items (M1800 and M1033) are correlated with increases in 
resource use and are used to determine the patient's functional 
impairment level under the HHGM, thus they are important for case-mix 
adjustment purposes in order to ensure accurate payments to HHAs under 
the proposed PDGM.
    We considered whether to continue using the wage-weighted minutes 
of care (WWMC) approach to estimate resource use under the PDGM, as 
described in section III.F.2. of this proposed rule. Although the 
relationship in relative costs between the WWMC approach and the 
proposed cost-per-minute plus non-routine supplies (CPM + NRS) approach 
is very similar (correlation coefficient equal to 0.8512), the WWMC 
approach does not as evenly weight skilled nursing costs relative to 
therapy costs as evidenced in the cost report data and would require us 
to maintain a separate case-mix adjustment mechanism for NRS. If we 
were to maintain the current WWMC approach, skilled nursing and therapy 
costs would not be as evenly weighted and a certain level of complexity 
in calculating payments under the HH PPS would persist as we would need 
to continue with the current method of case-mix adjusting NRS payments 
separate from service costs (that is, skilled nursing, physical 
therapy, occupational therapy, speech-language pathology, home health 
aide, and medical social services) under the HH PPS.
    In this proposed rule and to begin in CY 2020, we considered 
proposing a phase-out of the split percentage payment approach by 
reducing the percentage of the upfront payment over a period of time 
and requiring a notice of admission (NOA) to be submitted upon full 
elimination of the split-percentage payment. However, we wanted to take 
the opportunity in this year's rule to more clearly signal our intent 
to potentially eliminate the split percentage payment approach over 
time as a reduced timeframe for the unit of payment (30 days rather 
than 60 days) is now required in statute. Given that existing HHAs 
(certified with effective dates prior to January 1, 2019) would need to 
adapt to changes in cash flow with the elimination of the split 
percentage payment approach, we hope to receive additional feedback on 
the timeframes for a phase-out of the split percentage payment approach 
and whether there is a need for an NOA upon completion of a phase-out 
of the split percentage payment approach that we can take into 
consideration for potential future rulemaking.
2. HHVBP Model
    An alternative to our proposal to remove the two vaccination 
measures beginning with PY 4 would be to continue to include them in 
the applicable measure set.
    An alternative to our proposal to replace three OASIS-based 
measures with two proposed composite measures would be to make no 
changes to the OASIS-based measures category.
    Another alternative to this proposal would be to finalize one but 
not both composite measures. All three of the ADL measures that would 
be replaced (Improvement in Bathing, Improvement in Bed Transferring, 
Improvement in Ambulation-Locomotion) relate to the normalized change 
in self-care measure, so, if only the self-care measure were adopted it 
would replace the three individual ADL items and count for 30 points. 
If only the mobility composite measure were adopted, however, it would 
count for 15 points and the three individual measures (which would not 
be dropped) would count for 5 points each. That would keep the relative 
points for the ADL measures at 30 no matter which option were adopted.
    An alternative to rescoring the maximum improvement points from 10 
points to 9 points would be to keep the current scoring methodology.
    An alternative to reweighting the OASIS-based, claims-based and 
HHCAHPS measure categories would be to keep the current equally 
weighted methodology.
3. HH QRP
    An alternative to removing seven measures from the HH QRP 
(Depression Assessment Conducted, Diabetic Foot Care and Patient/
Caregiver Education Implemented during All Episodes of Care, 
Multifactor Fall Risk Assessment Conducted For All Patients Who Can 
Ambulate (NQF #0537), Pneumococcal Polysaccharide Vaccine Ever 
Received, Improvement in the Status of Surgical Wounds, Emergency 
Department Use without Hospital Readmission during the First 30 Days of 
HH (NQF #2505), Rehospitalization during the First 30 Days of HH (NQF 
#2380)), as discussed in section V.E. of this proposed rule would be to 
retain these measures in the HH QRP.
4. Home Infusion Therapy
a. Health and Safety Standards
    We considered establishing additional requirements related to 
patient assessment, infection control and quality improvement. However, 
according to the home infusion therapy supplier industry, and our 
research, we believe there are already AO standards that include 
requirements related to patient assessment, quality improvement, and 
infection control. While the exact content of the AO standards vary, we 
believe that the standards are adequate to ensure basic patient health 
and safety.
b. Payment
    We did not consider alternatives to implementing the home infusion 
therapy benefit for CY 2019 and 2020 because section 1834(u)(7) of the 
Act requires the Secretary to provide a temporary transitional payment 
to eligible home infusion therapy suppliers for items and services 
associated with the furnishing of transitional home infusion drugs.
c. Accreditation of Qualified Home Infusion Therapy Suppliers
    AOs that accredit home infusion therapy suppliers must become 
accredited by an AO designated by the Secretary. In these options, we 
have attempted to minimize the burden of accreditation on home infusion 
therapy suppliers, which include approving home infusion therapy AOs 
that consider the unique needs of small home infusion therapy 
suppliers. Also, it is likely that the surveys of home infusion therapy 
suppliers would be performed as a desk review instead of an onsite 
survey. Doing a desk audit survey would prevent the travel time and 
cost that is required when the AO has to send a survey team to the home 
infusion therapy supplier's location to perform an onsite survey.

F. Accounting Statement and Tables

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars_a004_a-4), in Table 69, we have 
prepared an accounting statement showing the classification of the 
transfers and costs associated with the CY 2019 HH PPS provisions of 
this rule. For CY 2020, due to the section 51001(a) of the BBA of 2018 
requirement that the transition to the 30-day unit of payment be budget 
neutral, Table 70 displays a transfer of zero. Table 71 provides our 
best estimates of the changes to OASIS item collection as a result of 
the proposed implementation of the PDGM

[[Page 32510]]

and proposed changes to the HH QRP. Table 72 provides our best estimate 
of the increase in Medicare payments to home infusion therapy suppliers 
related to the temporary transitional payment for home infusion therapy 
in CY 2019. Table 73 provides our best estimate of cost of AO 
compliance with our proposed home infusion the Infusion Therapy 
requirements.

   Table 69--Accounting Statement: HH PPS Classification of Estimated
                     Transfers, From CY 2018 to 2019
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $400 million.
From Whom to Whom?........................  Federal Government to HHAs.
------------------------------------------------------------------------


   Table 70--Accounting Statement: HH PPS Classification of Estimated
     Transfers Due to the PDGM Proposals, From CY 2019 to 2020 PDGM
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $0 million.
From Whom to Whom?........................  HHAs to Federal Government.
------------------------------------------------------------------------


  Table 71--Accounting Statement: Classification of Estimated Costs of
             OASIS Item Collection, From CY 2019 to CY 2020
------------------------------------------------------------------------
                 Category                               Costs
------------------------------------------------------------------------
Annualized Monetized Net Burden for HHAs'   -$60 million
 Submission of the OASIS.
------------------------------------------------------------------------


 TABLE 72--Accounting Statement: Temporary Transitional Payment for Home
Infustion Therapy Classification of Estimated Transfers, From CY 2018 TO
                                  2019
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $60 million.
From Whom to Whom?........................  Federal Government to Home
                                             Infusion Therapy Suppliers.
------------------------------------------------------------------------


  Table 73--Accounting Statement: Classification of Estimated Costs for
  Home Infusion Therapy Accreditation Organizations, From CY 2019 to CY
                                  2020
------------------------------------------------------------------------
                        Category                               Costs
------------------------------------------------------------------------
Annualized Monetized Net Burden to Each Home Infusion           $23,258.
 Therapy AO for Compliance with the Proposed Regulations
 at Sec.  Sec.   488.1010 through 488.1050..............
------------------------------------------------------------------------

G. Regulatory Reform Analysis Under E.O. 13771

    Executive Order 13771, entitled ``Reducing Regulation and 
Controlling Regulatory Costs,'' was issued on January 30, 2017 and 
requires that the costs associated with significant new regulations 
``shall, to the extent permitted by law, be offset by the elimination 
of existing costs associated with at least two prior regulations.'' 
Details on the estimated costs of this proposed rule, including 
limitations on the ability thus far to quantify some categories of 
impacts, can be found in the rule's economic analysis. The 
determination of this proposed rule's status as a regulatory or 
deregulatory action for the purposes of Executive Order 13771 will be 
informed by comments received in response to this proposed rulemaking.

H. Conclusion

1. HH PPS
a. HH PPS for CY 2019
    In conclusion, we estimate that the net impact of the HH PPS 
policies in this rule is an increase of 2.1 percent, or $400 million, 
in Medicare payments to HHAs for CY 2019. The $400 million increase 
reflects the effects of the CY 2019 home health payment update of 2.1 
percent ($400 million increase), a 0.1 percent increase in payments due 
to decreasing the FDL ratio in order to target to pay no more than 2.5 
percent of total payments as outlier payments ($20 million increase), 
and a -0.1 percent decrease in CY 2019 payments due to the new rural 
add-on policy mandated by the BBA of 2018 ($20 million decrease).
b. HH PPS for CY 2020 (PDGM)
    In conclusion, we estimate that Medicare payments to HHAs for CY 
2020 will remain the same compared to CY 2019 as a result of the 
implementation of the PDGM. Section 51001(a) of the BBA of 2018 
requires the Secretary to implement the 30-day unit of payment in a 
budget-neutral manner.
2. OASIS Changes Related to the HH QRP and HH PPS (PDGM) for CY 2020
    In conclusion, we estimate that the changes to OASIS item 
collection as a result of the proposed changes to the HH QRP and the 
proposed changes to the HH PPS (PDGM), both effective on and after 
January 1, 2020, would result in a net $60 million in annualized cost 
savings, discounted at 7 percent relative to year 2016, over a 
perpetual time horizon beginning in CY 2020.
3. HHVBP Model
    In conclusion, we estimate there would be no net impact (to include 
either a net increase or reduction in payments) in this proposed rule 
in Medicare payments to HHAs competing in the HHVBP Model for CY 2019. 
However, the overall economic impact of the HHVBP Model is an estimated 
$378 million in total savings from a reduction in unnecessary 
hospitalizations and SNF usage as a result of greater quality 
improvements in the home health industry over the life of the HHVBP 
Model. We do not believe the changes proposed in this rule would affect 
the prior estimates.
4. Home Infusion Therapy
a. Health and Safety Standards
    In summary, the proposed health and safety standards would not have 
any economic impact on home infusion therapy suppliers or accreditation 
organizations.
b. Payment
    In conclusion, we estimate that the net impact of the temporary 
transitional payment to eligible home infusion suppliers for items and 
services associated with the furnishing of transitional home infusion 
drugs would result in approximately $60 million in additional Medicare 
payments to home infusion suppliers in CY 2019.
c. Accreditation of Qualified Home Infusion Therapy Suppliers
    In summary, AOs that accredit HIT suppliers must become accredited 
by an AO designated by the Secretary. In these options, we have 
attempted to minimize the burden of accreditation on HIT suppliers, 
which include approving AOs that consider the unique needs of small HIT 
suppliers. Also, it is likely that the surveys of HIT suppliers will be 
performed as a desk review instead of an onsite survey. Doing a desk 
audit survey would prevent the travel time and cost that is required 
when the AO has to send a survey team to the HIT

[[Page 32511]]

supplier's location to perform an onsite survey.
    This analysis, together with the remainder of this preamble, 
provides an initial Regulatory Flexibility Analysis.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 409

    Health facilities, Medicare.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, and Reporting and recordkeeping requirements.

42 CFR Part 484

    Health facilities, Health professions, Medicare, and Reporting and 
recordkeeping requirements.

42 CFR Part 486

    Grant programs-health, Health facilities, Medicare, Reporting and 
recordkeeping requirements, X-rays.

42 CFR Part 488

    Administrative practice and procedure, Health facilities, 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:

PART 409--HOSPITAL INSURANCE BENEFITS

0
1. The authority citation for part 409 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


Sec.  409.43   [Amended]

0
2. Section 409.43 is amended--
0
a. By removing paragraph (c)(2);
0
b. By resignating paragraphs (c)(3) and (4) as paragraphs (c)(2) and 
(3);
0
c. In newly redesignated paragraph (c)(2)(ii) by removing the phrase 
``for services is submitted for the final percentage prospective 
payment'' and adding in its place the phrase ``(for episodes beginning 
on or before December 31, 2019) or 30-day period (for periods beginning 
on or after January 1, 2020) is submitted''; and
0
d. In paragraph (e)(1)(iii) by removing the phrase ``during the 60-day 
episode'' and adding in its place the phrase ``within 60 days''.
0
3. Section 409.46 is amended by adding paragraph (e) to read as 
follows:


Sec.  409.46  Allowable administrative costs.

* * * * *
    (e) Remote patient monitoring. Remote patient monitoring is defined 
as the collection of physiologic data (for example, ECG, blood 
pressure, or glucose monitoring) digitally stored and transmitted by 
the patient or caregiver or both to the home health agency. If remote 
patient monitoring is used by the home health agency to augment the 
care planning process, the costs of the equipment and service related 
to this system are allowable administrative costs.

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
4. The authority citation for part 424 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).

0
5. Section 424.22 is amended by revising paragraphs (b)(2) and (c) to 
read as follows:


Sec.  424.22  Requirements for home health services.

* * * * *
    (b) * * *
    (2) Content and basis of recertification. As a condition for 
payment of home health services under Medicare Part A or Medicare Part 
B, if there is a continuing need for home health services, a physician 
must recertify the patient's continued eligibility for the home health 
benefit as outlined in sections 1814(a)(2)(C) and 1835(a)(2)(A) of the 
Act, as set forth in paragraph (a)(1) of this section, and as specified 
in paragraphs (b)(2)(i) and (ii) of this section.
    (i) Need for occupational therapy may be the basis for continuing 
services that were initiated because the individual needed skilled 
nursing care or physical therapy or speech therapy.
    (ii) If a patient's underlying condition or complication requires a 
registered nurse to ensure that essential non-skilled care is achieving 
its purpose, and necessitates a registered nurse be involved in the 
development, management, and evaluation of a patient's care plan, the 
physician must include a brief narrative describing the clinical 
justification of this need. If the narrative--
    (A) Is part of the recertification form, then the narrative must be 
located immediately prior to the physician's signature.
    (B) Exists as an addendum to the recertification form, in addition 
to the physician's signature on the recertification form, the physician 
must sign immediately following the narrative in the addendum.
    (c) Determining patient eligibility for Medicare home health 
services. (1) Documentation in the certifying physician's medical 
records or the acute/post-acute care facility's medical records (if the 
patient was directly admitted to home health) or both must be used as 
the basis for certification of the patient's eligibility for home 
health as described in paragraphs (a)(1) and (b) of this section. 
Documentation from the HHA may also be used to support-the basis for 
certification of home health eligibility, but only if the following 
requirements are met:
    (i) The documentation from the HHA can be corroborated by other 
medical record entries in the certifying physician's medical record for 
the patient or the acute/post-acute care facility's medical record for 
the patient or both, thereby creating a clinically consistent picture 
that the patient is eligible for Medicare home health services.
    (ii)(A) The certifying physician signs and dates the HHA 
documentation demonstrating that the documentation from the HHA was 
considered when certifying patient eligibility for Medicare home health 
services.
    (B) HHA documentation can include, but is not limited to, the 
patient's plan of care required under Sec.  409.43 of this chapter and 
the initial or comprehensive assessment of the patient required under 
Sec.  484.55 of this chapter.
    (2) The documentation must be provided upon request to review 
entities or CMS or both. If the documentation used as the basis for the 
certification of eligibility is not sufficient to demonstrate that the 
patient is or was eligible to receive services under the Medicare home 
health benefit, payment is not rendered for home health services 
provided.
* * * * *

PART 484--HOME HEALTH SERVICES

0
6. The authority citation for part 484 continues to read as follows:

    Authority:  Secs 1102 and 1871 of the Act (42 U.S.C. 1302 and 
1395(hh)) unless otherwise indicated.

0
7. Section 484.202 is amended by revising the definitions of ``Rural 
area'' and ``Urban area'' to read as follows:


Sec.  484.202  Definitions.

* * * * *
    Rural area means an area defined in Sec.  412.64(b)(1)(ii)(C) of 
this chapter.

[[Page 32512]]

    Urban area means an area defined in Sec.  412.64(b)(1)(ii)(A) and 
(B) of this chapter.
0
8. Section 484.205 is revised to read as follows:


Sec.  484.205  Basis of payment.

    (a) Method of payment. An HHA receives a national, standardized 
prospective payment amount for home health services previously paid on 
a reasonable cost basis (except the osteoporosis drug defined in 
section 1861(kk) of the Act) as of August 5, 1997. The national, 
standardized prospective payment is determined in accordance with Sec.  
484.215.
    (b) Unit of payment--(1) Episodes before December 31, 2019. For 
episodes beginning on or before December 31, 2019, an HHA receives a 
unit of payment equal to a national, standardized prospective 60-day 
episode payment amount.
    (2) Periods on or after January 1, 2020. For periods beginning on 
or after January 1, 2020, a HHA receives a unit of payment equal to a 
national, standardized prospective 30-day payment amount.
    (c) OASIS data. A HHA must submit to CMS the OASIS data described 
at Sec.  484.55(b) and (d) in order for CMS to administer the payment 
rate methodologies described in Sec. Sec.  484.215, 484.220, 484. 230, 
484.235, and 484.240.
    (d) Payment adjustments. The national, standardized prospective 
payment amount represents payment in full for all costs associated with 
furnishing home health services and is subject to the following 
adjustments and additional payments:
    (1) A low-utilization payment adjustment (LUPA) of a predetermined 
per-visit rate as specified in Sec.  484.230.
    (2) A partial payment adjustment as specified in Sec.  484.235.
    (3) An outlier payment as specified in Sec.  484.240.
    (e) Medical review. All payments under this system may be subject 
to a medical review adjustment reflecting the following:
    (1) Beneficiary eligibility.
    (2) Medical necessity determinations.
    (3) Case-mix group assignment.
    (f) Durable medical equipment (DME) and disposable devices. DME 
provided as a home health service as defined in section 1861(m) of the 
Act is paid the fee schedule amount. Separate payment is made for 
``furnishing NPWT using a disposable device,'' as that term is defined 
in Sec.  484.202, and is not included in the national, standardized 
prospective payment.
    (g) Split percentage payments. Normally, there are two payments 
(initial and final) paid for an HH PPS unit of payment. The initial 
payment is made in response to a request for anticipated payment (RAP) 
as described in paragraph (h) of this section, and the residual final 
payment is made in response to the submission of a final claim. Split 
percentage payments are made in accordance with requirements at Sec.  
409.43(c) of this chapter.
    (1) Split percentage payments for episodes beginning on or before 
December 31, 2019--(i) Initial and residual final payments for initial 
episodes on or before December 31, 2019. (A) The initial payment for 
initial episodes is paid to an HHA at 60 percent of the case-mix and 
wage-adjusted 60-day episode rate.
    (B) The residual final payment for initial episodes is paid at 40 
percent of the case-mix and wage-adjusted 60-day episode rate.
    (ii) Initial and residual final payments for subsequent episodes 
before December 31, 2019. (A) The initial payment for subsequent 
episodes is paid to an HHA at 50 percent of the case-mix and wage-
adjusted 60-day episode rate.
    (B) The residual final payment for subsequent episodes is paid at 
50 percent of the case-mix and wage-adjusted 60-day episode rate.
    (2) Split percentage payments for periods beginning on or after 
January 1, 2020--(i) Initial and residual final payments for initial 
periods beginning on or after January 1, 2020. (A) The initial payment 
for initial 30-day periods is paid to an HHA at 60 percent of the case-
mix and wage-adjusted 30-day payment rate.
    (B) The residual final payment for initial 30-day periods is paid 
at 40 percent of the case-mix and wage-adjusted 30-day payment rate.
    (ii) Initial and residual final payments for subsequent periods 
beginning on or after January 1, 2020. (A) The initial payment for 
subsequent 30-day periods is paid to an HHA at 50 percent of the case-
mix and wage-adjusted 30-day payment rate.
    (B) The residual final payment for subsequent 30-day periods is 
paid at 50 percent of the case-mix and wage-adjusted 30-day payment 
rate.
    (iii) Split percentage payments on or after January 1, 2019. Split 
percentage payments are not made to HHAs that are certified for 
participation in Medicare effective on or after January 1, 2019. An HHA 
that is certified for participation in Medicare effective on or after 
January 1, 2019 receives a single payment for a 30-day period of care 
after the final claim is submitted.
    (h) Requests for anticipated payment (RAP). (1) HHAs that are 
certified for participation in Medicare effective by December 31, 2018 
submit requests for anticipated payment (RAPs) to request the initial 
split percentage payment as specified in paragraph (g) of this section. 
HHAs that are certified for participation in Medicare effective on or 
after January 1, 2019 are still required to submit RAPs although no 
split percentage payments are made in response to these RAP 
submissions. The HHA can submit a RAP when all of the following 
conditions are met:
    (i) After the OASIS assessment required at Sec.  484.55(b)(1) and 
(d) is complete, locked or export ready, or there is an agency-wide 
internal policy establishing the OASIS data is finalized for 
transmission to the national assessment system.
    (ii) Once a physician's verbal orders for home care have been 
received and documented as required at Sec. Sec.  484.60(b) and 
409.43(d) of this chapter.
    (iii) A plan of care has been established and sent to the physician 
as required at Sec.  409.43(c) of this chapter.
    (iv) The first service visit under that plan has been delivered.
    (2) A RAP is based on the physician signature requirements in Sec.  
409.43(c) of this chapter and is not a Medicare claim for purposes of 
the Act (although it is a ``claim'' for purposes of Federal, civil, 
criminal, and administrative law enforcement authorities, including but 
not limited to the following:
    (i) Civil Monetary Penalties Law (as defined in 42 U.S.C. 1320a-
7a(i)(2)).
    (ii) The Civil False Claims Act (as defined in 31 U.S.C. 3729(c)).
    (iii) The Criminal False Claims Act (18 U.S.C. 287)).
    (iv) The RAP is canceled and recovered unless the claim is 
submitted within the greater of 60 days from the end date of the 
appropriate unit of payment, as defined in paragraph (b) of this 
section, or 60 days from the issuance of the RAP.
    (3) CMS has the authority to reduce, disprove, or cancel a RAP in 
situations when protecting Medicare program integrity warrants this 
action.


Sec.  484.210   [Removed and Reserved]

0
9. Section 484.210 is removed and reserved.
0
10. Section 484.215 is amended--
0
a. By revising the section heading;
0
b. In paragraph (d) introductory text by removing the phrase ``CMS 
calculates the'' and adding in its place the phrase ``For episodes 
beginning on or before December 31, 2019, CMS calculates the''; and
0
c. By adding paragraph (f).
    The revisions and addition reads as follows:

[[Page 32513]]

Sec.  484.215  Initial establishment of the calculation of the 
national, standardized prospective payment rates.

* * * * *
    (f) For periods beginning on or after January 1, 2020, a national, 
standardized prospective 30-day payment rate applies. The national, 
standardized prospective 30-day payment rate is an amount determined by 
the Secretary, as subsequently adjusted in accordance with Sec.  
484.225.
0
11. Section 484.220 is amended--
0
a. By revising the section heading and introductory text; and
0
b. In paragraph (a) introductory text by removing the phrase ``national 
prospective 60-day episode'' and adding in its place the phrase 
``national, standardized prospective''.
    The revisions read as follows:


Sec.  484.220  Calculation of the case-mix and wage area adjusted 
prospective payment rates.

    CMS adjusts the national, standardized prospective payment rates as 
referenced in Sec.  484.215 to account for the following:
* * * * *
0
12. Section 484.225 is amended--
0
a. By revising the section heading and paragraph (a);
0
b. In paragraphs (b) and (c) by removing the phrase ``national 
prospective 60-day episode'' and adding in its place the phrase 
``national, standardized prospective''; and
0
c. By adding paragraph (d).
    The revisions and addition reads as follows:


Sec.  484.225  Annual update of the unadjusted national, standardized 
prospective payment rates.

    (a) CMS annually updates the unadjusted national, standardized 
prospective payment rate on a calendar year basis (in accordance with 
section 1895(b)(1)(B) of the Act).
* * * * *
    (d) For CY 2020, the national, standardized prospective 30-day 
payment amount is an amount determined by the Secretary. CMS annually 
updates this amount on a calendar year basis in accordance with 
paragraphs (a) through (c) of this section.
0
13. Section 484.230 is revised to read as follows:


Sec.  [thinsp]484.230  Low-utilization payment adjustments.

    (a) For episodes beginning on or before December 31, 2019, an 
episode with four or fewer visits is paid the national per-visit amount 
by discipline determined in accordance with Sec.  484.215(a) and 
updated annually by the applicable market basket for each visit type, 
in accordance with Sec.  484.225.
    (1) The national per-visit amount is adjusted by the appropriate 
wage index based on the site of service of the beneficiary.
    (2) An amount is added to the low-utilization payment adjustments 
for low-utilization episodes that occur as the beneficiary's only 
episode or initial episode in a sequence of adjacent episodes.
    (3) For purposes of the home health PPS, a sequence of adjacent 
episodes for a beneficiary is a series of claims with no more than 60 
days without home care between the end of one episode, which is the 
60th day (except for episodes that have been PEP-adjusted), and the 
beginning of the next episode.
    (b) For periods beginning on or after January 1, 2020, an HHA 
receives a national 30-day payment of a predetermined rate for home 
health services, unless CMS determines at the end of the 30-day period 
that the HHA furnished minimal services to a patient during the 30-day 
period.
    (1) For each payment group used to case-mix adjust the 30-day 
payment rate, the 10th percentile value of total visits during a 30-day 
period of care is used to create payment group specific thresholds with 
a minimum threshold of at least 2 visits for each case-mix group.
    (2) A 30-day period with a total number of visits less than the 
threshold is paid the national per-visit amount by discipline 
determined in accordance with Sec.  484.215(a) and updated annually by 
the applicable market basket for each visit type, in accordance with 
Sec.  484.225.
    (3) The national per-visit amount is adjusted by the appropriate 
wage index based on the site of service for the beneficiary.
    (c) An amount is added to low-utilization payment adjustments for 
low-utilization periods that occur as the beneficiary's only 30-day 
period or initial 30-day period in a sequence of adjacent periods of 
care. For purposes of the home health PPS, a sequence of adjacent 
periods of care for a beneficiary is a series of claims with no more 
than 60 days without home care between the end of one period, which is 
the 30th day (except for episodes that have been partial payment 
adjusted), and the beginning of the next episode.
0
14. Section 484.235 is revised to read as follows:


Sec.  [thinsp]484.235  Partial payment adjustments.

    (a) Partial episode payments (PEPs) for episodes beginning on or 
before December 31, 2019. (1) An HHA receives a national, standardized 
60-day payment of a predetermined rate for home health services unless 
CMS determines an intervening event, defined as a beneficiary elected 
transfer or discharge with goals met or no expectation of return to 
home health and the beneficiary returned to home health during the 60-
day episode, warrants a new 60-day episode for purposes of payment. A 
start of care OASIS assessment and physician certification of the new 
plan of care are required.
    (2) The PEP adjustment does not apply in situations of transfers 
among HHAs of common ownership.
    (i) Those situations are considered services provided under 
arrangement on behalf of the originating HHA by the receiving HHA with 
the common ownership interest for the balance of the 60-day episode.
    (ii) The common ownership exception to the transfer PEP adjustment 
does not apply if the beneficiary moves to a different MSA or Non-MSA 
during the 60-day episode before the transfer to the receiving HHA.
    (iii) The transferring HHA in situations of common ownership not 
only serves as a billing agent, but must also exercise professional 
responsibility over the arranged-for services in order for services 
provided under arrangements to be paid.
    (3) If the intervening event warrants a new 60-day payment and a 
new physician certification and a new plan of care, the initial HHA 
receives a partial episode payment adjustment reflecting the length of 
time the patient remained under its care based on the first billable 
visit date through and including the last billable visit date. The PEP 
is calculated by determining the actual days served as a proportion of 
60 multiplied by the initial 60-day payment amount.
    (b) Partial payment adjustments for periods beginning on or after 
January 1, 2020. (1) An HHA receives a national, standardized 30-day 
payment of a predetermined rate for home health services unless CMS 
determines an intervening event, defined as a beneficiary elected 
transfer or discharge with goals met or no expectation of return to 
home health and the beneficiary returned to home health during the 30-
day period, warrants a new 30-day period for purposes of payment. A 
start of care OASIS assessment and physician certification of the new 
plan of care are required.
    (2) The partial payment adjustment does not apply in situations of 
transfers among HHAs of common ownership.
    (i) Those situations are considered services provided under 
arrangement on

[[Page 32514]]

behalf of the originating HHA by the receiving HHA with the common 
ownership interest for the balance of the 30-day period.
    (ii) The common ownership exception to the transfer partial payment 
adjustment does not apply if the beneficiary moves to a different MSA 
or Non-MSA during the 30-day period before the transfer to the 
receiving HHA.
    (iii) The transferring HHA in situations of common ownership not 
only serves as a billing agent, but must also exercise professional 
responsibility over the arranged-for services in order for services 
provided under arrangements to be paid.
    (3) If the intervening event warrants a new 30-day payment and a 
new physician certification and a new plan of care, the initial HHA 
receives a partial payment adjustment reflecting the length of time the 
patient remained under its care based on the first billable visit date 
through and including the last billable visit date. The partial payment 
is calculated by determining the actual days served as a proportion of 
30 multiplied by the initial 30-day payment amount.
0
15. Section 484.240 is revised to read as follows:


Sec.  [thinsp]484.240  Outlier payments.

    (a) For episodes beginning on or before December 31, 2019, an HHA 
receives an outlier payment for an episode whose estimated costs 
exceeds a threshold amount for each case-mix group. The outlier 
threshold for each case-mix group is the episode payment amount for 
that group, or the PEP adjustment amount for the episode, plus a fixed 
dollar loss amount that is the same for all case-mix groups.
    (b) For periods beginning on or after January 1, 2020, an HHA 
receives an outlier payment for a 30-day period whose estimated cost 
exceeds a threshold amount for each case-mix group. The outlier 
threshold for each case-mix group is the 30-day payment amount for that 
group, or the partial payment adjustment amount for the 30-day period, 
plus a fixed dollar loss amount that is the same for all case-mix 
groups.
    (c) The outlier payment is a proportion of the amount of imputed 
cost beyond the threshold.
    (d) CMS imputes the cost for each claim by multiplying the national 
per-15 minute unit amount of each discipline by the number of 15 minute 
units in the discipline and computing the total imputed cost for all 
disciplines.
0
16. Section 484.250 is amended by revising paragraph (a)(1) to read as 
follows:


Sec.  484.250  Patient assessment data.

    (a) * * *
    (1) Such OASIS data described at Sec.  484.55(b) and (d) as is 
necessary for CMS to administer the payment rate methodologies 
described in Sec. Sec.  484.215, 484.220, 484.230, 484.235, and 
484.240; and such OASIS data described at Sec.  484.55(b) and (d) as is 
necessary to meet the quality reporting requirements of section 
1895(b)(3)(B)(v) of the Act.
* * * * *
0
17. Section 484.320 is amended by revising paragraph (c) to read as 
follows:


Sec.  484.320  Calculation of the Total Performance Score.

* * * * *
    (c)(1) For performance years 1 through 3, CMS will sum all points 
awarded for each applicable measure excluding the New Measures, 
weighted equally at the individual measure level to calculate a value 
worth 90 percent of the Total Performance Score.
    (2) For performance years 4 and 5, CMS will sum all points awarded 
for each applicable measure within each category of measures (OASIS-
based, claims-based and HHCAHPs) excluding the New Measures, weighted 
at 35 percent for the OASIS-based measure category, 35 percent for the 
claims-based measure category, and 30 percent for the HHCAHPS measure 
category when all three measure categories are reported, to calculate a 
value worth 90 percent of the Total Performance Score.
* * * * *

PART 486--CONDITIONS FOR COVERAGE OF SPECIALIZED SERVICES FURNISHED 
BY SUPPLIERS

0
18. The authority citation for part 486 is revised to read as follows:

    Authority: 42 U.S.C. 1302, and 1395hh.

0
19. Add reserved subpart H and subpart I to read as follows:

Subpart H--[Reserved]

Subpart I--Requirements for Home Infusion Therapy Suppliers

General Provisions

Sec.
486.500 Basis and Scope.
486.505 Definitions.

Standards for Home Infusion Therapy

486.520 Plan of care.
486.525 Required services.

Subpart I--Requirements for Home Infusion Therapy Suppliers

General Provisions


Sec.  486.500  Basis and scope.

    Section 1861(s)(2)(iii) of the Act requires the Secretary to 
establish the conditions that home infusion therapy suppliers must meet 
in order to participate in the Medicare program and which are 
considered necessary to ensure the health and safety of patients.


Sec.  486.505  Definitions.

    Applicable provider means a physician, a nurse provider, and a 
physician assistant.
    Home means a place of residence used as the home of an individual, 
including an institution that is used as a home. An institution that is 
used as a home may not be a hospital, CAH, or SNF as defined in section 
1861(e)(1), 1861(mm)(1), or 1819(a)(1) of the Act, respectively.
    Home infusion drug means a parental drug or biological administered 
intravenously, or subcutaneously for an administration period of 15 
minutes or more, in the home of an individual through a pump that is an 
item of durable medical equipment. The term does not include insulin 
pump systems or a self-administered drug or biological on a self-
administered drug exclusion list.
    Infusion drug administration calendar day means the day on which 
home infusion therapy services are furnished by skilled professionals 
in the individual's home on the day of infusion drug administration. 
The skilled services provided on such day must be so inherently complex 
that they can only be safely and effectively performed by, or under the 
supervision of, professional or technical personnel.
    Qualified home infusion therapy supplier means a supplier of home 
infusion therapy that meets the all of the following criteria which are 
set forth at section 1861(iii)(3)(D)(i) of the Act:
    (1) Furnishes infusion therapy to individuals with acute or chronic 
conditions requiring administration of home infusion drugs.
    (2) Ensures the safe and effective provision and administration of 
home infusion therapy on a 7-day-a-week, 24-hour-a-day basis.
    (3) Is accredited by an organization designated by the Secretary in 
accordance with section 1834(u)(5) of the Act.
    (4) Meets such other requirements as the Secretary determines 
appropriate.

[[Page 32515]]

Standards for Home Infusion Therapy


Sec.  486.520  Plan of care.

    The qualified home infusion therapy supplier ensures the following:
    (a) All patients must be under the care of an applicable provider.
    (b) All patients must have a plan of care established by a 
physician that prescribes the type, amount, and duration of the home 
infusion therapy services that are to be furnished.
    (c) The plan of care for each patient must be periodically reviewed 
by the physician.


Sec.  486.525  Required services.

    The qualified home infusion therapy supplier must provide the 
following services on a 7-day-a-week, 24-hour-a-day basis in accordance 
with the plan of care:
    (a) Professional services, including nursing services.
    (b) Patient training and education not otherwise paid for as 
durable medical equipment as described in Sec.  424.57(c)(12) of this 
chapter.
    (c) Remote monitoring and monitoring services for the provision of 
home infusion therapy services and home infusion drugs.

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
20. The authority citation for part 488 is revised to read as follows:

    Authority: 42 U.S.C. 1302, and 1395hh.

0
21. Section 488.5 is amended--
0
a. By redesignating paragraphs (a)(7) through (21) as paragraphs (a)(8) 
through (22);
0
b. By adding a new paragraph (a)(7);
0
c. In newly redesignated paragraph (a)(18)(i) by removing the word 
``and'' at the end of the paragraph;
0
d. In newly redesignated paragraph (a)(18)(ii) by removing the period 
and adding in its place ``; and''; and
0
e. By adding paragraph (a)(18)(iii).
    The additions read as follows:


Sec.  488.5  Application and re-application procedures for national 
accrediting organizations.

    (a) * * *
    (7) A statement acknowledging that all accrediting organization 
surveyors have completed or will complete the relevant program specific 
CMS online trainings established for state surveyors, initially, and 
thereafter.
* * * * *
    (18) * * *
    (iii) Include a written statement that if a fully accredited and 
deemed facility in good standing provides written notification that 
they wish to voluntarily withdraw from the accrediting organization's 
CMS-approved accreditation program, the accrediting organization must 
continue the facility's current accreditation in full force and effect 
until the effective date of withdrawal identified by the facility or 
the expiration date of the term of accreditation, whichever comes 
first.
* * * * *
0
22. Add reserved subpart K and subpart L to read as follows:

Subpart K--[Reserved]

Subpart L--Accreditation of Home Infusion Therapy Suppliers

General Provisions

Sec.
488.1000 Basis and scope.
488.1005 Definitions.

Approval and Oversight of Home Infusion Therapy Supplier Accrediting 
Organizations

488.1010 Application and reapplication procedures for national home 
infusion therapy accrediting organizations.
488.1015 Resubmitting a request for reapproval.
488.1020 Public notice and comment.
488.1025 Release and use of home infusion therapy accreditation 
surveys.
488.1030 Ongoing review of home infusion therapy accrediting 
organizations.
488.1035 Ongoing responsibilities of a CMS-approved home infusion 
therapy accreditation organization.
488.1040 Onsite observations of home infusion therapy accrediting 
organization operations.
488.1045 Voluntary and involuntary termination.
488.1050 Reconsideration.

Subpart L--Accreditation of Home Infusion Therapy Suppliers

General Provisions


Sec.  488.1000  Basis and scope.

    (a) Regulatory basis for home infusion therapy services. The home 
infusion therapy health and safety regulations are codified at part 
486, subpart L, of this chapter.
    (b) Statutory basis for the accreditation of home infusion therapy 
suppliers. (1) Sections 1102 and 1871 of the Act require that the 
Secretary prescribe such regulations as may be necessary to carry out 
the administration of the Medicare program.
    (2) Section 1834(u)(5) of the Act require the Secretary to 
designate and approve independent organizations for the purposes of 
accrediting qualified home infusion therapy suppliers.
    (c) Scope. This subpart sets forth the following:
    (1) Application and reapplication procedures for national 
accrediting organizations seeking approval or re-approval of authority 
to accredit qualified home infusion therapy suppliers.
    (2) Ongoing CMS oversight processes for approved accrediting 
organizations that accredit qualified home infusion therapy suppliers.
    (3) Appeal procedures for accrediting organizations that accredit 
qualified home infusion therapy suppliers.


Sec.  488.1005  Definitions.

    As used in this subpart--
    Immediate jeopardy means a situation in which the provider's or 
supplier's non-compliance with one or more Medicare accreditation 
requirements has caused, or is likely to cause, serious injury, harm, 
impairment, or death to a patient.
    National accrediting organization means an organization that 
accredits provider or supplier entities under a specific program and 
whose accredited provider or supplier entities under each program are 
widely dispersed geographically across the United States. In addition, 
the specific program is active, fully implemented, and operational.
    National in scope means a program is fully implemented, 
operational, and widely dispersed geographically throughout the 
country.
    Qualified home infusion therapy supplier means a supplier of home 
infusion therapy that meets the all of the following criteria which are 
set forth at section 1861(iii)(3)(D)(i) of the Act:
    (1) Furnishes infusion therapy to individuals with acute or chronic 
conditions requiring administration of home infusion drugs.
    (2) Ensures the safe and effective provision and administration of 
home infusion therapy on a 7-day-a-week, 24-hour-a-day basis.
    (3) Is accredited by an organization designated by the Secretary in 
accordance with section 1834(u)(5) of the Act.
    (4) Meets such other requirements as the Secretary determines 
appropriate.
    Reasonable assurance means an accrediting organization has 
demonstrated to CMS' satisfaction that its accreditation program 
requirements meet or exceed the Medicare program requirements.
    Rural area as defined at section 1886(d)(2)(D) of the Act.
    Substantial allegation of non-compliance means a complaint from any 
of a variety of sources (such as patient, relative, or third party), 
including complaints submitted in person, by telephone, through written 
correspondence, or in the newspaper, magazine articles or other media, 
that

[[Page 32516]]

would, if found to be present, adversely affect the health and safety 
of patients and raises doubts as to a qualified home infusion therapy 
supplier's compliance with the applicable Medicare accreditation 
requirements.

Approval and Oversight of Home Infusion Therapy Supplier Accrediting 
Organizations


Sec.  488.1010  Application and reapplication procedures for national 
accrediting organizations.

    (a) Information submitted with application. A national home 
infusion therapy accrediting organization applying to CMS for approval 
or re-approval of a designated home infusion therapy accreditation 
program must furnish CMS with information and materials that 
demonstrate that its home infusion therapy accreditation program 
requirements meet or exceed the applicable Medicare requirements for 
accrediting organizations, including the following:
    (1) Documentation that demonstrates the organization meets the 
definition of a national accrediting organization under Sec.  488.1005 
as it relates to the accreditation program.
    (2) The Medicare provider or supplier type for which the 
organization is requesting approval or re-approval.
    (3) Documentation that demonstrates the home infusion therapy 
accrediting organization's ability to take into account the capacities 
of rural home infusion therapy suppliers (as required by section 
1834(u)(5)(A)(ii) of the Act).
    (4) Information that demonstrates the home infusion therapy 
accrediting organization's knowledge, expertise, and experience in home 
infusion therapy.
    (5) A detailed crosswalk (in table format) that identifies, for 
each of the applicable Medicare requirements, the exact language of the 
organization's comparable accreditation requirements and standards.
    (6) A detailed description of the home infusion therapy accrediting 
organization's survey processes to confirm that a home infusion therapy 
supplier's processes are comparable to those of Medicare. This 
description must include all of the following:
    (i) The types and frequency of surveys performed, and a rationale 
for which accreditation requirements will be evaluated via onsite 
surveys and which will be evaluated via offsite audits, or other 
strategies for ensuring accredited home infusion therapy suppliers 
maintain adherence to the home infusion therapy accreditation program 
requirements, including an explanation of how the accrediting 
organization will maintain the schedule it proposes.
    (ii) Copies of the home infusion therapy accrediting organizations 
survey and audit forms, guidelines, and instructions to surveyors.
    (iii) Documentation demonstrating that the home infusion therapy 
accrediting organization's onsite survey or offsite audit reports 
identify, for each finding of non-compliance with accreditation 
standards, the comparable Medicare home infusion therapy accreditation 
requirements, as applicable.
    (iv) A description of the home infusion therapy accrediting 
organization's accreditation survey review process.
    (v) A description of the home infusion therapy accrediting 
organization's procedures and timelines for notifying a surveyed or 
audited home infusion therapy supplier of non-compliance with the home 
infusion therapy accreditation program's standards.
    (vi) A description of the home infusion therapy accrediting 
organization's procedures and timelines for monitoring the home 
infusion therapy supplier's correction of identified non-compliance 
with the accreditation program's standards.
    (vii) The ability of the home infusion therapy accrediting 
organization to conduct timely reviews of accreditation applications.
    (viii) A statement acknowledging that, as a condition for CMS 
approval of a national accrediting organization's accreditation 
program, the home infusion therapy accrediting organization agrees to 
provide CMS with information extracted from each home infusion therapy 
accreditation onsite survey, offsite audit or other evaluation 
strategies as part of its data submissions required under paragraph 
(a)(19) of this section, and, upon request from CMS, a copy of the most 
recent accreditation onsite survey, offsite audit, or other evaluation 
strategy together with any other information related to the survey as 
CMS may require (including corrective action plans).
    (ix) A statement acknowledging that the home infusion therapy 
accrediting organization will provide timely notification to CMS when 
an accreditation survey or complaint investigation identifies an 
immediate jeopardy as that term is defined at Sec.  488.1005. Using the 
format specified by CMS, the home infusion therapy accrediting 
organization must notify CMS within 2 business days from the date the 
accrediting organization identifies the immediate jeopardy.
    (7) Procedures to ensure that--
    (i) Unannounced onsite surveys, as appropriate, will be conducted 
periodically, including procedures that protect against unannounced 
surveys becoming known to the provider or supplier in advance of the 
visit; or
    (ii) Offsite survey audits are performed to evaluate the quality of 
services provided which may be followed up with periodic onsite visits.
    (8) The criteria for determining the size and composition of the 
home infusion therapy accrediting organization's survey, audit and 
other evaluation strategy teams for individual supplier onsite surveys. 
The home infusion therapy accrediting organization's criteria should 
include, but not be limited to the following information:
    (i) The expected number of individual home infusion therapy 
supplier locations to be surveyed using an onsite survey.
    (ii) The number of home infusion therapy suppliers to be surveyed 
using off-site audits.
    (iii) A description of other types of home infusion therapy 
accreditation review activities to be used.
    (iv) The reasons for each type of survey (that is, initial 
accreditation survey, reaccreditation survey, and complaint survey).
    (9) The overall adequacy of the number of the home infusion therapy 
accrediting organization's surveyors, auditors, and other staff 
available to perform survey related activities, including how the 
organization will increase the size of the survey, audit, and other 
evaluation staff to match growth in the number of accredited facilities 
or programs while maintaining re-accreditation intervals for existing 
accredited facilities or programs.
    (10) Detailed information about the individuals who perform onsite 
surveys, offsite audits or other strategies for ensuring accredited 
home infusion therapy suppliers maintain adherence to the home infusion 
therapy accreditation program requirements, including all of the 
following information:
    (i) The number and types of professional and technical staff 
available for conducting onsite surveys, offsite audits, or other 
strategies for ensuring accredited home infusion therapy suppliers 
maintain adherence to the home infusion therapy accreditation program 
requirements.
    (ii) The education, employment, and experience requirements 
surveyors and auditors must meet.
    (iii) The content and length of the orientation program.

[[Page 32517]]

    (11) The content, frequency and types of in-service training 
provided to survey and audit personnel.
    (12) The evaluation systems used to monitor the performance of 
individual surveyors, auditors and survey teams.
    (13) The home infusion therapy accrediting organization's policies 
and procedures to avoid conflicts of interest, including the appearance 
of conflicts of interest, involving individuals who conduct surveys, 
audits or participate in accreditation decisions.
    (14) The policies and procedures used when a home infusion therapy 
supplier has a dispute regarding survey or audit findings, or an 
adverse decision.
    (15) Procedures for the home infusion therapy supplier to use to 
notify the home infusion therapy accrediting organization when the 
accredited home infusion therapy supplier does the either of the 
following:
    (i) Removes or ceases furnishing services for which they are 
accredited.
    (ii) Adds services for which they are not accredited.
    (16) The home infusion therapy accrediting organization's 
procedures for responding to, and investigating complaints against 
accredited facilities, including policies and procedures regarding 
referrals, when applicable, to appropriate licensing bodies, ombudsmen 
offices, and CMS.
    (17) A description of the home infusion therapy accrediting 
organization's accreditation status decision-making process. The home 
infusion therapy accrediting organization must furnish the following:
    (i) Its process for addressing deficiencies identified with 
accreditation program requirements, and the procedures used to monitor 
the correction of deficiencies identified during an accreditation 
survey and audit process.
    (ii) A description of all types and categories of accreditation 
decisions associated with the program, including the duration of each 
of the organization's accreditation decisions.
    (iii) Its policies and procedures for the granting, withholding or 
removal of accreditation status for facilities that fail to meet the 
accrediting organization's standards or requirements, assignment of 
less than full accreditation status or other actions taken by the 
organization in response to non-compliance with its standards and 
requirements.
    (iv) A statement acknowledging that the home infusion therapy 
accrediting organization agrees to notify CMS (in a manner CMS 
specifies) of any decision to revoke, terminate, or revise the 
accreditation status of a home infusion therapy supplier, within 3 
business days from the date the organization takes an action.
    (18) A list of all currently accredited home infusion therapy 
suppliers, the type and category of accreditation, currently held by 
each, and the expiration date for each home infusion therapy supplier's 
current accreditation.
    (19) A schedule of all survey activity (such as onsite surveys, 
offsite audits and other types if survey strategies) expected to be 
conducted by the organization during the 6-month period following 
submission of an initial or renewal application.
    (20) A written presentation that demonstrates the organization's 
ability to furnish CMS with electronic data.
    (21) A description of the home infusion therapy accrediting 
organization's data management and analysis system with respect to its 
surveys and accreditation decisions, including all of the following:
    (i) A detailed description of how the home infusion therapy 
accrediting organization uses its data to assure the compliance of its 
home infusion therapy accreditation program with the Medicare home 
infusion therapy accreditation program requirements.
    (ii) A written statement acknowledging that the home infusion 
therapy accrediting organization agrees to submit timely, accurate, and 
complete data that CMS has determined is both necessary to evaluate the 
accrediting organization's performance and is not unduly burdensome for 
the accrediting organization to submit.
    (A) The organization must submit necessary data according to the 
instructions and timeframes CMS specifies.
    (B) Data to be submitted includes the following:
    (1) Accredited home infusion therapy supplier identifying 
information.
    (2) Survey findings.
    (3) Quality measures.
    (4) Notices of accreditation decisions.
    (22) The three most recent annual audited financial statements of 
the home infusion therapy accrediting organization that demonstrate 
that the organization's staffing, funding, and other resources are 
adequate to perform the required surveys, audits, and related 
activities to maintain the accreditation program.
    (23) A written statement acknowledging that, as a condition for 
approval, the home infusion therapy accrediting organization agrees to 
the following:
    (i) Voluntary termination. Provide written notification to CMS and 
all home infusion therapy suppliers accredited under its CMS-approved 
home infusion therapy accreditation program at least 90 calendar days 
in advance of the effective date of a decision by the home infusion 
therapy accrediting organization to voluntarily terminate its CMS-
approved home infusion therapy accreditation program and the 
implications for the suppliers' payment status once their current term 
of accreditation expires in accordance with the requirements at Sec.  
488.1045(a).
    (ii) Involuntary termination. Provide written notification to all 
accredited home infusion therapy suppliers accredited under its CMS-
approved home infusion therapy accreditation program no later than 30 
calendar days after the notice is published in the Federal Register 
announcing that CMS is withdrawing its approval of its accreditation 
program and the implications for the home infusion therapy supplier's 
payment status in accordance with the requirements at Sec.  488.1045(b) 
once their current term of accreditation expires.
    (A) For both voluntary and involuntary terminations, provide a 
second written notification to all accredited home infusion therapy 
suppliers 10 calendar days prior to the organization's accreditation 
program effective date of termination.
    (B) Notify CMS, in writing (electronically or hard copy), within 2 
business days of a deficiency identified in any accredited home 
infusion therapy supplier from any source where the deficiency poses an 
immediate jeopardy to the home infusion therapy supplier's 
beneficiaries or a hazard to the general public.
    (iii) Provide, on an annual basis, summary accreditation activity 
data and trends including the following:
    (A) Deficiencies.
    (B) Complaints.
    (C) Terminations.
    (D) Withdrawals.
    (E) Denials.
    (F) Accreditation decisions.
    (G) Other survey-related activities as specified by CMS.
    (iv) If CMS terminates a home infusion therapy accrediting 
organization's approved status, the home infusion therapy accrediting 
organization must work collaboratively with CMS to direct its 
accredited home infusion therapy suppliers to the remaining CMS-
approved accrediting organizations within a reasonable period of time.
    (v) Notify CMS at least 60 days in advance of the implementation 
date of any significant proposed changes in its CMS-approved home 
infusion therapy accreditation program and that it agrees not to 
implement the proposed changes

[[Page 32518]]

without prior written notice of continued program approval from CMS, 
except as provided for at Sec.  488.1040(b)(2).
    (vi) A statement acknowledging that, in response to a written 
notice from CMS to the home infusion therapy accrediting organization 
of a change in the applicable home infusion therapy accreditation 
requirements or survey process, the organization will provide CMS with 
proposed corresponding changes in the accrediting organization's home 
infusion therapy accreditation requirements for its CMS-approved home 
infusion therapy accreditation program to ensure that its accreditation 
standards continue to meet or exceed those of Medicare, or survey 
process remains comparable with that of Medicare. The home infusion 
therapy accrediting organization must comply with the following 
requirements:
    (A) The proposed changes must be submitted within 30 calendar days 
of the date of the written CMS notice to the home infusion therapy 
accrediting organization or by a date specified in the notice, 
whichever is later. CMS gives due consideration to a home infusion 
therapy accrediting organization's request for an extension of the 
deadline as long as it is submitted prior to the due date.
    (B) The proposed changes are not to be implemented without prior 
written notice of continued program approval from CMS, except as 
provided for at Sec.  488.1040(b)(2)(ii).
    (24) The organization's proposed fees for accreditation, including 
any plans for reducing the burden and cost of accreditation to small 
and rural suppliers.
    (b) Additional information needed. If CMS determines that 
additional information is necessary to make a determination for 
approval or denial of the home infusion therapy accrediting 
organization's initial application or re-application for CMS-approval 
of an accreditation program, CMS requires that the home infusion 
therapy accrediting organization submit any specific documentation 
requirements and attestations as a condition of approval of 
accreditation status. CMS notifies the home infusion therapy 
accrediting organization and afford it an opportunity to provide the 
additional information.
    (c) Withdrawing an application. A home infusion therapy accrediting 
organization may withdraw its initial application for CMS' approval of 
its home infusion therapy accreditation program at any time before CMS 
publishes the final notice described in Sec.  488.1025(b).
    (d) Notice of approval or disapproval of application. CMS sends a 
notice of its decision to approve or disapprove the home infusion 
therapy accrediting organization's application within 210 calendar days 
from the date CMS determines the home infusion therapy accrediting 
organization's application is complete. The final notice specifies the 
following:
    (1) The basis for the decision.
    (2) The effective date.
    (3) The term of the approval (not exceed 6 years).


Sec.  488.1015  Resubmitting a request for reapproval.

    (a) Except as provided in paragraph (b) of this section, a home 
infusion therapy accrediting organization whose request for CMS's 
approval or re-approval of an accreditation program has been denied, or 
a home infusion therapy accrediting organization that has voluntarily 
withdrawn an initial application, may resubmit its application if the 
home infusion therapy accrediting organization satisfies all of the 
following requirements:
    (1) Revises its home infusion therapy accreditation program to 
address the issues related to the denial of its previous request or its 
voluntary withdrawal.
    (2) Resubmits the application in its entirety.
    (b) If a home infusion therapy accrediting organization has 
requested, in accordance with Sec.  488.1050, a reconsideration of 
CMS's disapproval, it may not submit a new application for approval of 
a home infusion therapy accreditation program until such 
reconsideration is administratively final.


Sec.  488.1020  Public notice and comment.

    CMS publishes a notice in the Federal Register when the following 
conditions are met:
    (a) Proposed notice. CMS publishes a notice after the receipt of a 
completed application from a national home infusion therapy accrediting 
organization seeking CMS's approval of a home infusion therapy 
accreditation program. The notice identifies the home infusion therapy 
accrediting organization, the type of suppliers covered by the home 
infusion therapy accreditation program, and provides at least a 30 day 
public comment period (beginning on the date of publication).
    (b) Final notice. The final notice announces CMS decision to 
approve or deny a national accrediting organization application. The 
notice specifies the basis for the CMS decision.
    (1) Approval or re-approval. If CMS approves or re-approves the 
home infusion therapy accrediting organization's home infusion therapy 
accreditation program, the final notice at a minimum includes the 
following information:
    (i) A description of how the home infusion therapy accreditation 
program meets or exceeds Medicare home infusion therapy accreditation 
program requirements.
    (ii) The effective date of approval (no later than the publication 
date of the notice).
    (iii) The term of the approval (6 years or less).
    (2) Denial. If CMS does not approve the home infusion therapy 
accrediting organization's accreditation program, the final notice 
describes the following:
    (i) How the home infusion therapy accrediting organization fails to 
meet Medicare home infusion therapy accreditation program requirements.
    (ii) The effective date of the decision.


Sec.  488.1025  Release and use of home infusion therapy accreditation 
surveys.

    The home infusion therapy accrediting organization must include, in 
its accreditation agreement with each supplier, an acknowledgement that 
the supplier agrees to release to CMS a copy of its most current 
accreditation survey and any information related to the survey that CMS 
may require, corrective action plans.
    (a) CMS may determine that a home infusion therapy supplier does 
not meet the applicable Medicare conditions or requirements on the 
basis of its own investigation of the accreditation survey or any other 
information related to the survey.
    (b) With the exception of home health agency surveys, general 
disclosure of an accrediting organization's survey information is 
prohibited under section 1865(b) of the Act. CMS may publically 
disclose an accreditation survey and information related to the survey, 
upon written request, to the extent that the accreditation survey and 
survey information are related to an enforcement action taken by CMS.


Sec.  488.1030  Ongoing review of home infusion therapy accrediting 
organizations.

    (a) Performance review. CMS evaluates the performance of each CMS-
approved home infusion therapy accreditation program on an ongoing 
basis. This review includes the review of the following:
    (1) The home infusion therapy accrediting organization's survey 
activity.
    (2) The home infusion therapy accrediting organization's continued

[[Page 32519]]

fulfillment of the requirements at Sec. Sec.  488.1010 and 488.1035.
    (b) Comparability review. CMS assesses the equivalency of a home 
infusion therapy accrediting organization's CMS-approved program 
requirements with the comparable Medicare home infusion therapy 
accreditation requirements after CMS imposes new or revised Medicare 
accreditation requirements. When this occurs, the following takes 
place:
    (1) CMS provides the home infusion therapy accrediting 
organizations with written notice of the changes to the to the Medicare 
home infusion therapy accreditation requirements.
    (2) The home infusion therapy accrediting organization must make 
revisions to its home infusion therapy accreditation standards or 
survey processes which incorporate the new or revised Medicare 
accreditation requirements.
    (3) In the written notice, CMS specifies the deadline (no less than 
30 calendar days) by which the home infusion therapy accrediting 
organization must submit its proposed revised home infusion therapy 
accreditation standard or survey process revisions, and the 
timeframe(s) for implementation of these revised home infusion therapy 
accreditation standards.
    (4) CMS may extend the submission deadline by which the accrediting 
organization must submit its proposed revised home infusion therapy 
accreditation standards and survey processes, if both of the following 
occur:
    (i) The accrediting organization submits a written request for an 
extension of the submission deadline.
    (ii) The request for extension is submitted prior to the original 
submission deadline.
    (5) After completing the comparability review of the home infusion 
therapy accrediting organizations revised home infusion therapy 
accreditation standards and survey processes, CMS shall provide written 
notification to the home infusion therapy accrediting organization 
regarding whether or not its home infusion therapy accreditation 
program, including the proposed revised home infusion therapy 
accreditation standards and implementation timeframe(s), continues to 
meet or exceed all applicable Medicare requirements.
    (6) If, no later than 60 calendar days after receipt of the home 
infusion therapy accrediting organization's proposed changes, CMS does 
not provide the written notice to the home infusion therapy accrediting 
organization required, then the revised home infusion therapy 
accreditation standards and program is deemed to meet or exceed all 
applicable Medicare requirements and to have continued CMS-approval.
    (7) If a home infusion therapy accrediting organization is required 
to submit a new application because CMS imposes new home infusion 
therapy regulations or makes significant substantive revisions to the 
existing home infusion therapy regulations, CMS provides notice of the 
decision to approve or disapprove the new application submitted by the 
home infusion therapy accrediting organization within the time period 
specified in Sec.  488.1010(d).
    (8) If a home infusion therapy accrediting organization fails to 
submit its proposed changes to its home infusion therapy accreditation 
standards and survey processes within the required timeframe, or fails 
to implement the proposed changes that have been determined or deemed 
by CMS to be comparable, CMS may open an accreditation program review 
in accordance with paragraph (d) of this section.
    (c) Review of revised home infusion therapy accreditation standards 
submitted to CMS by an accrediting organization. When a home infusion 
therapy accrediting organization proposes to adopt new or revised 
accreditation standards, requirements or changes in its survey process, 
the home infusion therapy accrediting organization must do the 
following:
    (1) Provide CMS with written notice of any proposed changes in home 
infusion therapy accreditation standards, requirements or survey 
process at least 60 days prior to the proposed implementation date of 
the proposed changes.
    (2) Not implement any of the proposed changes before receiving 
CMS's approval, except as provided in paragraph (c)(4) of this section.
    (3) Provide written notice to CMS that includes all of the 
following:
    (i) A detailed description of the changes that are to be made to 
the organization's home infusion therapy accreditation standards, 
requirements and survey processes.
    (ii) A detailed crosswalk (in table format) that states the exact 
language of the organization's revised accreditation requirements and 
the applicable Medicare requirements for each.
    (4) CMS must provide a written notice to the home infusion therapy 
accrediting organization which states whether the home infusion therapy 
accreditation program, including the proposed revisions, continues or 
does not continue to meet or exceed all applicable Medicare home 
infusion therapy requirements within 60 days of receipt of the home 
infusion therapy accrediting organization's proposed changes. If CMS 
has made a finding that the home infusion therapy accrediting 
organization's home infusion therapy accreditation program, 
accreditation requirements and survey processes, including the proposed 
revisions does not continue to meet or exceed all applicable Medicare 
home infusion therapy requirements. CMS must state the reasons for 
these findings.
    (5) If, no later than 60 calendar days after receipt of the home 
infusion therapy accrediting organization's proposed changes, CMS does 
not provide written notice to the home infusion therapy accrediting 
organization that the home infusion therapy accreditation program, 
including the proposed revisions, continues or does not continue to 
meet or exceed all applicable Medicare home infusion therapy 
requirements, then the revised home infusion therapy accreditation 
program is deemed to meet or exceed all applicable Medicare home 
infusion therapy requirements and to have continued CMS approval.
    (6) If a home infusion therapy accrediting organization implements 
changes that have neither been determined nor deemed by CMS to be 
comparable to the applicable Medicare home infusion therapy 
requirements, CMS may open a home infusion therapy accreditation 
program review in accordance with paragraph (d) of this section.
    (d) CMS-approved home infusion therapy accreditation program 
review. If a comparability, performance, or standards review reveals 
evidence of substantial non-compliance of a home infusion therapy 
accrediting organization's CMS-approved home infusion therapy 
accreditation program with the requirements of this subpart, CMS may 
initiate a home infusion therapy accreditation program review.
    (1) If a home infusion therapy accreditation program review is 
initiated, CMS will provide written notice to the home infusion therapy 
accrediting organization indicating that its CMS-approved accreditation 
program approval may be in jeopardy and that a home infusion therapy 
accreditation program review is being initiated. The notice will 
provide all of the following information:
    (i) A statement of the instances, rates or patterns of non-
compliance identified, as well as other related information, if 
applicable.

[[Page 32520]]

    (ii) A description of the process to be followed during the review, 
including a description of the opportunities for the home infusion 
therapy accrediting organization to offer factual information related 
to CMS' findings.
    (iii) A description of the possible actions that may be imposed by 
CMS based on the findings of the home infusion therapy accreditation 
program review.
    (iv) The actions the home infusion therapy accrediting organization 
must take to address the identified deficiencies
    (v) The length of the accreditation program review probation 
period, which will include monitoring of the home infusion therapy 
accrediting organization's performance and implementation of the 
corrective action plan. The probation period is not to exceed 180 
calendar days from the date that CMS approves the AOs corrective action 
plan.
    (2) CMS will review and approve the home infusion therapy 
accrediting organization's plan of correction for acceptability within 
30 days after receipt.
    (3) CMS will monitor the AO's performance and implementation of the 
plan of correction during the probation period which is not to exceed 
180 days from the date of approval of the plan of correction.
    (4) If CMS determines, as a result of the home infusion therapy 
accreditation program review or a review of an application for renewal 
of the accrediting organizations existing CMS-approved home infusion 
therapy accreditation program, that the home infusion therapy 
accrediting organization has failed to meet any of the requirements of 
this subpart, CMS may place the home infusion therapy accrediting 
organization's CMS-approved home infusion therapy accreditation program 
on an additional probation period of up to 180 calendar days subsequent 
to the 180-day probation period described in paragraph (d)(1)(v) of 
this section to implement additional corrective actions or demonstrate 
sustained compliance, not to exceed the home infusion therapy 
accrediting organization's current term of approval. In the case of a 
renewal application where CMS has already placed the home infusion 
therapy accreditation program on probation, CMS indicates that any 
approval of the application is conditional while the program is placed 
on probation.
    (i) Within 60 calendar days after the end of any probationary 
period, CMS issues a written determination to the home infusion therapy 
accrediting organization as to whether or not its CMS-approved home 
infusion therapy accreditation program continues to meet the 
requirements of this subpart, including the reasons for the 
determination.
    (ii) If CMS determines that the home infusion therapy accrediting 
organization does not meet the requirements, CMS may withdraw approval 
of the CMS-approved home infusion therapy accreditation program. The 
notice of determination provided to the home infusion therapy 
accrediting organization includes notice of the removal of approval, 
reason for the removal, including the effective date determined in 
accordance with paragraph (d)(4)(iii) of this section.
    (iii) CMS publishes in the Federal Register a notice of its 
decision to withdraw approval of a CMS-approved accreditation program, 
including the reasons for the withdrawal, effective 60 calendar days 
after the date of publication of the notice.
    (e) Immediate jeopardy. If at any time CMS determines that the 
continued approval of a CMS-approved home infusion therapy 
accreditation program of any home infusion therapy accrediting 
organization poses an immediate jeopardy to the patients of the 
suppliers accredited under the program, or the continued approval 
otherwise constitutes a significant hazard to the public health, CMS 
may immediately withdraw the approval of a CMS-approved home infusion 
therapy accreditation program of that home infusion therapy accrediting 
organization and publish a notice of the removal, including the reasons 
for it, in the Federal Register.
    (f) Notification to home infusion therapy suppliers of withdrawal 
of CMS approval status. A home infusion therapy accrediting 
organization whose CMS approval of its home infusion therapy 
accreditation program has been withdrawn must notify each of its 
accredited home infusion therapy suppliers, in writing, of the 
withdrawal of CMS approval status no later than 30 calendar days after 
the notice is published in the Federal Register. The notification to 
the accredited home infusion therapy suppliers must inform them of the 
implications for their payment status once their current term of 
accreditation expires.


Sec.  488.1035  Ongoing responsibilities of a CMS-approved home 
infusion therapy accrediting organization.

    A home infusion therapy accreditation organization approved by CMS 
must carry out the following activities on an ongoing basis:
    (a) Provide CMS with all of the following in written format (either 
electronic or hard copy):
    (1) Copies of all home infusion therapy accreditation surveys, 
together with any survey-related information that CMS may require 
(including corrective action plans and summaries of findings with 
respect to unmet CMS requirements).
    (2) Notice of all accreditation decisions.
    (3) Notice of all complaints related to providers or suppliers.
    (4) Information about all home infusion therapy accredited 
suppliers against which the home infusion therapy accreditation 
organization has taken remedial or adverse action, including 
revocation, withdrawal, or revision of the providers or suppliers 
accreditation.
    (5) The home infusion therapy accrediting organization must 
provide, on an annual basis, summary data specified by CMS that relate 
to the past year's accreditation activities and trends.
    (6) Notice of any proposed changes in the home infusion therapy 
accrediting organization's accreditation standards or requirements or 
survey process. If the home infusion therapy accrediting organization 
implements the changes before or without CMS' approval, CMS may 
withdraw its approval of the accrediting organization.
    (b) Within 30 calendar days after a change in CMS requirements, the 
home infusion therapy accrediting organization must submit an 
acknowledgment of receipt of CMS' notification to CMS.
    (c) The home infusion therapy accrediting organization must permit 
its surveyors to serve as witnesses if CMS takes an adverse action 
based on accreditation findings.
    (d) Within 2 business days of identifying a deficiency of an 
accredited home infusion therapy supplier that poses immediate jeopardy 
to a beneficiary or to the general public, the home infusion therapy 
accrediting organization must provide CMS with written notice of the 
deficiency and any adverse action implemented by the accrediting 
organization.
    (e) Within 10 calendar days after CMS' notice to a CMS-approved 
home infusion therapy accrediting organization that CMS intends to 
withdraw approval of the home infusion therapy accrediting 
organization, the home infusion therapy accrediting organization must 
provide written notice of the withdrawal to all of the home infusion 
therapy accrediting organization's accredited suppliers.

[[Page 32521]]

Sec.  488.1040  Onsite observations of home infusion therapy 
accrediting organization operations.

    (a) As part of the application review process, the ongoing review 
process, or the continuing oversight of a home infusion therapy 
accrediting organization's performance, CMS may conduct onsite 
inspections of the home infusion therapy accrediting organization's 
operations and offices at any time to verify the home infusion therapy 
accrediting organization's representations and to assess the home 
infusion therapy accrediting organization's compliance with its own 
policies and procedures.
    (b) Activities to be performed by CMS staff during the onsite 
inspections may include, but are not limited to the following:
    (1) Interviews with various accrediting organization staff.
    (2) Review of documents, survey files, audit tools, and related 
records.
    (3) Observation of meetings concerning the home infusion therapy 
accreditation process.
    (4) Auditing meetings concerning the accreditation process.
    (5) Observation of in-progress surveys and audits.
    (6) Evaluation of the accrediting organization's survey results and 
accreditation decision-making process.


Sec.  488.1045  Voluntary and involuntary termination.

    (a) Voluntary termination by a CMS-approved accrediting program. In 
accordance with Sec.  488.1010(a)(23), a home infusion therapy 
accrediting organization that decides to voluntarily terminate its CMS-
approved home infusion therapy accreditation program must provide 
written notice at least 90 days in advance of the effective date of the 
termination to CMS and each of its accredited home infusion therapy 
suppliers.
    (b) Involuntary termination of an accrediting organization's 
approval by CMS. Once CMS publishes the notice in the Federal Register 
announcing its decision terminate the home infusion therapy accrediting 
organization's home infusion therapy accreditation program, the home 
infusion therapy accrediting organization must provide written 
notification to all suppliers accredited under its CMS-approved home 
infusion therapy accreditation program no later than 30 calendar days 
after the notice is published in the Federal Register announcing that 
CMS is withdrawing its approval of its home infusion therapy 
accreditation program and the implications for the home infusion 
therapy suppliers payment status in accordance with the requirements at 
Sec.  488.1010(f) once their current term of accreditation expires.
    (c) Voluntary and involuntary terminations. For both voluntary and 
involuntary terminations--
    (1) The accreditation status of affected home infusion therapy 
suppliers is considered to remain in effect until their current term of 
accreditation expires;
    (2) If the home infusion therapy supplier wishes to avoid a 
suspension of payment, it must provide written notice to CMS at least 
60-calendar days prior to its accreditation expiration date that it has 
submitted an application for home infusion therapy accreditation under 
another CMS-approved home infusion therapy accreditation program. 
Failure to comply with this 60-calendar day requirement prior to 
expiration of their current home infusion therapy accreditation 
stations within could result in a suspension of payment; and
    (3) The home infusion therapy accrediting organization provides a 
second written notification to all accredited home infusion therapy 
suppliers ten calendar days prior to the organization's accreditation 
program effective date of termination.
    (d) Voluntary withdrawal from accreditation requested by a home 
infusion therapy supplier. If a voluntary withdrawal from accreditation 
is requested by the home infusion therapy supplier, the withdrawal may 
not become effective until the accrediting organization completes all 
of the following steps:
    (1) The accrediting organization must contact the home infusion 
therapy supplier to seek written confirmation that the home infusion 
therapy supplier intends to voluntarily withdraw from the home infusion 
therapy accreditation program.
    (2) The home infusion therapy accrediting organization must advise 
the home infusion therapy supplier, in writing, of the statutory 
requirement for accreditation for all home infusion therapy suppliers 
and the possible payment consequences for a lapse in accreditation 
status.
    (3) The home infusion therapy accrediting organization must submit 
their final notice of the voluntary withdrawal of accreditation by the 
home infusion therapy supplier to CMS by 5 business days after the 
request for voluntary withdrawal is ultimately processed and effective.


Sec.  488.1050  Reconsideration.

    (a) General rule. A home infusion therapy accrediting organization 
dissatisfied with a determination that its home infusion therapy 
accreditation requirements do not provide or do not continue to provide 
reasonable assurance that the suppliers accredited by the home infusion 
therapy accrediting organization meet the applicable quality standards 
is entitled to reconsideration.
    (b) Filing requirements. (1) A written request for reconsideration 
must be filed within 30 calendar days of the receipt of CMS notice of 
an adverse determination or non-renewal.
    (2) The written request for reconsideration must specify the 
findings or issues with which the home infusion therapy accrediting 
organization disagrees and the reasons for the disagreement.
    (3) A requestor may withdraw its written request for 
reconsideration at any time before the issuance of a reconsideration 
determination.
    (c) CMS response to a request for reconsideration. In response to a 
request for reconsideration, CMS provides the accrediting organization 
with--
    (1) The opportunity for a hearing to be conducted by a hearing 
officer appointed by the Administrator of CMS and provide the 
accrediting organization the opportunity to present, in writing and in 
person, evidence or documentation to refute the determination to deny 
approval, or to withdraw or not renew designation; and
    (2) Written notice of the time and place of the hearing at least 10 
business days before the scheduled date.
    (d) Hearing requirements and rules. (1) The reconsideration hearing 
is a public hearing open to all of the following:
    (i) Authorized representatives and staff from CMS, including, but 
not limited to, the following:
    (A) Technical advisors (individuals with knowledge of the facts of 
the case or presenting interpretation of the facts).
    (B) Legal counsel.
    (C) Non-technical witnesses with personal knowledge of the facts of 
the case.
    (ii) Representatives from the accrediting organization requesting 
the reconsideration including, but not limited to, the following:
    (A) Authorized representatives and staff from the accrediting 
organization.
    (B) Technical advisors (individuals with knowledge of the facts of 
the case or presenting interpretation of the facts).
    (C) Legal counsel.
    (D) Non-technical witnesses, such as patients and family members 
that have personal knowledge of the facts of the case.
    (2) The hearing is conducted by the hearing officer who receives 
testimony and documents related to the proposed action.

[[Page 32522]]

    (3) Testimony and other evidence may be accepted by the hearing 
officer even though such evidence may be inadmissible under the Federal 
Rules of Civil Procedure.
    (4) The hearing officer does not have the authority to compel by 
subpoena the production of witnesses, papers, or other evidence.
    (5) Within 45 calendar days after the close of the hearing, the 
hearing officer will present the findings and recommendations to the 
accrediting organization that requested the reconsideration.
    (6) The written report of the hearing officer will include separate 
numbered findings of fact and the legal conclusions of the hearing 
officer.
    (7) The hearing officer's decision is final.

    Dated: June 25, 2018.
Seema Verma,
Administrator, Centers for Medicare and Medicaid Services.
    Dated: June 28, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2018-14443 Filed 7-2-18; 4:15 pm]
 BILLING CODE 4120-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>