[Federal Register Volume 87, Number 64 (Monday, April 4, 2022)]
[Proposed Rules]
[Pages 19442-19463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07030]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 418

[CMS-1773-P]
RIN 0938-AU83


Medicare Program; FY 2023 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule proposes to establish a permanent 
mitigation policy to smooth the impact of year-to-year changes in 
hospice payments related to changes in the hospice wage index. This 
rule also proposes updates to the hospice wage index, payment rates, 
and aggregate cap amount for Fiscal Year (FY) 2023. In addition, this 
rule proposes updates to the Hospice Quality Reporting Program (HQRP) 
including the Hospice Outcomes and Patient Evaluation tool; an update 
on Quality Measures (QMs) that will be in effect in FY 2023 for the 
HQRP and future QMs; updates on the Consumer Assessment of Healthcare 
Providers and Systems, Hospice Survey Mode Experiment, discusses a 
request for information (RFI) on health equity.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, by May 31, 2022.

ADDRESSES: In commenting, please refer to file code CMS-1773-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (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-1773-P, P.O. Box 8010, 
Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1773-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 questions about hospice 
payment policy, send your inquiry via email to: 
<a href="/cdn-cgi/l/email-protection#f49c9b87849d9791849b989d978db4979987da9c9c87da939b82"><span class="__cf_email__" data-cfemail="6f07001c1f060c0a1f0003060c162f0c021c4107071c41080019">[email protected]</span></a>.
    For questions regarding the CAHPS[supreg] Hospice Survey, contact 
Lori Teichman at (410) 786-6684 and Lauren Fuentes at (410) 786-2290.
    For questions regarding the hospice quality reporting program, 
contact Cindy Massuda at (410) 786-0652.

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. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.
    Wage index addenda will be available only through the internet on 
our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.

I. Executive Summary

    This proposed rule proposes to establish a permanent mitigation 
policy to smooth the impact of year-to-year changes in the hospice 
payments related to changes in the hospice wage index. This rule also 
proposes updates to the hospice wage index as well as updates to the 
hospice payment rates, and cap amount for FY 2023 as required under 
section 1814(i) of the Social Security Act (the Act). In addition, in 
this proposed rule CMS discusses updates to HQRP that include the 
Hospice Outcomes and Patient Evaluation (HOPE) tool with national beta 
testing; the Consumer Assessment of Healthcare Providers and Systems 
(CAHPS) Hospice Survey with Star Ratings; developing a web-based 
survey; Public Reporting; a request for information that builds from 
last year's discussion on health equity, and update on advancing a 
health information exchange.
    Lastly, the overall economic impact of this proposed rule is 
estimated to be $580 million in increased payments to hospices for FY 
2023.

II. Background

A. Hospice Care

    Hospice care is a comprehensive, holistic approach to treatment 
that recognizes the impending death of a terminally ill individual and 
warrants a change in the focus from curative care to palliative care 
for relief of pain and for symptom management. Medicare regulations 
define ``palliative care'' as patient and family-centered care that 
optimizes quality of life by anticipating, preventing, and treating 
suffering. Palliative care throughout the continuum of illness involves 
addressing physical, intellectual, emotional, social, and spiritual 
needs and to facilitate patient autonomy, access to information, and 
choice (42 CFR 418.3). Palliative care is at the core of hospice 
philosophy and care practices, and is a critical component of the 
Medicare hospice benefit.
    The goal of hospice care is to help terminally ill individuals 
continue life with minimal disruption to normal activities while 
remaining primarily in the home environment. A hospice uses an 
interdisciplinary approach to deliver medical, nursing, social, 
psychological, emotional, and spiritual services through a 
collaboration of professionals and other caregivers, with the goal of 
making the beneficiary as physically and emotionally comfortable as 
possible. Hospice provides compassionate beneficiary and family/
caregiver-centered care for those who are terminally ill.
    As referenced in our regulations at Sec.  418.22(b)(1), to be 
eligible for Medicare hospice services, the patient's attending 
physician (if any) and the hospice medical director must certify that 
the individual is ``terminally ill,'' as defined in section 
1861(dd)(3)(A) of the Act and our regulations at Sec.  418.3; that is, 
the individual has a medical prognosis that his or her life expectancy 
is 6 months or less if the illness runs its normal course. The 
regulations at Sec.  418.22(b)(2) require that clinical information and 
other documentation that support the medical prognosis accompany the 
certification and be filed in the medical record with it. Additionally, 
the regulations at Sec.  418.22(b)(3) require that the

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certification and recertification forms include a brief narrative 
explanation of the clinical findings that support a life expectancy of 
6 months or less.
    Under the Medicare hospice benefit, once a terminally ill patient 
elects to receive hospice care, a hospice interdisciplinary group (IDG) 
is essential in ensuring the provision of primarily home-based 
services, keeping the choices of the patient and family first and 
foremost. The hospice IDG works with the beneficiary, family, and 
caregiver(s) to develop a coordinated, comprehensive care plan; reduce 
unnecessary diagnostics or ineffective therapies; and maintain ongoing 
communication with individuals and their families about changes in 
their condition and care. The beneficiary's care plan will shift over 
time to meet the changing needs of the individual, family, and 
caregiver(s) as the individual approaches the end of life.
    If, in the judgment of the hospice IDG, which includes the hospice 
physician, the patient's symptoms cannot be effectively managed at 
home, then the patient is eligible for general inpatient care (GIP), a 
more medically intense level of care. GIP must be provided in a 
Medicare-certified hospice freestanding facility, skilled nursing 
facility, or hospital. GIP is provided to ensure that any new or 
worsening symptoms are intensively addressed so that the beneficiary 
can return to their home and continue to receive routine home care 
(RHC). Limited, short-term, intermittent, inpatient respite care (IRC) 
is also available to provide relief for the family or other caregivers, 
or when the family or other caregivers are absent. Additionally, an 
individual can receive continuous home care (CHC) during a period of 
crisis, in which an individual requires continuous care to achieve 
palliation or management of acute medical symptoms so that the 
individual can remain at home. CHC may be covered for as much as 24 
hours a day, and these periods must be predominantly nursing care, in 
accordance with the regulations at Sec.  418.204. A minimum of 8 hours 
of nursing care, or nursing and aide care, must be furnished on a 
particular day to qualify for the CHC rate (Sec.  418.302(e)(4)).
    Hospices must comply with applicable civil rights laws,\1\ 
including section 504 of the Rehabilitation Act of 1973 and the 
Americans with Disabilities Act, under which covered entities must take 
appropriate steps to ensure effective communication with patients and 
patient care representatives with disabilities, including the 
provisions of auxiliary aids and services. In addition, they must take 
reasonable steps to ensure meaningful access for individuals with 
limited English proficiency, consistent with Title VI of the Civil 
Rights Act of 1964. Further information about these requirements may be 
found at: http://www.hhs.gov/ocr/civilrights.
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    \1\ Hospices are also subject to additional Federal civil rights 
laws, including the Age Discrimination Act, Section 1557 of the 
Affordable Care Act, and conscience and religious freedom laws.
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B. Services Covered by the Medicare Hospice Benefit

    Coverage under the Medicare hospice benefit requires that hospice 
services must be reasonable and necessary for the palliation and 
management of the terminal illness and related conditions. Section 
1861(dd)(1) of the Act establishes the services that are to be rendered 
by a Medicare-certified hospice program. These covered services 
include: Nursing care; physical therapy; occupational therapy; speech-
language pathology therapy; medical social services; home health aide 
services (called hospice aide services); physician services; homemaker 
services; medical supplies (including drugs and biologicals); medical 
appliances; counseling services (including dietary counseling); short-
term inpatient care in a hospital, nursing facility, or hospice 
inpatient facility (including both respite care and procedures 
necessary for pain control and acute or chronic symptom management); 
continuous home care during periods of crisis, and only as necessary to 
maintain the terminally ill individual at home; and any other item or 
service, which is specified in the plan of care and for which payment 
may otherwise be made under Medicare in accordance with Title XVIII of 
the Act.
    Section 1814(a)(7)(B) of the Act requires that a written plan for 
providing hospice care to a beneficiary who is a hospice patient be 
established before care is provided by, or under arrangements made by, 
the hospice program; and that the written plan be periodically reviewed 
by the beneficiary's attending physician (if any), the hospice medical 
director, and an interdisciplinary group (section 1861(dd)(2)(B) of the 
Act). The services offered under the Medicare hospice benefit must be 
available to beneficiaries as needed, 24 hours a day, 7 days a week 
(section 1861(dd)(2)(A)(i) of the Act).
    Upon the implementation of the hospice benefit, the Congress also 
expected hospices to continue to use volunteer services, though 
Medicare does not pay for these volunteer services (section 
1861(dd)(2)(E) of the Act). As stated in the FY 1983 Hospice Wage Index 
and Rate Update proposed rule (48 FR 38149), the hospice must have an 
interdisciplinary group composed of paid hospice employees as well as 
hospice volunteers, and that ``the hospice benefit and the resulting 
Medicare reimbursement is not intended to diminish the voluntary spirit 
of hospices.'' This expectation supports the hospice philosophy of 
community based, holistic, comprehensive, and compassionate end of life 
care.

C. Medicare Payment and Quality for Hospice Care

    Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of 
the Act, and the regulations in 42 CFR part 418, establish eligibility 
requirements, payment standards and procedures; define covered 
services; and delineate the conditions a hospice must meet to be 
approved for participation in the Medicare program. Part 418, subpart 
G, provides for a per diem payment based on one of four prospectively-
determined rate categories of hospice care (RHC, CHC, IRC, and GIP), 
based on each day a qualified Medicare beneficiary is under hospice 
care (once the individual has elected). This per diem payment is meant 
to cover all of the hospice services and items needed to manage the 
beneficiary's care, as required by section 1861(dd)(1) of the Act.
    While recent news reports \2\ have brought to light the potential 
role hospices could play in medical aid in dying (MAID) where such 
practices have been legalized in certain states, we wish to remind 
hospices that the Assisted Suicide Funding Restriction Act of 1997 
(Pub. L. 105-12) prohibits the use of Federal funds to provide or pay 
for any health care item or service or health benefit coverage for the 
purpose of causing, or assisting to cause, the death of any individual 
including mercy killing, euthanasia, or assisted suicide. This means 
that while payments made to hospices are to cover all items, services, 
and drugs for the palliation and management of the terminal illness and 
related conditions, Federal funds cannot be used for the prohibited 
activities, even in the context of a per diem payment. However, the 
prohibition does not pertain to the provision of an item or service for 
the purpose of alleviating pain or discomfort, even if such use may

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increase the risk of death, so long as the item or service is not 
furnished for the specific purpose of causing or accelerating death.
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    \2\ Nelson, R., Should Medical Aid in Dying Be Part of Hospice 
Care? Medscape Nurses. February 26, 2020. https://www.medscape.com/viewarticle/925769#vp_1.
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1. Omnibus Budget Reconciliation Act of 1989
    Section 6005(a) of the Omnibus Budget Reconciliation Act of 1989 
(Pub. L. 101-239) amended section 1814(i)(1)(C) of the Act and provided 
changes in the methodology concerning updating the daily payment rates 
based on the hospital market basket percentage increase applied to the 
payment rates in effect during the previous Federal fiscal year.
2. Balanced Budget Act of 1997
    Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33) established that updates to the hospice payment rates beginning 
FY 2002 and in subsequent FYs are to be the hospital market basket 
percentage increase for the current FY. Section 4442 of the BBA amended 
section 1814(i)(2) of the Act, effective for services furnished on or 
after October 1, 1997, to require that hospices submit claims for 
payment for hospice care furnished in an individual's home only on the 
basis of the geographic location at which the service is furnished. 
Previously, local wage index values were applied based on the 
geographic location of the hospice provider, regardless of where the 
hospice care was furnished. Section 4443 of the BBA amended sections 
1812(a)(4) and 1812(d)(1) of the Act to provide for hospice benefit 
periods of two 90-day periods, followed by an unlimited number of 60-
day periods.
3. FY 1998 Hospice Wage Index Final Rule
    The FY 1998 Hospice Wage Index final rule (62 FR 42860) implemented 
a new methodology for calculating the hospice wage index and instituted 
an annual Budget Neutrality Adjustment Factor (BNAF) so aggregate 
Medicare payments to hospices would remain budget neutral to payments 
calculated using the 1983 wage index.
4. FY 2010 Hospice Wage Index Final Rule
    The FY 2010 Hospice Wage Index and Rate Update final rule (74 FR 
39384) instituted an incremental 7-year phase-out of the BNAF beginning 
in FY 2010 through FY 2016. The BNAF phase-out reduced the amount of 
the BNAF increase applied to the hospice wage index value, but was not 
a reduction in the hospice wage index value itself or in the hospice 
payment rates.
5. The Affordable Care Act
    Starting with FY 2013 (and in subsequent FYs), the market basket 
percentage update under the hospice payment system referenced in 
sections 1814(i)(1)(C)(ii)(VII) and 1814(i)(1)(C)(iii) of the Act are 
subject to annual reductions related to changes in economy-wide 
productivity, as specified in section 1814(i)(1)(C)(iv) of the Act.
    In addition, sections 1814(i)(5)(A) through (C) of the Act, as 
added by section 3132(a) of the Patient Protection and Affordable Care 
Act (PPACA) (Pub. L. 111-148), required hospices to begin submitting 
quality data, based on measures specified by the Secretary of the 
Department of Health and Human Services (the Secretary) for FY 2014 and 
subsequent FYs. Since FY 2014, hospices that fail to report quality 
data have their market basket percentage increase reduced by 2 
percentage points. Note that with the passage of the Consolidated 
Appropriations Act, 2021 (hereafter referred to as CAA 2021) (Pub. L. 
116-260), the reduction changes to 4 percentage points beginning in FY 
2024.
    Section 1814(a)(7)(D)(i) of the Act, as added by section 3132(b)(2) 
of the PPACA, required, effective January 1, 2011, that a hospice 
physician or nurse practitioner have a face-to-face encounter with the 
beneficiary to determine continued eligibility of the beneficiary's 
hospice care prior to the 180th day recertification and each subsequent 
recertification, and to attest that such visit took place. When 
implementing this provision, the Centers for Medicare & Medicaid 
Services (CMS) finalized in the FY 2011 Hospice Wage Index final rule 
(75 FR 70435) that the 180th day recertification and subsequent 
recertifications would correspond to the beneficiary's third or 
subsequent benefit periods. Further, section 1814(i)(6) of the Act, as 
added by section 3132(a)(1)(B) of the PPACA, authorized the Secretary 
to collect additional data and information determined appropriate to 
revise payments for hospice care and other purposes. The types of data 
and information suggested in the PPACA could capture accurate resource 
utilization, which could be collected on claims, cost reports, and 
possibly other mechanisms, as the Secretary determined to be 
appropriate. The data collected could be used to revise the methodology 
for determining the payment rates for RHC and other services included 
in hospice care, no earlier than October 1, 2013, as described in 
section 1814(i)(6)(D) of the Act. In addition, CMS was required to 
consult with hospice programs and the Medicare Payment Advisory 
Commission (MedPAC) regarding additional data collection and payment 
revision options.
6. FY 2012 Hospice Wage Index Final Rule
    In the FY 2012 Hospice Wage Index final rule (76 FR 47308 through 
47314) it was announced that beginning in 2012, the hospice aggregate 
cap would be calculated using the patient-by-patient proportional 
methodology, within certain limits. Existing hospices had the option of 
having their cap calculated through the original streamlined 
methodology, also within certain limits. As of FY 2012, new hospices 
have their cap determinations calculated using the patient-by-patient 
proportional methodology. If a hospice's total Medicare payments for 
the cap year exceed the hospice aggregate cap, then the hospice must 
repay the excess back to Medicare.
7. IMPACT Act of 2014
    The Improving Medicare Post-Acute Care Transformation Act of 2014 
(IMPACT Act) (Pub. L. 113-185) became law on October 6, 2014. Section 
3(a) of the IMPACT Act mandated that all Medicare certified hospices be 
surveyed every 3 years beginning April 6, 2015 and ending September 30, 
2025. In addition, section 3(c) of the IMPACT Act requires medical 
review of hospice cases involving beneficiaries receiving more than 180 
days of care in select hospices that show a preponderance of such 
patients; section 3(d) of the IMPACT Act contains a new provision 
mandating that the cap amount for accounting years that end after 
September 30, 2016, and before October 1, 2025 be updated by the 
hospice payment percentage update rather than using the consumer price 
index for urban consumers (CPI-U) for medical care expenditures.
8. FY 2015 Hospice Wage Index and Payment Rate Update Final Rule
    The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 
50452) finalized a requirement that the Notice of Election (NOE) be 
filed within 5 calendar days after the effective date of hospice 
election. If the NOE is filed beyond this 5-day period, hospice 
providers are liable for the services furnished during the days from 
the effective date of hospice election to the date of NOE filing (79 FR 
50474). As with the NOE, the claims processing system must be notified 
of a beneficiary's discharge from hospice or hospice benefit revocation 
within 5

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calendar days after the effective date of the discharge/revocation 
(unless the hospice has already filed a final claim) through the 
submission of a final claim or a Notice of Termination or Revocation 
(NOTR).
    The FY 2015 Hospice Wage Index and Rate Update final rule (79 FR 
50479) also finalized a requirement that the election form include the 
beneficiary's choice of attending physician and that the beneficiary 
provide the hospice with a signed document when he or she chooses to 
change attending physicians.
    In addition, the FY 2015 Hospice Wage Index and Rate Update final 
rule (79 FR 50496) provided background, described eligibility criteria, 
identified survey respondents, and otherwise implemented the Hospice 
Experience of Care Survey for informal caregivers. Hospice providers 
were required to begin using this survey for hospice patients as of 
2015.
    Finally, the FY 2015 Hospice Wage Index and Rate Update final rule 
required providers to complete their aggregate cap determination not 
sooner than 3 months after the end of the cap year, and not later than 
5 months after, and remit any overpayments. Those hospices that fail to 
submit their aggregate cap determinations on a timely basis will have 
their payments suspended until the determination is completed and 
received by the Medicare contractor (79 FR 50503).
9. FY 2016 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47142), CMS finalized two different payment rates for RHC: A higher per 
diem base payment rate for the first 60 days of hospice care and a 
reduced per diem base payment rate for subsequent days of hospice care. 
CMS also finalized a service intensity add-on (SIA) payment payable for 
certain services during the last 7 days of the beneficiary's life. A 
service intensity add-on payment will be made for the social worker 
(SW) visits and nursing visits provided by a registered nurse (RN), 
when provided during routine home care in the last 7 days of life. The 
SIA payment is in addition to the routine home care rate. The SIA 
payment is provided for visits of a minimum of 15 minutes and a maximum 
of 4 hours per day (80 FR 47172).
    In addition to the hospice payment reform changes discussed, the FY 
2016 Hospice Wage Index and Rate Update final rule implemented changes 
mandated by the IMPACT Act, in which the cap amount for accounting 
years that end after September 30, 2016 and before October 1, 2025 
would be updated by the hospice payment update percentage rather than 
using the CPI-U (80 FR 47186). In addition, we finalized a provision to 
align the cap accounting year for both the inpatient cap and the 
hospice aggregate cap with the FY for FY 2017 and thereafter. Finally, 
the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 47144) 
clarified that hospices would have to report all diagnoses on the 
hospice claim as a part of the ongoing data collection efforts for 
possible future hospice payment refinements.
10. FY 2017 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR 
52160), CMS finalized several new policies and requirements related to 
the HQRP. First, CMS codified the policy that if the National Quality 
Forum (NQF) made non-substantive changes to specifications for HQRP 
measures as part of the NQF's re-endorsement process, CMS would 
continue to utilize the measure in its new endorsed status, without 
going through new notice-and-comment rulemaking. CMS would continue to 
use rulemaking to adopt substantive updates made by the NQF to the 
endorsed measures adopted for the HQRP; determinations about what 
constitutes a substantive versus non-substantive change would be made 
on a measure-by-measure basis. Second, we finalized two new quality 
measures for the HQRP for the FY 2019 payment determination and 
subsequent years: (1) Hospice Visits when Death is Imminent Measure 
Pair; and (2) Hospice and Palliative Care Composite Process Measure-
Comprehensive Assessment at Admission (81 FR 52173). The data 
collection mechanism for both of these measures is the Hospice Item Set 
(HIS), and the measures were effective April 1, 2017. Regarding the 
CAHPS[supreg] Hospice Survey, CMS finalized a policy that hospices that 
receive their CMS Certification Number (CCN) after January 1, 2017 for 
the FY 2019 Annual Payment Update (APU) and January 1, 2018 for the FY 
2020 APU will be exempted from the Hospice CAHPS[supreg] requirements 
due to newness (81 FR 52182). The exemption is determined by CMS and is 
only for 1 year.
11. FY 2020 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2020 Hospice Wage Index and Rate Update final rule (84 FR 
38484), we finalized rebased payment rates for CHC and GIP and set 
those rates equal to their average estimated FY 2019 costs per day. We 
also rebased IRC per diem rates equal to the estimated FY 2019 average 
costs per day, with a reduction of 5 percent to the FY 2019 average 
cost per day to account for coinsurance. We finalized the FY 2020 
proposal to reduce the RHC payment rates by 2.72 percent to offset the 
increases to CHC, IRC, and GIP payment rates to implement this policy 
in a budget-neutral manner in accordance with section 1814(i)(6) of the 
Act (84 FR 38496).
    In addition, we finalized a policy to use the current year's pre-
floor, pre-reclassified hospital inpatient wage index as the wage 
adjustment to the labor portion of the hospice rates. Finally, in the 
FY 2020 Hospice Wage Index and Rate Update final rule (84 FR 38505), we 
finalized modifications to the hospice election statement content 
requirements at Sec.  418.24(b), and added a requirement for hospices, 
upon request, to furnish an election statement addendum effective 
beginning in FY 2021. The addendum must list items, services, and drugs 
the hospice has determined to be unrelated to the terminal illness and 
related conditions, to increase coverage transparency for beneficiaries 
under a hospice election.
12. Consolidated Appropriations Act, 2021
    Division CC, section 404 of the CAA 2021 amended section 
1814(i)(2)(B) of the Act and extended the provision that currently 
mandates the hospice cap be updated by the hospice payment update 
percentage (hospital market basket update reduced by the productivity 
adjustment) rather than the CPI-U for accounting years that end after 
September 30, 2016 and before October 1, 2030. Prior to enactment of 
this provision, the hospice cap update was set to revert to the 
original methodology of updating the annual cap amount by the CPI-U 
beginning on October 1, 2025. Division CC, section 407(b) of CAA 2021 
revised section 1814(i)(5)(A)(i) to increase the payment reduction for 
hospices who fail to meet hospice quality measure reporting 
requirements from 2 percentage points to 4 percentage points beginning 
with FY 2024.
13. FY 2022 Hospice Wage Index and Payment Rate Update Final Rule
    In the FY 2022 Hospice Wage Index and Rate Update final rule (86 FR 
42532 through 42539), we finalized a policy to rebase and revise the 
labor shares for CHC, RHC, IRC and GIP using Medicare cost report (MCR) 
data for freestanding hospices (collected via CMS Form 1984-14, OMB NO. 
0938-0758) for

[[Page 19446]]

2018. We established separate labor shares for CHC, RHC, IRC, and GIP 
based on the calculated compensation cost weights for each level of 
care from the 2018 MCR data. The revised labor shares were implemented 
in a budget neutral manner through the use of labor share 
standardization factors.
    In the FY 2022 final rule, we removed the seven original Hospice 
Item Set (HIS) measures from the program because a more broadly 
applicable measure (across settings, populations, or conditions) for 
the particular topic is available and already publicly reported. The 
Hospice Comprehensive Assessment Measure, NQF #3235, is one measure 
that is calculated and rolled up by completion of the seven individual 
measures. This measure helps to ensure all hospice patients receive a 
holistic comprehensive assessment. Also, in or after May 2022, we will 
start publicly reporting the two new claims-based measures. 
Specifically, this includes the: (1) Hospice Visits in the Last Days of 
Life (HVLDL) (which replaces the HIS Hospice Visits when Death is 
Imminent measure pair); and (2) Hospice Care Index (HCI) that includes 
10 indicators that collectively represent different aspects of hospice 
care and aim to convey a comprehensive characterization of the quality 
of care furnished by a hospice throughout the hospice stay. Related to 
these changes, we finalized reporting eight quarters of claims data in 
order to display small providers. We finalized the public reporting of 
Consumer Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Hospice Survey Star ratings on Care Compare to begin no sooner than FY 
2022.

III. Provisions of the Proposed Rule

A. Proposed FY 2023 Hospice Wage Index and Rate Update

1. Proposed FY 2023 Hospice Wage Index
    The hospice wage index is used to adjust payment rates for hospices 
under the Medicare program to reflect local differences in area wage 
levels, based on the location where services are furnished. The hospice 
wage index utilizes the wage adjustment factors used by the Secretary 
for purposes of section 1886(d)(3)(E) of the Act for hospital wage 
adjustments. Our regulations at Sec.  418.306(c) require each labor 
market to be established using the most current hospital wage data 
available, including any changes made by the Office of Management and 
Budget (OMB) to the Metropolitan Statistical Areas (MSAs) definitions.
    In general, OMB issues major revisions to statistical areas every 
10 years, based on the results of the decennial census. However, OMB 
occasionally issues minor updates and revisions to statistical areas in 
the years between the decennial censuses. On March 6, 2020, OMB issued 
Bulletin No. 20-01, which provided updates to and superseded OMB 
Bulletin No. 18-04 that was issued on September 14, 2018. The 
attachments to OMB Bulletin No. 20-01 provided detailed information on 
the update to statistical areas since September 14, 2018, and were 
based on the application of the 2010 Standards for Delineating 
Metropolitan and Micropolitan Statistical Areas to Census Bureau 
population estimates for July 1, 2017 and July 1, 2018. (For a copy of 
this bulletin, we refer readers to the following website: https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf.) In 
OMB Bulletin No. 20-01, OMB announced one new Micropolitan Statistical 
Area, one new component of an existing Combined Statistical Area (CSA), 
and changes to New England City and Town Area (NECTA) delineations. In 
the FY 2021 Hospice Wage Index final rule (85 FR 47070) we stated that 
if appropriate, we would propose any updates from OMB Bulletin No. 20-
01 in future rulemaking. After reviewing OMB Bulletin No. 20-01, we 
determined that the changes in Bulletin 20-01 encompassed delineation 
changes that would not affect the Medicare wage index for FY 2022. 
Specifically, the updates consisted of changes to NECTA delineations 
and the redesignation of a single rural county into a newly created 
Micropolitan Statistical Area. The Medicare wage index does not utilize 
NECTA definitions, and, as most recently discussed in the FY 2021 
Hospice Wage Index final rule (85 FR 47070), we include hospitals 
located in Micropolitan Statistical areas in each state's rural wage 
index. Therefore, in the FY 2022 Hospice Wage Index final rule (86 FR 
42528) we adopted the updates set forth in OMB Bulletin No. 20-01 
consistent with our longstanding policy of adopting OMB delineation 
updates.
    In the FY 2020 Hospice Wage Index final rule (84 FR 38484), we 
finalized the proposal to use the current FY's hospital wage index data 
to calculate the hospice wage index values. In the FY 2021 Hospice Wage 
Index final rule (85 FR 47070), we adopted the revised OMB delineations 
with a 5-percent cap on wage index decreases, where the estimated 
reduction in a geographic area's wage index would be capped at 5-
percent in FY 2021 and no cap would be applied to wage index decreases 
for the second year (FY 2022). For FY 2023, the proposed hospice wage 
index would be based on the FY 2023 hospital pre-floor, pre-
reclassified wage index for hospital cost reporting periods beginning 
on or after October 1, 2018 and before October 1, 2019 (FY 2019 cost 
report data). The proposed FY 2023 hospice wage index would not take 
into account any geographic reclassification of hospitals, including 
those in accordance with section 1886(d)(8)(B) or 1886(d)(10) of the 
Act. The proposed FY 2023 hospice wage index would include a 5-percent 
cap on wage index decreases as discussed later in this section. The 
appropriate wage index value would be applied to the labor portion of 
the hospice payment rate based on the geographic area in which the 
beneficiary resides when receiving RHC or CHC. The appropriate wage 
index value is applied to the labor portion of the payment rate based 
on the geographic location of the facility for beneficiaries receiving 
GIP or IRC.
    In the FY 2006 Hospice Wage Index final rule (70 FR 45135), we 
adopted the policy that, for urban labor markets without a hospital 
from which hospital wage index data could be derived, all of the CBSAs 
within the state would be used to calculate a statewide urban average 
pre-floor, pre-reclassified hospital wage index value to use as a 
reasonable proxy for these areas. For FY 2023, the only CBSA without a 
hospital from which hospital wage data can be derived is 25980, 
Hinesville-Fort Stewart, Georgia. The FY 2023 wage index value for 
Hinesville-Fort Stewart, Georgia is 0.8620.
    There exist some geographic areas where there were no hospitals, 
and thus, no hospital wage data on which to base the calculation of the 
hospice wage index. In the FY 2008 Hospice Wage Index final rule (72 FR 
50217 through 50218), we implemented a methodology to update the 
hospice wage index for rural areas without hospital wage data. In cases 
where there was a rural area without rural hospital wage data, we use 
the average pre-floor, pre-reclassified hospital wage index data from 
all contiguous CBSAs, to represent a reasonable proxy for the rural 
area. The term ``contiguous'' means sharing a border (72 FR 50217). 
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 would not apply this methodology due to the distinct economic 
circumstances that exist there (for example, due to the close proximity 
of almost all of Puerto Rico's various

[[Page 19447]]

urban areas to 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 would continue to use the most recent wage 
index previously available for that area. For FY 2023, we propose to 
continue using the most recent pre-floor, pre-reclassified hospital 
wage index value available for Puerto Rico, which is 0.4047, 
subsequently adjusted by the hospice floor.
    As described in the August 8, 1997 Hospice Wage Index final rule 
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index 
is used as the raw wage index for the hospice benefit. These raw wage 
index values are subject to application of the hospice floor to compute 
the hospice wage index used to determine payments to hospices. As 
previously discussed, the pre-floor, pre-reclassified hospital wage 
index values below 0.8 will be further adjusted by a 15 percent 
increase subject to a maximum wage index value of 0.8. For example, if 
County A has a pre-floor, pre-reclassified hospital wage index value of 
0.3994, we would multiply 0.3994 by 1.15, which equals 0.4593. Since 
0.4593 is not greater than 0.8, then County A's hospice wage index 
would be 0.4593. In another example, if County B has a pre-floor, pre-
reclassified hospital wage index value of 0.7440, we would multiply 
0.7440 by 1.15, which equals 0.8556. Because 0.8556 is greater than 
0.8, County B's hospice wage index would be 0.8.
    The proposed hospice wage index applicable for FY 2023 (October 1, 
2022 through September 30, 2023) is available on the CMS website at: 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Wage-Index.html.
2. Proposed Permanent Cap on Wage Index Decreases
    As discussed in section III.A.1, we have proposed and finalized 
temporary transition policies in the past to mitigate significant 
changes to payments due to changes to the hospice wage index. 
Specifically, in the FY 2016 Hospice Wage Index and Payment Rate Update 
final rule (80 FR 47142) we implemented a 50/50 blend for all 
geographic areas consisting of the wage index values using the then-
current OMB area delineations and the wage index values using OMB's new 
area delineations based on OMB Bulletin No. 13-01. In the FY 2021 
Hospice Wage Index final rule (85 FR 47070), we adopted the revised OMB 
delineations with a 5-percent cap on wage index decreases, where the 
estimated reduction in a geographic area's wage index would be capped 
at 5-percent in FY 2021 and no cap would be applied to wage index 
decreases for the second year (FY 2022). As explained, we believed the 
5-percent cap would provide greater transparency and be 
administratively less complex than the prior methodology of applying a 
50/50 blended wage index. We noted that this transition approach struck 
an appropriate balance by providing a transition period to mitigate the 
resulting -short-term instability and negative impacts on providers and 
time for them to adjust to their new labor market area delineations and 
wage index values.
    In the FY 2022 Hospice Wage Index and Payment Rate Update final 
rule (86 FR 42541), a few commenters stated that providers should be 
protected against substantial payment reductions due to dramatic 
reductions in wage index values from one year to the next. Because we 
did not propose to modify the transition policy that was finalized in 
the FY 2021 Hospice final rule, we did not extend the transition period 
for FY 2022. In the FY 2022 Hospice final rule, we stated that we 
continued to believe that applying the 5-percent cap transition policy 
in year one provided an adequate safeguard against any significant 
payment reductions associated with the adoption of the revised CBSA 
delineations in FY 2021, allowed for sufficient time to make 
operational changes for future FYs, and provided a reasonable balance 
between mitigating some short-term instability in hospice payments and 
improving the accuracy of the payment adjustment for differences in 
area wage levels. However, we acknowledged that certain changes to wage 
index policy may significantly affect Medicare payments. In addition, 
we reiterated that our policy principles with regard to the wage index 
include generally using the most current data and information available 
and providing that data and information, as well as any approaches to 
addressing any significant effects on Medicare payments resulting from 
these potential scenarios, in notice and comment rulemaking. With these 
policy principles in mind, we considered for this FY 2023 Hospice 
proposed rule how best to address the potential scenarios, which 
commenters raised concerns; that is, scenarios in which changes to wage 
index policy may significantly affect Medicare payments.
    In the past, we have established transition policies of limited 
duration to phase in significant changes to labor market areas. In 
taking this approach in the past, we sought to mitigate short term 
instability and fluctuations that can negatively impact providers due 
to wage index changes. In accordance with the requirement of our 
regulations at Sec.  418.306(c) each labor market is established using 
the most current hospital wage data available, including any changes 
made by the OMB to the Metropolitan Statistical Areas (MSAs) 
definitions. We have previously stated that, because the wage index is 
a relative measure of the value of labor in prescribed labor market 
areas, we believe it is important to implement new labor market area 
delineations with as minimal a transition as is reasonably possible. 
However, we recognize that changes to the wage index have the potential 
to create instability and significant negative impacts on certain 
providers even when labor market areas do not change. In addition, 
year-to-year fluctuations in an area's wage index can occur due to 
external factors beyond a provider's control, such as the COVID-19 PHE, 
and for an individual provider, these fluctuations can be difficult to 
predict. We also recognize that predictability in Medicare payments is 
important to enable providers to budget and plan their operations.
    In light of these considerations, we are proposing a permanent 
approach to smooth year-to-year changes in providers' wage indexes. We 
are proposing a policy that increases the predictability of hospice 
payments for providers, and mitigates instability and significant 
negative impacts to providers resulting from changes to the wage index.
    As previously discussed, we believed that applying a 5-percent cap 
on wage index decreases for FY 2021 provided greater transparency and 
was administratively less complex than prior transition methodologies. 
In addition, we believed this methodology mitigated short term 
instability and fluctuations that can negatively impact providers due 
to wage index changes. Lastly, we believed the 5-percent cap applied to 
all wage index decreases for FY 2021 provided an adequate safeguard 
against significant payment reductions related to the adoption of the 
revised CBSAs. However, as discussed earlier in this section of the 
proposed rule, we recognize there are circumstances that a one-year 
mitigation policy, like the one adopted for FY 2021, would not 
effectively address future years in which providers continue to be 
negatively affected by significant wage index decreases.
    Typical year-to-year variation in the hospice wage index has 
historically been within 5-percent, and we expect

[[Page 19448]]

this will continue to be the case in future years. Therefore, we 
believe that applying a 5-percent cap on all wage index decreases in 
future years, regardless of the reason for the decrease, would 
effectively mitigate instability in hospice payments due to any 
significant wage index decreases that may affect providers in any year 
that commenters raised in the FY 2022 Hospice final rule. In addition, 
we believe that applying a 5-percent cap on all wage index decreases 
would increase the predictability of hospice payments for providers, 
enabling them to more effectively budget and plan their operations. 
Lastly, we believe that applying a 5-percent cap on all wage index 
decreases, from the prior year, would have a small overall impact on 
the labor market area wage index system. As discussed in further detail 
in section III.A.4. of this proposed rule, we estimate that applying a 
5-percent cap on all wage index decreases, from the prior year, will 
have a very small effect on the wage index budget standardization 
factors for FY 2023. Because the wage index is a measure of the value 
of labor (wage and wage-related costs) in a prescribed labor market 
area relative to the national average, we anticipate that most 
providers will not experience year-to-year wage index declines greater 
than 5-percent in any given year. We believe that applying a 5-percent 
cap on all wage index decreases, from the prior year, would continue to 
maintain the accuracy of the overall labor market area wage index 
system.
    Therefore, for FY 2023 and subsequent years, we are proposing to 
apply a permanent 5-percent cap on any decrease to a geographic area's 
wage index from its wage index in the prior year, regardless of the 
circumstances causing the decline. That is, we are proposing that a 
geographic area's wage index for FY 2023 would not be less than 95 
percent of its final wage index for FY 2022, regardless of whether the 
geographic area is part of an updated CBSA, and that for subsequent 
years, a geographic area's wage index would not be less than 95 percent 
of its wage index calculated in the prior FY. We further propose that 
if a geographic area's prior FY wage index is calculated based on the 
5-percent cap, then the following year's wage index would not be less 
than 95 percent of the geographic area's capped wage index in the prior 
FY. For example, if a geographic area's wage index for FY 2023 is 
calculated with the application of the 5-percent cap, then its wage 
index for FY 2024 would not be less than 95 percent of its capped wage 
index in FY 2023. Likewise, we are proposing to make the corresponding 
regulations text changes at Sec.  418.306(c) as follows: Starting on 
October 1, 2022, CMS applies a cap on decreases to the hospice wage 
index such that the wage index applied to a geographic area is not less 
than 95 percent of the wage index applied to that geographic area in 
the prior FY. This 5-percent cap on negative wage index changes would 
be implemented in a budget neutral manner through the use of wage index 
standardization factors. Furthermore, the 5-percent cap would be 
applied after the application of the hospice wage index floor. 
Therefore, pre-floor, pre-reclassified hospital wage index values below 
0.8 would be adjusted by the 15 percent increase, subject to a maximum 
wage index value of 0.8. If there is a 5 percent decrease from the 
previous FY's wage index value after the application of the hospice 
wage index floor, then the 5-percent cap on wage index decreases would 
also be applied.
    In section III.A.4 of this proposed rule, we estimate the impact to 
payments for providers in FY 2023 based on this proposed policy. We 
also note that we would examine the effects of this policy on an 
ongoing basis in the future in order to assess its appropriateness.
3. Proposed FY 2023 Hospice Payment Update Percentage
    Section 4441(a) of the BBA (Pub. L. 105-33) amended section 
1814(i)(1)(C)(ii)(VI) of the Act to establish updates to hospice rates 
for FYs 1998 through 2002. Hospice rates were to be updated by a factor 
equal to the inpatient hospital market basket percentage increase set 
out under section 1886(b)(3)(B)(iii) of the Act, minus 1 percentage 
point. Payment rates for FYs since 2002 have been updated according to 
section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update 
to the payment rates for subsequent FYs must be the inpatient market 
basket percentage increase for that FY. In the FY 2022 IPPS final rule 
CMS finalized the proposal to rebase and revise the IPPS market baskets 
to reflect a 2018 base year. We refer readers to the FY 2022 IPPS final 
rule for further information (86 FR 45194 through 45208).
    Section 3401(g) of the Affordable Care Act mandated that, starting 
with FY 2013 (and in subsequent FYs), the hospice payment update 
percentage would be annually reduced by changes in economy-wide 
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. 
The statute defines the productivity adjustment to be equal to the 10-
year moving average of changes in annual economy-wide private nonfarm 
business multifactor productivity (MFP) as projected by the Secretary 
for the 10-year period ending with the applicable FY, year, cost 
reporting period, or other annual period) (the ``productivity 
adjustment''). The United States Department of Labor's Bureau of Labor 
Statistics (BLS) publishes the official measures of productivity for 
the United States economy. We note that previously the productivity 
measure referenced in section 1886(b)(3)(B)(xi)(II) was published by 
BLS as private nonfarm business multifactor productivity. Beginning 
with the November 18, 2021 release of productivity data, BLS replaced 
the term ``multifactor productivity'' with ``total factor 
productivity'' (TFP). BLS noted that this is a change in terminology 
only and will not affect the data or methodology. As a result of the 
BLS name change, the productivity measure referenced in section 
1886(b)(3)(B)(xi)(II) of the Act is now published by BLS as ``private 
nonfarm business total factor productivity''. However, as mentioned, 
the data and methods are unchanged. We refer readers to http://www.bls.gov for the BLS historical published TFP data. A complete 
description of IGI's TFP projection methodology is available on the CMS 
website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch. In addition, in the FY 2022 IPPS final rule (86 
FR 45214), we noted that beginning with FY 2022, CMS changed the name 
of this adjustment to refer to it as the ``productivity adjustment'' 
rather than the ``MFP adjustment''.
    The proposed hospice payment update percentage for FY 2023 is based 
on the proposed inpatient hospital market basket update of 3.1 percent 
(based on IHS Global Inc.'s fourth quarter 2021 forecast with 
historical data through the third quarter 2021). Due to the 
requirements at sections 1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of 
the Act, the proposed inpatient hospital market basket update for FY 
2023 of 3.1 percent must be reduced by a productivity adjustment as 
mandated by the Affordable Care Act (currently estimated to be 0.4 
percentage point for FY 2023). In effect, the proposed hospice payment 
update percentage for FY 2023 would be 2.7 percent. We also propose 
that if more recent data become available after the publication of this 
proposed rule and before the publication of the final rule (for

[[Page 19449]]

example, more recent estimates of the inpatient hospital market basket 
update and productivity adjustment), we would use such data, if 
appropriate, to determine the hospice payment update percentage for FY 
2023 in the final rule. We continue to believe it is appropriate to 
routinely update the hospice payment system so that it reflects the 
best available data about differences in patient resource use and costs 
among hospices as required by the statute. Therefore, we are proposing 
to: (1) Update hospice payments using the methodology outlined and 
apply the 2018-based IPPS market basket update for FY 2023 of 3.1 
percent, reduced by the statutorily required productivity adjustment of 
0.4 percentage point along with the wage index budget neutrality 
adjustment to update the payment rates; and (2) use the FY 2023 hospice 
wage index which uses the FY 2023 pre-floor, pre-reclassified IPPS 
hospital wage index as its basis.
    In the FY 2022 Hospice Wage Index final rule (86 FR 42532 through 
42539), we rebased and revised the labor shares for RHC, CHC, GIP and 
IRC using MCR data for freestanding hospices (CMS Form 1984-14, OMB 
Control Number 0938-0758) from 2018. The current labor portion of the 
payment rates are: For RHC, 66.0 percent; for CHC, 75.2 percent; for 
GIP, 63.5 percent; and for IRC, 61.0 percent. The non-labor portion is 
equal to 100 percent minus the labor portion for each level of care. 
The non-labor portion of the payment rates are as follows: For RHC, 
34.0 percent; for CHC, 24.8 percent; for GIP, 36.5 percent; and for 
IRC, 39.0 percent.
4. Proposed FY 2023 Hospice Payment Rates
    There are four payment categories that are distinguished by the 
location and intensity of the hospice services provided. The base 
payments are adjusted for geographic differences in wages by 
multiplying the labor share, which varies by category, of each base 
rate by the applicable hospice wage index. A hospice is paid the RHC 
rate for each day the beneficiary is enrolled in hospice, unless the 
hospice provides CHC, IRC, or GIP. CHC is provided during a period of 
patient crisis to maintain the patient at home; IRC is short-term care 
to allow the usual caregiver to rest and be relieved from caregiving; 
and GIP is to treat symptoms that cannot be managed in another setting.
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47172), we implemented two different RHC payment 
rates, one RHC rate for the first 60 days and a second RHC rate for 
days 61 and beyond. In addition, in that final rule, we implemented an 
SIA payment for RHC when direct patient care is provided by an RN or 
social worker during the last 7 days of the beneficiary's life. The SIA 
payment is equal to the CHC hourly rate multiplied by the hours of 
nursing or social work provided (up to 4 hours total) that occurred on 
the day of service, if certain criteria are met. In order to maintain 
budget neutrality, as required under section 1814(i)(6)(D)(ii) of the 
Act, the new RHC rates were adjusted by a service intensity add-on 
budget neutrality factor (SBNF). The SBNF is used to reduce the overall 
RHC rate in order to ensure that SIA payments are budget-neutral. At 
the beginning of every FY, SIA utilization is compared to the prior 
year in order calculate a budget neutrality adjustment. In the FY 2017 
Hospice Wage Index and Rate Update final rule (81 FR 52156), we 
initiated a policy of applying a wage index standardization factor to 
hospice payments in order to eliminate the aggregate effect of annual 
variations in hospital wage data. Typically, the wage index 
standardization factor is calculated using the most recent, complete 
hospice claims data available. However, due to the COVID-19 PHE, in the 
FY 2022 Hospice Wage Index and Payment Rate Update proposed rule we 
looked at using hospice claims data before the declaration of the 
COVID-19 PHE (FY 2019) to determine if there were significant 
differences between utilizing 2019 and 2020 claims data. The difference 
between using FY 2019 and FY 2020 hospice claims data was minimal. 
Therefore, in the FY 2022 Hospice Wage Index and Payment Rate Update 
final rule (86 FR 42543), we stated that we would continue our practice 
of using the most recent, complete hospice claims data available. For 
FY 2023 hospice rate setting, we saw minimal differences in using the 
updated data; therefore, we are continuing our longstanding policy of 
using the most recent data available. Specifically, we are using FY 
2021 claims data with the FY 2023 payment rate updates. In order to 
calculate the wage index standardization factor, we simulate total 
payments using FY 2021 hospice utilization claims data with the FY 2022 
wage index (pre-floor, pre-reclassified hospital wage index with the 
hospice floor, without the 5-percent cap on wage index decreases) and 
FY 2022 payment rates and compare it to our simulation of total 
payments using the FY 2023 hospice wage index (pre-floor, pre-
reclassified hospital wage index with hospice floor, with the 5-percent 
cap on wage index decreases) and FY 2022 payment rates. By dividing 
payments for each level of care (RHC days 1 through 60, RHC days 61+, 
CHC, IRC, and GIP) using the FY 2022 wage index and payment rates for 
each level of care by the FY 2023 wage index and FY 2022 payment rates, 
we obtain a wage index standardization factor for each level of care. 
The wage index standardization factors for each level of care are shown 
in the Tables 1 and 2.
    The proposed FY 2023 RHC rates are shown in Table 1. The proposed 
FY 2023 payment rates for CHC, IRC, and GIP are shown in Table 2.

                                                   Table 1--Proposed FY 2023 Hospice RHC Payment Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         SIA budget        Wage index       Proposed FY     Proposed FY
               Code                            Description                 FY 2022       neutrality     standardization    2023 hospice    2023 payment
                                                                       payment  rates      factor            factor       payment update       rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
651..............................  Routine Home Care (days 1-60).....         $203.40          1.0004             1.0008           1.027         $209.14
651..............................  Routine Home Care (days 61+)......          160.74          1.0003             1.0007           1.027          165.25
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 19450]]


                        Table 2--Proposed FY 2023 Hospice CHC, IRC, and GIP Payment Rates
----------------------------------------------------------------------------------------------------------------
                                                                                    Proposed FY
                                            FY 2022 payment        Wage index      2023 hospice     Proposed FY
        Code             Description             rates          standardization       payment      2023 payment
                                                                     factor           update           rates
----------------------------------------------------------------------------------------------------------------
652................  Continuous Home      $1,462.52 ($60.94               1.0024           1.027       $1,505.61
                      Care Full Rate =     per hour).
                      24 hours of care.
655................  Inpatient Respite    473.75.............             1.0007           1.027          486.88
                      Care.
656................  General Inpatient    1,068.28...........             1.0016           1.027        1,098.88
                      Care.
----------------------------------------------------------------------------------------------------------------

    Sections 1814(i)(5)(A) through (C) of the Act require that hospices 
submit quality data, based on measures to be specified by the 
Secretary. In the FY 2012 Hospice Wage Index and Rate Update final rule 
(76 FR 47320 through 47324), we implemented a HQRP as required by those 
sections. Hospices were required to begin collecting quality data in 
October 2012 and submit those quality data in 2013. Section 
1814(i)(5)(A)(i) of the Act requires that beginning with FY 2014 and 
each subsequent FY, the Secretary shall reduce the market basket update 
by 2 percentage points for any hospice that does not comply with the 
quality data submission requirements with respect to that FY. The 
proposed FY 2023 rates for hospices that do not submit the required 
quality data would be updated by the proposed FY 2023 hospice payment 
update percentage of 2.7 percent minus 2 percentage points. These rates 
are shown in Tables 3 and 4.

                      Table 3--Proposed FY 2023 Hospice RHC Payment Rates for Hospices That DO NOT Submit the Required Quality Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                            Proposed FY
                                                                                                                           2023 hospice
                                                                                         SIA budget        Wage index         payment       Proposed FY
               Code                            Description                 FY 2022       neutrality     standardization      update of     2023 payment
                                                                        payment rates      factor            factor        2.7% minus 2        rates
                                                                                                                            percentage
                                                                                                                          points = +0.7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
651..............................  Routine Home Care (days 1-60).....         $203.40          1.0004             1.0008           1.007         $205.07
651..............................  Routine Home Care (days 61+)......          160.74          1.0003             1.0007           1.007          162.03
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 4--Proposed FY 2023 Hospice CHC, IRC, and GIP Payment Rates for Hospices That DO NOT Submit the Required
                                                  Quality Data
----------------------------------------------------------------------------------------------------------------
                                                                                    Proposed FY
                                                                                   2023 hospice
                                                                   Wage index         payment       Proposed FY
        Code             Description        FY 2022 payment     standardization      update of     2023 payment
                                                 rates               factor        2.7% minus 2        rates
                                                                                    percentage
                                                                                  points = +0.7%
----------------------------------------------------------------------------------------------------------------
652................  Continuous Home      $1,462.52 ($60.94               1.0024           1.007       $1,476.29
                      Care.                per hour).
                     Full Rate= 24 hours
                      of care.
655................  Inpatient Respite    $473.75............             1.0007           1.007         $477.40
                      Care.
656................  General Inpatient    1,068.28...........             1.0016           1.007        1,077.48
                      Care.
----------------------------------------------------------------------------------------------------------------

5. Proposed Hospice Cap Amount for FY 2023
    As discussed in the FY 2016 Hospice Wage Index and Rate Update 
final rule (80 FR 47183), we implemented changes mandated by the IMPACT 
Act of 2014 (Pub. L. 113-185). Specifically, we stated that for 
accounting years that end after September 30, 2016 and before October 
1, 2025, the hospice cap is updated by the hospice payment update 
percentage rather than using the CPI-U. Division CC, section 404 of the 
CAA 2021 extended the accounting years impacted by the adjustment made 
to the hospice cap calculation until 2030. In the FY 2022 Hospice Wage 
Index final rule (86 FR 42539), we finalized conforming regulations 
text changes at Sec.  418.309 to reflect the provisions of the CAA 
2021. Therefore, for accounting years that end after September 30, 2016 
and before October 1, 2030, the hospice cap amount is updated by the 
hospice payment update percentage rather than using the CPI-U.
    The proposed hospice cap amount for the FY 2023 cap year is 
$32,142.65, which is equal to the FY 2022 cap amount ($31,297.61) 
updated by the proposed FY 2023 hospice payment update percentage of 
2.7 percent.

B. Proposed Updates to the Hospice Quality Reporting Program

1. Background and Statutory Authority
    The Hospice Quality Reporting Program (HQRP) specifies reporting 
requirements for the Hospice Item Set (HIS), administrative data, and 
Consumer Assessment of Healthcare Providers and Systems (CAHPS[supreg]) 
Hospice Survey. Section 1814(i)(5) of the Act requires the Secretary to 
establish and maintain a quality

[[Page 19451]]

reporting program for hospices. Section 1814(i)(5)(A)(i) of the Act was 
amended by section 407(b) of Division CC, Title IV of the CAA 2021 
(Pub. L. 116-260) to change the payment reduction for failing to meet 
hospice quality reporting requirements from 2 to 4 percentage points. 
This policy will apply beginning with FY 2024 annual payment update 
(APU) that is based on CY 2022 quality data. Specifically, the Act 
requires that, beginning with FY 2014 through FY 2023, the Secretary 
shall reduce the market basket update by 2 percentage points and 
beginning with the FY 2024 APU and for each subsequent year, the 
Secretary shall reduce the market basket update by 4 percentage points 
for any hospice that does not comply with the quality data submission 
requirements for that FY.
    Depending on the amount of the annual update for a particular year, 
a reduction of 2 percentage points through FY 2023 or 4 percentage 
points beginning in FY 2024 could result in the annual market basket 
update being less than zero percent for a FY and may result in payment 
rates that are less than payment rates for the preceding FY. Any 
reduction based on failure to comply with the reporting requirements, 
as required by section 1814(i)(5)(B) of the Act, would apply only for 
the specified year.
    In the FY 2022 Hospice Wage Index and Payment Rate Update final 
rule (86 FR 42552), we finalized two new measures using claims data: 
(1) Hospice Visits in the Last Days of Life (HVLDL); and (2) Hospice 
Care Index (HCI). We also finalized a policy that claims-based measures 
will use 8 quarters of data in order to report on more hospices. In 
addition, we removed the seven Hospice Item Set (HIS) Process Measures 
from the program as individual measures and public reporting because 
the HIS Comprehensive Assessment Measure (NQF#3235) is sufficient for 
measuring care at admission without the seven individual process 
measures. For a detailed discussion of the historical use for measure 
selection and removal for the HQRP quality measures, we refer readers 
to the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR 
47142) and the FY 2019 Hospice Wage Index and Rate Update final rule 
(83 FR 38622). In the FY 2022 Hospice Wage Index and Rate Update final 
rule (86 FR 42553), we finalized Sec.  418.312(b)(2); this new 
provision requires hospices to provide administrative data, including 
claims-based measures, as part of the HQRP requirements for Sec.  
418.306(b). In that same final rule, we provided CAHPS Hospice Survey 
updates. We finalized temporary changes to our public reporting 
policies based on the March 27, 2020 memorandum \3\ and provided 
another tip sheet, referred to as the Second Edition HRQP Public 
Reporting Tip Sheet (https://www.cms.gov/files/document/second-edition-hqrp-public-reporting-tip-sheetpdf.pdf) on the HQRP Requirements and 
Best Practices web page (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/HQRP-Requirements-and-Best-Practices).
---------------------------------------------------------------------------

    \3\ Exceptions and Extensions for Quality Reporting Requirements 
for Acute Care Hospitals, PPS-Exempt Cancer Hospitals, Inpatient 
Psychiatric Facilities, Skilled Nursing Facilities, Home Health 
Agencies, Hospices, Inpatient Rehabilitation Facilities, Long-Term 
Care Hospitals, Ambulatory Surgical Centers, Renal Dialysis 
Facilities, and MIPS Eligible Clinicians Affected by COVID-19. 
Available at: https://www.cms.gov/files/document/guidance-memo-exceptions-and-extensions-quality-reporting-and-value-based-purchasing-programs.pdf
---------------------------------------------------------------------------

    As finalized in the FY 2022 Hospice Wage Index and Payment Rate 
Update final rule (86 FR 42552), CMS is targeting the May 2022 refresh 
of Care Compare/Provider Data Catalogue (PDC) for the inaugural display 
of the two new claims-based quality measures (QMs), the Hospice Visits 
in Last Days of Life (HVLDL) and the Hospice Care Index (HCI). This 
rule proposes no new quality measures but proposes updates on already-
adopted measures. Table 5 shows all quality measures finalized in the 
FY 2022 Hospice Wage Index and Payment Rate Update final rule and in 
effect for the FY 2023 HQRP.

  Table 5--Quality Measures Finalized in the FY 2022 Hospice Wage Index
 Final Rule and in Effect for FY 2023 for the Hospice Quality Reporting
                                 Program
------------------------------------------------------------------------
                    Hospice quality reporting program
-------------------------------------------------------------------------
              NQF#                           Hospice item set
------------------------------------------------------------------------
3235............................  Hospice and Palliative Care Composite
                                   Process Measure--HIS-Comprehensive
                                   Assessment Measure at Admission
                                   includes:
                                     1. Patients Treated with an Opioid
                                      who are Given a Bowel Regimen (NQF
                                      #1617).
                                  2. Pain Screening.
                                  3. Pain Assessment.
                                  4. Dyspnea Treatment.
                                  5. Dyspnea Screening.
                                  6. Treatment Preferences.
                                  7. Beliefs/Values Addressed (if
                                   desired by the patient).
------------------------------------------------------------------------
          Administrative Data, including Claims-based Measures
------------------------------------------------------------------------
3645                              Hospice Visits in Last Days of Life
                                   (HVLDL).
Pending NQF endorsement.........  Hospice Care Index (HCI).

[[Page 19452]]

 
                                     1. Continuous Home Care (CHC) or
                                      General Inpatient (GIP) Provided.
                                  2. Gaps in Skilled Nursing Visits.
                                  3. Early Live Discharges.
                                  4. Late Live Discharges.
                                  5. Burdensome Transitions (Type 1)--
                                   Live Discharges from Hospice Followed
                                   by Hospitalization and Subsequent
                                   Hospice Readmission.
                                  6. Burdensome Transitions (Type 2)--
                                   Live Discharges from Hospice Followed
                                   by Hospitalization with the Patient
                                   Dying in the Hospital.
                                  7. Per-beneficiary Medicare Spending.
                                  8. Skilled Nursing Care Minutes per
                                   Routine Home Care (RHC) Day.
                                  9. Skilled Nursing Minutes on Weekends
                                  10. Visits Near Death.
------------------------------------------------------------------------
                          CAHPS Hospice Survey
------------------------------------------------------------------------
2651............................  CAHPS Hospice Survey.
                                     1. Communication with Family.
                                  2. Getting timely help.
                                  3. Treating patient with respect.
                                  4. Emotional and spiritual support.
                                  5. Help for pain and symptoms.
                                  6. Training family to care for the
                                   patient.
                                  7. Rating of this hospice.
                                  8. Willing to recommend this hospice.
------------------------------------------------------------------------

2. Hospice Outcomes & Patient Evaluation (HOPE) Update
    As finalized in the FY 2020 Hospice Wage Index and Payment Rate 
Update and Hospice Quality Reporting Requirements final rule (84 FR 
38484), we are developing a hospice patient assessment instrument 
identified as HOPE. HOPE contributes to the patient's plan of care 
through on-going patient assessments throughout the hospice stay. HOPE 
is designed to support the hospice conditions of participation (CoPs), 
including hospices' quality assessment and performance improvement 
(QAPI) and provide quality data to calculate outcome and other types of 
quality measures. Our primary objectives for HOPE are to provide 
quality data for the HQRP requirements through standardized data 
collection; support survey and certification processes; and provide 
additional clinical data that could inform future payment refinements.
    HOPE is an on-going patient assessment instrument designed to 
capture patient and family care needs throughout the hospice stay. HOPE 
supports care planning, quality improvement efforts, and health and 
safety of patients enrolled in Medicare-certified hospices. HOPE will 
include key items from the HIS and demographics like gender and race. 
Some HIS items will be modified for inclusion in HOPE to increase 
specificity. This approach to include key demographic information 
reflects stakeholder feedback discussed in the FYs 2017 and 2018 
Hospice Wage Index and Payment Rate Update final rules (81 FR 52171 and 
82 FR 36669, respectively).
    HOPE is multidisciplinary, with the assessment instrument to be 
completed by nursing, social work, and spiritual care staff. We are 
undergoing testing with three distinct disciplinary assessments in beta 
field testing described in this section. We stated in the FY 2022 
Hospice Wage Index and Payment Update final rule (86 FR 42528) that 
while the standardized patient assessment data elements for certain 
post-acute care providers required under the IMPACT Act of 2014 are not 
applicable to hospices, it is reasonable to include some of those 
standardized elements that appropriately and feasibly apply to hospice. 
Some patients may move through the healthcare system to hospice. 
Therefore, tracking key demographic and social risk factor items that 
apply to hospice support our goals for continuity of care, overall 
patient care and well-being, interoperability, and health equity that 
is also discussed in this rule.
    The draft of HOPE has undergone cognitive, pilot, and alpha 
testing, and is undergoing national beta field testing to establish 
reliability, validity, and feasibility of the assessment instrument. 
The purpose of the alpha test was to establish preliminary reliability 
and validity of the draft assessment items, and feasibility of the HOPE 
assessment. Specifically, the objectives were to:
    <bullet> Establish inter-rater reliability (IRR) of the assessment 
items.
    <bullet> Demonstrate validity of the assessment items.
    <bullet> Demonstrate feasibility of the assessment and time points 
for data collection.
    HOPE alpha testing completed at the end of January 2021. Based on 
the quantitative data analyses and feedback from assessors in alpha 
testing, the items generally support the feasibility of collecting the 
data items. Alpha testing also showed that HOPE exhibited acceptable 
inter-rater reliability ranging from moderate to very good with few 
exceptions and demonstrated evidence of convergent validity. We used 
findings of the alpha test to inform decisions about the next draft of 
the HOPE assessment, which are being tested in the national beta test 
that began in late fall 2021 and continuing through 2022.
    National beta testing allows us to obtain input from participating 
hospice teams about the assessment instrument and field testing to 
refine and support the final draft items and assessment time points for 
HOPE. It also allows us to estimate the time to complete the HOPE data 
items. We anticipate proposing HOPE in future rulemaking after testing 
and analyses are complete.

[[Page 19453]]

    We continue HOPE development in accordance with the Blueprint for 
the CMS Measures Management System. HOPE development is grounded in 
information gathering activities to identify and refine hospice 
assessment domains and candidate assessment items. We appreciate the 
industry's and national associations' engagement in providing input 
through information sharing activities, including listening sessions, 
expert interviews, key stakeholder interviews, and focus groups to 
support HOPE development. As CMS proceeds with field testing HOPE, we 
will continue to engage with stakeholders through sub-regulatory 
channels. In particular, we will continue to host HQRP Forums to allow 
hospices and other interested parties to engage with us on the latest 
updates and ask questions on the development of HOPE and related 
quality measures. We also have a dedicated email account, 
<a href="/cdn-cgi/l/email-protection#6c24031f1c050f092d1f1f091f1f010902182c0f011f4204041f420b031a"><span class="__cf_email__" data-cfemail="0d45627e7d646e684c7e7e687e7e606863794d6e607e2365657e236a627b">[email protected]</span></a>, for comments about HOPE.
    We will use field test results to create a final version of HOPE to 
propose in future rulemaking for national implementation. We will 
continue to engage all stakeholders throughout this process that 
includes a variety of sub-regulatory channels and regular HQRP 
communication strategies, such as Open Door Forums, Medicare Learning 
Network (MLN), CMS.gov website announcements, listserv messaging, and 
other ad hoc publicly announced opportunities. We appreciate the 
support for HOPE and reiterate our commitment to providing updates and 
engaging stakeholders through sub-regulatory means. HOPE updates can be 
found at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/HOPE and engagement 
opportunities, including those regarding HOPE are at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-QRP-Provider-Engagement-Opportunities.
3. Update on Future Quality Measure (QM) Development
    In the FY 2020 Hospice Wage Index and Payment Rate Update final 
rule (84 FR 38484), we provided updates related to CMS's process for 
identifying high priority areas of quality measurement and improvement 
and for developing quality measures that address those priorities. 
Information on the current HQRP quality measures can be found at: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Current-Measures. In this 
proposed rule, we provide contemplated updates for hospice quality 
measure concepts based on future use of HOPE and administrative data. 
In section III.B.6 of this proposed rule, we are seeking public comment 
from hospices on their health equity initiatives and a structural 
composite measure concept to inform future measure development.
    To support new measure development, our contractor convened two 
technical expert panel (TEP) meetings in 2021. The TEP considered HOPE-
based process measures that may be proposed with HOPE in future 
rulemaking. The TEP meetings in 2021 included HOPE-based process 
measures intended to (1) evaluate the rate at which hospices' use 
specific processes of care; (2) assist in reducing variation in care 
delivery; and (3) determine hospices' compliance with practices that 
are expected to improve outcomes. The TEP also considered potential 
areas for future quality measure development. We refer the public to 
the ``2021 Technical Expert Panel Meetings: Hospice Quality Reporting 
Program Summary Report'' available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-QRP-Provider-Engagement-Opportunities.
    As stated in the FY 2022 Hospice Wage Index and Rate Update final 
rule (86 FR 42528), we continue to consider developing hybrid quality 
measures that could be calculated from multiple data sources: for 
example, claims, assessments (HOPE), or other data sources. Hybrid 
quality measures allow for a more comprehensive set of information 
about care processes and outcomes than can be calculated using claims 
data alone. As described in the ``2021 Technical Expert Panel Meetings: 
Hospice Quality Reporting Program Summary Report,'' the TEP discussed 
hybrid concepts such as hospitalizations during a hospice election and 
patterns of live discharge using claims data and HOPE data elements.
4. Updates to the CAHPS Hospice Survey Participation Requirements for 
the FY 2023 APU and Subsequent Years
a. Background and Description of the CAHPS Hospice Survey
    The CAHPS Hospice Survey is a component of the CMS HQRP, which is 
used to collect data on the experiences of hospice patients and the 
primary caregivers listed in their hospice records. Readers who want 
more information about the development of the survey, originally called 
the Hospice Experience of Care Survey, may refer to 79 FR 50452 and 78 
FR 48261.
b. Overview of the ``CAHPS Hospice Survey Measures''
    The CAHPS Hospice Survey measures were re-endorsed by NQF on 
November 20, 2020. The re-endorsement can be found on the NQF website 
at: https://www.qualityforum.org/Measures_Reports_Tools.aspx. The 
survey received its initial NQF endorsement on October 26, 2016 (NQF 
#2651). We adopted 8 survey-based measures for the CY 2018 data 
collection period and for subsequent years. These eight measures are 
publicly reported on a designated CMS website, Care Compare, https://www.medicare.gov/care-compare/.
c. CAHPS Hospice Survey Mode Experiment
    CMS recently conducted a mode experiment with the goal of testing 
the effects of adding a web-based mode to the CAHPS Hospice Survey. We 
are examining the impact of a web-based mode on survey response rates 
and scores. The survey currently has three approved modes without any 
web component (mail, telephone, and mail with telephone follow-up.). In 
addition, the test will allow for examination of the effects of a 
shortened survey (that is, removing existing survey items) on response 
rate and scores; assessment of the measure properties of a limited 
number of supplemental survey items suggested by stakeholders; and 
calculation of item-level mode adjustments for the shortened survey in 
the currently-approved modes of CAHPS Hospice Survey administration, as 
well as the proposed new web-based mode.
    The mode experiment design applied all of the existing CAHPS 
Hospice Survey eligibility criteria, and sampled patients/caregivers 
across five arms. The first arm tested a new web-mail mode, in which 
invitations to the web survey were sent by email to those with email 
addresses. The email was personalized to the respondent and included a 
link to the web version of the survey, which can be completed on either 
a computer or a mobile device such as a smartphone or tablet. If the 
respondent did not complete the web survey after one week, or did not 
have a valid email address in which to send an email, up to two surveys 
were sent by mail. This arm used a shortened version of the CAHPS 
Hospice Survey.
    In the next three arms, the shortened version of the CAHPS Hospice 
Survey instrument was administered in the three currently-approved 
modes: Mail only; telephone-only; and mixed mode

[[Page 19454]]

(mail with telephone follow up). The fifth arm, in which the current 
survey instrument was administered via mail only served as a comparison 
for all other arms. Across all arms, half of sampled caregivers 
received a pre-notification letter to examine the effects of such a 
letter on response rates.
    Overall (across the five arms), CMS sampled 15,000 eligible 
caregivers from around 50 hospices over a six- to seven-month period. 
Caregivers were randomized within each hospice to one of the five arms.
    We continue to analyze the results of the mode experiment and will 
keep stakeholders informed on any plans for changes to the survey 
content or administration options through our regular stakeholder 
communication channels. In this proposed rule, there are no changes to 
the administration procedures or content for the CAHPS Hospice Survey. 
Any changes to the CAHPS Hospice Survey will be proposed in future 
rulemaking.
d. Data Sources
    In the FY 2020 Hospice Wage Index and Rate Update final rule (84 FR 
38484), we finalized the participation requirements for the CAHPS 
Hospice Survey. To meet the CAHPS Hospice Survey requirements for the 
HQRP, hospice facilities must contract with a CMS-approved vendor to 
collect survey data for eligible patients on a monthly basis and report 
that data to CMS on the hospice's behalf by the quarterly deadlines 
established for each data collection period.
e. Public Reporting of CAHPS Hospice Survey Results
    We began public reporting of the results of the CAHPS Hospice 
Survey on Hospice Compare as of February 2018. Before the COVID-19 PHE, 
we reported the most recent 8 quarters of data on the basis of a 
rolling average, with the most recent quarter of data being added and 
the oldest quarter of data removed from the averages for each data 
refresh. As finalized in the FY 2022 Hospice Wage Index and Payment 
Rule Update (86 FR 42528), we are not reporting Q1 2020 and Q2 2020 
data due to the COVID-19 PHE. Therefore, we have publicly reported the 
most recently available 8 quarters of CAHPS data that excluded Q1 2020 
and Q2 2020 data. These data were publicly reported starting with the 
February 2022 refresh and will continue through the May 2023 refresh on 
Care Compare. The Second Edition HQRP Public Reporting Tip Sheet dated 
Dec. 2021 on the HQRP Requirements and Best Practices web page (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/HQRP-Requirements-and-Best-Practices) summarizes CMS' approach to the HQRP as public reporting has 
resumed in February 2022. It also explains the HQRP public reporting 
changes associated with the FY 2022 Hospice Wage Index and Payment Rule 
Update final rule and provides a summary of the data refreshes.
f. Volume-Based Exemption for CAHPS Hospice Survey Data Collection and 
Reporting Requirements
    In the FY 2020 Hospice Wage Index and Rate Update final rule (84 FR 
38526), we finalized a policy making a volume-based exemption for CAHPS 
Hospice Survey Data Collection and Reporting requirements for FY 2021 
and every year thereafter.
    In this proposed rule, there would be no changes to this exemption. 
The exemption request form is available on the official CAHPS Hospice 
Survey website: http://www.hospiceCAHPSsurvey.org. Hospices that intend 
to claim the size exemption are required to submit to CMS their 
completed exemption request form by December 31, of the data collection 
year.
    Hospices that served a total of fewer than 50 survey-eligible 
decedent/caregiver pairs in the year before the data collection year 
are eligible to apply for the size exemption. Hospices may apply for a 
size exemption by submitting the size exemption request form. The size 
exemption is only valid for the year on the size exemption request 
form. If the hospice remains eligible for the size exemption, the 
hospice must complete the size exemption request form for every 
applicable FY APU period, as shown in Table 6.

                            Table 6--Size Exemption Key Dates FY 2023 Through FY 2026
----------------------------------------------------------------------------------------------------------------
                                                                                           Size exemption form
             Fiscal year                 Data collection year        Reference year        submission deadline
----------------------------------------------------------------------------------------------------------------
FY 2023..............................  CY 2021................  CY 2020................  December 31, 2021.
FY 2024..............................  CY 2022................  CY 2021................  December 31, 2022.
FY 2025..............................  CY 2023................  CY 2022................  December 31, 2023.
FY 2026..............................  CY 2024................  CY 2023................  December 31, 2024.
----------------------------------------------------------------------------------------------------------------

g. Newness Exemption for CAHPS Hospice Survey Data Collection and 
Public Reporting Requirements
    We previously finalized a one-time newness exemption for hospices 
that meet the criteria as stated in the FY 2017 Hospice Wage Index and 
Payment Rate Update final rule (81 FR 52181). In the FY 2019 Hospice 
Wage Index and Payment Rate Update final rule (83 FR 38642), we 
continued the newness exemption for FY 2023, and all subsequent years. 
We encourage hospices to keep the letter they receive providing them 
with their CMS Certification Number (CCN). The letter can be used to 
show when you received your number.
h. Survey Participation Requirements
    We previously finalized survey participation requirements for FY 
2022 through FY 2025 as stated in the FY 2018 and FY 2019 Hospice Wage 
Index and Payment Rate Update final rules (82 FR 36670 and 83 FR 38642 
through 38643). We also continued those requirements in all subsequent 
years (84 FR 38526). Table 7 restates the data submission dates for FY 
2023 through FY 2025.

  Table 7--CAHPS Hospice Survey Data Submission Dates for the APU in FY
                       2023, FY 2024, and FY 2025
------------------------------------------------------------------------
                                                   CAHPS quarterly data
        Sample months (month of death) *           submission deadlines
                                                            **
------------------------------------------------------------------------
FY 2023 APU

[[Page 19455]]

 
    CY January-March 2021 (Quarter 1)...........  August 11, 2021.
    CY April-June 2021 (Quarter 2)..............  November 10, 2021.
    CY July-September 2021 (Quarter 3)..........  February 9, 2022.
    CY October-December 2021 (Quarter 4)........  May 11, 2022.
FY 2024 APU
    CY January-March 2022 (Quarter 1)...........  August 10, 2022.
    CY April-June 2022 (Quarter 2)..............  November 9, 2022.
    CY July-September 2022 (Quarter 3)..........  February 8, 2023.
    CY October-December 2022 (Quarter 4)........  May 10, 2023.
FY 2025 APU
    CY January-March 2023 (Quarter 1)...........  August 9, 2023.
    CY April-June 2023 (Quarter 2)..............  November 8, 2023.
    CY July-September 2023 (Quarter 3)..........  February 14, 2024.
    CY October-December 2023 (Quarter 4)........  May 8, 2024.
------------------------------------------------------------------------
* Data collection for each sample month initiates 2 months following the
  month of patient death (for example, in April for deaths occurring in
  January).
** Data submission deadlines are the second Wednesday of the submission
  months, which are the months August, November, February, and May.

    For further information about the CAHPS Hospice Survey, we 
encourage hospices and other entities to visit: https://www.hospiceCAHPSsurvey.org. For direct questions, contact the CAHPS 
Hospice Survey Team at <a href="/cdn-cgi/l/email-protection#e880879b98818b8daba9a0b8bb9b9d9a9e8d91a8a0abb9a1bbc6879a8f"><span class="__cf_email__" data-cfemail="254d4a56554c464066646d757656505753405c656d66746c760b4a5742">[email protected]</span></a> or call 1-(844) 
472-4621.
i. CAHPS Hospice Survey Star Ratings
    We previously finalized a policy requiring us to display Hospice 
CAHPS Survey Star Ratings no sooner than FY 2022 as stated in the FY 
2022 Hospice Wage Index and Payment Rule Update rule (86 FR 42528). 
Star Ratings will be publicly reported on Care Compare on Medicare.gov 
beginning with the August 2022 refresh. This start date allowed CMS to 
conduct a dry run of the Star Ratings with reporting to hospices via 
preview reports. Hospices first saw their Star Ratings in their preview 
reports during the November 2021 and March 2022 preview periods for the 
February 2022 and May 2022 updates of Care Compare on Medicare.gov. 
However, the CAHPS Hospice Survey Star Ratings will not be publicly 
reported in February or May 2022. The reporting period for the dry run 
covers data from Q4 2018 through Q4 2019 and Q3 2020 through Q1 2021. 
Detailed information about the calculation and display of Hospice CAHPS 
Survey Star Ratings can be found on the official CAHPS Hospice Survey 
website: http://www.hospiceCAHPSsurvey.org. There are no changes to the 
Hospice CAHPS Survey Star Ratings for FY 2023.
5. Form, Manner, and Timing of Quality Data Submission
a. Statutory Penalty for Failure To Report
    Section 1814(i)(5)(C) of the Act requires that each hospice submit 
data to the Secretary on quality measures specified by the Secretary. 
Such data must be submitted in a form and manner, and at a time 
specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act was 
amended by the CAA 2021 and the payment reduction for failing to meet 
hospice quality reporting requirements is increased from 2 percent to 4 
percent beginning with FY 2024. The Act requires that, beginning with 
FY 2014 through FY 2023, the Secretary shall reduce the market basket 
update by 2 percentage points and then beginning in FY 2024 and for 
each subsequent year, the Secretary shall reduce the market basket 
update by 4 percentage points for any hospice that does not comply with 
the quality data submission requirements for that fiscal year. Last 
year, we revised our rule at Sec.  418.306(b)(2) in accordance with 
this statutory change (86 FR 42605).
b. Compliance
    HQRP Compliance requires understanding three timeframes for both 
HIS and CAHPS; (1) The relevant Reporting Year, payment FY and the 
Reference Year. The ``Reporting Year'' (HIS)/``Data Collection Year'' 
(CAHPS). This timeframe is based on the calendar year. It is the same 
calendar year for both HIS and CAHPS. If the CAHPS Data Collection year 
is CY 2023, then the HIS reporting year is also CY 2023. (2) The APU is 
subsequently applied to FY payments based on compliance in the 
corresponding Reporting Year/Data Collection Year; and (3) For the 
CAHPS Hospice Survey, the Reference Year is the CY prior to the Data 
Collection Year. The Reference Year applies to hospices submitting a 
size exemption from the CAHPS survey (there is no similar exemption for 
HIS). For example, for the CY 2023 data collection year, the Reference 
Year, is CY 2022. This means providers seeking a size exemption for 
CAHPS in CY 2023 would base it on their hospice size in CY 2022. 
Submission requirements are codified in Sec.  418.312.
    For every CY all Medicare-certified hospices are required to submit 
HIS and CAHPS data according to the requirements in Sec.  418.312. 
Table 8 summarizes the three timeframes. It illustrates how the CY 
interacts with the FY payments, covering the CY 2021 through CY 2024 
data collection periods and the corresponding APU application from FY 
2023 through FY 2026.

  Table 8--HQRP Reporting Requirements and Corresponding Annual Payment
                                 Updates
------------------------------------------------------------------------
                                    Annual  payment   Reference year for
 Reporting year for HIS and data    update  impacts       CAHPS size
 collection year for  CAHPS data   payments for the    exemption (CAHPS
         (calendar year)                  FY                 only)
------------------------------------------------------------------------
CY 2021.........................  FY 2023 APU.......  CY 2020.
CY 2022.........................  FY 2024 APU *.....  CY 2021.
CY 2023.........................  FY 2025 APU.......  CY 2022.

[[Page 19456]]

 
CY 2024.........................  FY 2026 APU.......  CY 2023.
------------------------------------------------------------------------
* Beginning in FY 2024 and all subsequent years, the payment penalty is
  4 percent. Prior to FY 2024, the payment penalty is 2 percent.

    As illustrated in Table 8, CY 2021 data submissions compliance 
impacts the FY 2023 APU. CY 2022 data submissions compliance impacts 
the FY 2024 APU. CY 2023 data submissions compliance impacts FY 2025 
APU. This CY data submission impacting FY APU pattern follows for 
subsequent years.
c. Submission Data and Requirements
    As finalized in the FY 2016 Hospice Wage Index and Payment Rate 
Update final rule (80 FR 47192), hospices' compliance with HIS 
requirements beginning with the FY 2020 APU determination (that is, 
based on HIS- Admission and Discharge records submitted in CY 2018) are 
based on a timeliness threshold of 90 percent. This means CMS requires 
that hospices submit 90 percent of all required HIS records within 30-
days of the event (that is, patient's admission or discharge). The 90-
percent threshold is hereafter referred to as the timeliness compliance 
threshold. Ninety percent of all required HIS records must be submitted 
and accepted within the 30-day submission deadline to avoid the 
statutorily-mandated payment penalty. Hospice compliance with claims 
data requirements is based on administrative data collection. Since 
Medicare claims data are already collected from claims, hospices are 
considered 100 percent compliant with the submission of these data for 
the HQRP. There is no additional submission requirement for 
administrative data.
    To comply with CMS' quality reporting requirements for CAHPS, 
hospices are required to collect data monthly using the CAHPS Hospice 
Survey. Hospices comply by utilizing a CMS-approved third-party vendor. 
Approved Hospice CAHPS vendors must successfully submit data on the 
hospice's behalf to the CAHPS Hospice Survey Data Center. A list of the 
approved vendors can be found on the CAHPS Hospice Survey website: 
www.hospicecahpssurvey.org. Table 9. HQRP Compliance Checklist 
illustrates the APU and timeliness threshold requirements.

                   Table 9--HQRP Compliance Checklist
------------------------------------------------------------------------
    Annual payment update              HIS                  CAHPS
------------------------------------------------------------------------
FY 2023.....................  Submit at least 90    Ongoing monthly
                               percent of all HIS    participation in
                               records within 30     the Hospice CAHPS
                               days of the event     survey 1/1/2021-12/
                               date (patient's       31/2021.
                               admission or
                               discharge) for
                               patient admissions/
                               discharges
                               occurring 1/1/21-12/
                               31/21.
FY 2024.....................  Submit at least 90    Ongoing monthly
                               percent of all HIS    participation in
                               records or its        the Hospice CAHPS
                               successor             survey 1/1/2022-12/
                               instrument within     31/2022.
                               30 days of the
                               event date
                               (patient's
                               admission or
                               discharge) for
                               patient admissions/
                               discharges
                               occurring 1/1/22-12/
                               31/22.
FY 2025.....................  Submit at least 90    Ongoing monthly
                               percent of all HIS    participation in
                               records or its        the Hospice CAHPS
                               successor             survey 1/1/2023-12/
                               instrument within     31/2023.
                               30 days of the
                               event date
                               (patient's
                               admission or
                               discharge) for
                               patient admissions/
                               discharges
                               occurring 1/1/23-12/
                               31/23.
------------------------------------------------------------------------
Note: The data source for the claims-based measures will be Medicare
  claims data that are already collected and submitted to CMS. There is
  no additional submission requirement for administrative data (Medicare
  claims), and hospices with claims data are 100-percent compliant with
  this requirement.

    Most hospices that fail to meet HQRP requirements do so because 
they miss the 90 percent threshold. We offer many training and 
education opportunities through our website, which are available 24/7, 
365 days per year, to enable hospice staff to learn at the pace and 
time of their choice. We want hospices to be successful with meeting 
the HQRP requirements. We encourage hospices to use this website at: 
https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Quality-Reporting-Training-Training-and-Education-Library. For more information about 
HQRP Requirements, we refer readers to visit the frequently-updated 
HQRP website and especially the Best Practice, Education and Training 
Library, and Help Desk web pages at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting. We also encourage readers to visit the HQRP web page and 
sign-up for the Hospice Quality ListServ to stay informed about HQRP.
6. Request for Information Related to the HQRP Health Equity Initiative
    CMS defines health equity as ``the attainment of the highest level 
of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes.'' CMS is working to 
advance health equity by designing, implementing, and operationalizing 
policies and programs that support health for all the people served by 
our programs, eliminating avoidable differences in health outcomes 
experienced by people who are disadvantaged or underserved, and 
providing the care and support that our enrollees need to thrive. CMS' 
goals are in line with Executive Order 13985, on the Advancement of 
Racial Equity and Support for the Underserved Communities, which can be 
found at: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/06/25/executive-order-on-diversity-equity-inclusion-and-accessibility-in-the-federal-workforce/.
    Belonging to an underserved community is often associated with 
worse health outcomes.<SUP>4 5 6 7 8 9 10 11</SUP> Such

[[Page 19457]]

disparities in health outcomes are the result of multiple factors. 
Although not the sole determinants, poor access to care and provision 
of lower quality health care are important contributors to health 
disparities notable for CMS programs. Health inequities persist in 
hospice and palliative care, where Black and Hispanic populations are 
less likely to utilize care and over 80 percent of patients are 
White.<SUP>12 13 14 15</SUP> After hospice admission, racial and ethnic 
disparities appear to impact quality of care and health outcomes.\16\ 
Black patients may receive fewer supportive care medications despite 
higher symptom burdens, experience care less consistent with their 
expressed preferences, and encounter worse end-of-life 
communication.<SUP>17 18 19 20 21</SUP> In response to these 
disparities, 70 percent of home health organizations, including 22 
percent that are hospices, indicated they would increase the resources 
dedicated to diversity, equity, and inclusion in 2021.\22\ One 
important strategy for addressing these disparities is improving data 
collection to allow for better measurement and reporting on equity 
across our programs and policies.<SUP>23 24</SUP>
---------------------------------------------------------------------------

    \4\ Joynt KE, Orav E, Jha AK. Thirty-Day Readmission Rates for 
Medicare Beneficiaries by Race and Site of Care. JAMA. 2011; 
305(7):675-681.
    \5\ Lindenauer PK, Lagu T, Rothberg MB, et al. Income Inequality 
and 30 Day Outcomes After Acute Myocardial Infarction, Heart 
Failure, and Pneumonia: Retrospective Cohort Study. British Medical 
Journal. 2013; 346.
    \6\ Trivedi AN, Nsa W, Hausmann LRM, et al. Quality and Equity 
of Care in U.S. Hospitals. New England Journal of Medicine. 2014; 
371(24):2298- 2308.
    \7\ Polyakova, M., et al. Racial Disparities In Excess All-Cause 
Mortality During The Early COVID-19 Pandemic Varied Substantially 
Across States. Health Affairs. 2021; 40(2): 307-316.
    \8\ Rural Health Research Gateway. Rural Communities: Age, 
Income, and Health Status. Rural Health Research Recap. November 
2018.
    \9\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \10\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
    \11\ Poteat TC, Reisner SL, Miller M, Wirtz AL. COVID-19 
Vulnerability of Transgender Women With and Without HIV Infection in 
the Eastern and Southern U.S. Preprint. medRxiv. 
2020;2020.07.21.20159327. Published 2020 Jul 24. doi:10.1101/
2020.07.21.20159327.
    \12\ Addressing Disparities in Hospice & Palliative Care. 
Nalley, Catlin. Oncology Times: March 20, 2021-Volume 43-Issue 6-p 
1,10doi: 10.1097/01.COT.0000741732.73529.bb.
    \13\ https://journalofethics.ama-assn.org/article/racial-disparities-hospice-moving-analysis-intervention/2006-09.
    \14\ Capital Caring, Seasons Execs: Improving Hospice Diversity 
Starts from the Inside Out. 11/17/21. Holly Vossel. Capital Caring, 
Seasons Execs: Improving Hospice Diversity Starts from the Inside 
Out--Hospice & Palliative Care Network of Maryland https://hospicenews.com/2021/11/17/capital-caring-seasons-execs-improving-hospice-diversity-starts-from-the-inside-out/.
    \15\ Disparities in Palliative and Hospice Care and Completion 
of Advance Care Planning and Directives Among Non-Hispanic Blacks: A 
Scoping Review of Recent Literature (nih.gov).
    \16\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3822363/.
    \17\ Naming the Problem: A Structural Racism Framework to 
Examine Disparities in Palliative Care--ScienceDirect.
    \18\ Johnson KS. Racial and ethnic disparities in palliative 
care. J Palliat Med 2013;16:1329-1334.
    \19\ Elk R, Felder TM, Cayir E, Samuel CA. Social inequalities 
in palliative care for cancer patients in the United States: 
astructured review. Semin Oncol Nurs 2018;34:303-315.
    \20\ Elliott AM, Alexander SC, Mescher CA, Mohan D, Bar-nato AE. 
Differences in physicians' verbal and nonverbal communication with 
black and white patients at the end of life. J Pain Symptom Manage 
2016;51:1-8.
    \21\ Johnson RL, Roter D, Powe NR, Cooper LA. Patient race/
ethnicity and quality of patient-physician communication during 
medical visits. Am J Public Health 2004;94:2084-2090.
    \22\ Capital Caring, Seasons Execs: Improving Hospice Diversity 
Starts from the Inside Out. 11/17/21. Holly Vossel. Capital Caring, 
Seasons Execs: Improving Hospice Diversity Starts from the Inside 
Out--Hospice & Palliative Care Network of Maryland https://hospicenews.com/2021/11/17/capital-caring-seasons-execs-improving-hospice-diversity-starts-from-the-inside-out/.
    \23\ https://hospicenews.com/2021/05/27/hospice-providers-leverage-data-to-reach-the-underserved/.
    \24\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3822363/.
---------------------------------------------------------------------------

    We are committed to achieving equity in health care outcomes for 
our beneficiaries by supporting providers in quality improvement 
activities to reduce health inequities, enabling beneficiaries to make 
more informed decisions, and promoting provider accountability for 
health care disparities.<SUP>25 26</SUP> CMS is committed to closing 
the equity gap in CMS quality programs. For more information on the 
portfolio of programs aimed at making information on the quality of 
health care providers and services, including disparities, more 
transparent, we refer readers to the FY 2022 Hospice Wage Index and 
Rate Update proposed rule (86 FR 19700).
---------------------------------------------------------------------------

    \25\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Downloads/CMS-Quality-Strategy.pdf.
    \26\ Report to Congress: Improving Medicare PostAcute Care 
Transformation (IMPACT) Act of 2014 Strategic Plan for Accessing 
Race and Ethnicity Data. January 5, 2017. Available at https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Research-Reports-2017-Report-to-Congress-IMPACT-ACT-of-2014.pdf.
---------------------------------------------------------------------------

    In the FY 2022 Hospice Wage Index and Rate Update final rule, we 
received comments supportive of gathering standardized patient 
assessment data elements and additional SDOH data to improve health 
equity. In parallel, commenters advocated for education efforts for 
beneficiaries, providers, and stakeholders on the benefits of 
collecting and reporting demographic and social risk factor data. We 
received many comments about the use of standardized patient assessment 
data elements in the hospice setting to assess health equity and SDOH, 
some of which raised concerns there may be unintended consequences. 
Many commenters noted that hospice patients have different goals of 
care than non-hospice patients, which does not align with standardized 
data elements for patient assessment. Commenters encouraged CMS to only 
utilize certain aspects of standardized data elements for patient 
assessment (specifically, Z-codes 55-65) in collecting health equity 
data. We refer the readers to review the summary of public comments 
received in the FY 2022 Hospice Wage Index and Rate Update final rule 
(86 FR 42528).
    We will continue to take all comments and suggestions into account 
as we work to develop policies on this important topic. We appreciate 
hospices and national organizations sharing their support and 
commitment to addressing health disparities and offering meaningful 
comments for consideration in the FY 2022 Hospice Wage Index and Rate 
Update final rule (86 FR 42528). Given the value of the comments thus 
far and the ongoing development of activities to improve health equity, 
we solicit public comment on the following questions:
    <bullet> What efforts does your hospice employ to recruit staff, 
volunteers, and board members from diverse populations to represent and 
serve underserved populations? How does your hospice attempt to bridge 
any cultural gaps between your personnel and beneficiaries/clients? How 
does your hospice measure whether this has an impact on health equity?
    <bullet> How does your hospice currently identify barriers to 
access in your community or service area? What are barriers to 
collecting data related to disparities, social determinants of health, 
and equity? What steps does your hospice take to address these 
barriers?
    <bullet> How does your hospice collect self-reported data such as 
race/ethnicity, veteran status, socioeconomic status, housing, food 
security, access to interpreter services, caregiving status, and 
marital status used to inform its health equity initiatives?
    <bullet> How is your hospice using qualitative data collection and 
analysis methods to measure the impact of its health equity 
initiatives?
    In addition, we are considering a structural composite measure 
based on information already collected by hospices. Specifically, the 
structural composite measure could include organizational activities to 
address access to and quality of hospice care for underserved 
populations. The composite structural measure concept could include 
hospice reported data on hospice activities to address

[[Page 19458]]

underserved populations' access to hospice care. For example, a hospice 
could receive a point for each domain where data are submitted to a CMS 
portal, regardless of the hospice's action in that domain (such as, 
reporting whether or not the hospice provided training for board 
members, leaders, staff and volunteers in culturally and linguistically 
appropriate services (CLAS), health equity, and implicit bias). The 
data could reflect the hospice's completed actions for each 
corresponding domain (for a total of three points) in a reporting year. 
A hospice could submit information such as documentation, examples, or 
narratives to qualify for the measure numerator. We are also seeking 
comment on how to score a domain for a hospice that submitted data 
reflecting no actions or partial actions in the given domain.
    Examples of the domains we are considering are described in the 
following outline. We seek comment on each of these domains, including 
specific suggestions on items that should be added, removed, or 
revised.
    Domain 1: Hospice commitment to reducing disparities is 
strengthened when equity is a key organizational priority. Candidate 
domain 1 could be satisfied when a hospice submits data on their 
actions regarding the role of health equity and community engagement in 
their strategic plan. Hospices could self-report data in the reporting 
year about their actions in each of the following areas, and submission 
of data for all elements could be required to qualify for the measure 
numerator.
    <bullet> Hospice attests whether its strategic plan includes 
approaches to address health equity in the reporting year.
    <bullet> Hospice reports community engagement and key stakeholder 
activities in the reporting year.
    <bullet> Hospice reports on any attempts to measure input from 
patients and caregivers about care disparities they may experience and 
recommendations or suggestions.
    Domain 2: Training board members, leaders, staff and volunteers in 
culturally and linguistically appropriate services (CLAS),\27\ health 
equity, and implicit bias is an important step hospices take to provide 
quality care to diverse populations. Candidate domain 2 could focus on 
hospices' diversity, equity, inclusion and CLAS training for board 
members, employed staff, and volunteers by capturing the following 
self-reported actions in the reporting year. Submission of relevant 
data for all elements could be required to qualify for the measure 
numerator.
---------------------------------------------------------------------------

    \27\ https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/CLAS-Toolkit-12-7-16.pdf.
---------------------------------------------------------------------------

    <bullet> Hospice attests whether employed staff were trained in 
CLAS and culturally sensitive care mindful of social determinants of 
health (SDOH) in the reporting year. Example data include specific 
training programs or training requirements for staff.
    <bullet> Hospice attests whether it provided resources to staff and 
volunteers about health equity, SDOH, and equity initiatives in the 
reporting year. Examples include the materials provided, webinars, or 
learning opportunities.
    Domain 3: Leaders and staff could improve their capacity to address 
disparities by demonstrating routine and thorough attention to equity 
and setting an organizational culture of equity. This candidate domain 
could capture activities related to organizational inclusion 
initiatives and capacity to promote health equity. Examples of equity-
focused factors include proficiency in languages other than English, 
experience working with populations in the service area, experience 
working on health equity issues, and experience working with 
individuals with disabilities.
    Submission of relevant data for all elements could be required to 
qualify for the measure numerator.
    <bullet> Hospice attests whether equity-focused factors were 
included in the hiring of hospice senior leadership, including chief 
executives and board of trustees, in the previous reporting year.
    <bullet> Hospice attests whether equity-focused factors were 
included in the hiring of hospice senior leadership, including chief 
executives and board of trustees, is more reflective of the services 
area patient than in the previous reporting year.
    <bullet> Hospice attests whether equity-focused factors were 
included in the hiring of direct patient care staff (for example, RNs, 
medical social workers, aides, volunteers, chaplains, or therapists) in 
the previous reporting year.
    <bullet> Hospice attests whether equity focused factors were 
included in the hiring of indirect care or support staff (for example. 
administrative, clerical, or human resources) in the previous reporting 
year.
    We are interested in developing health equity measures based on 
information collected by hospices not currently available on claims, 
assessments, or other publicly available data sources to support 
development of future quality measures. We are soliciting public 
comment on the conceptual domains and quality measures described in 
this section. Furthermore, we are soliciting public comments on 
publicly reporting a composite structural health equity quality 
measure; displaying descriptive information on Care Compare from the 
data hospices provide to support health equity measures; and the impact 
of the domains and quality measure concepts on organizational culture 
change.
7. Advancing Health Information Exchange Update
    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 and patient access 
to their digital health information.
    To further interoperability in post-acute care settings, CMS and 
the Office of the National Coordinator for Health Information 
Technology (ONC) participate in the Post-Acute Care Interoperability 
Workgroup (PACIO) to facilitate collaboration with industry 
stakeholders to develop Health Level Seven International[supreg] (HL7) 
Fast Healthcare Interoperability Resources[supreg] (FHIR) 
standards.\28\ These standards could support the exchange and reuse of 
patient assessment data derived from the Minimum Data Set (MDS), 
Inpatient Rehabilitation Facility-Patient Assessment Instrument (IRF-
PAI), LTCH Continuity Assessment Record and Evaluation (CARE) Data Set 
(LCDS), Outcome and Assessment Information Set (OASIS), and other 
sources. The PACIO Project has focused on HL7 FHIR implementation 
guides for functional status, cognitive status and new use cases on 
advance directives, re-assessment timepoints, and Speech Language, 
Swallowing, Cognitive communication and Hearing (SPLASCH) pathology. We 
encourage PAC provider and health (IT) vendor participation as the 
efforts advance.
---------------------------------------------------------------------------

    \28\ http://pacioproject.org/.
---------------------------------------------------------------------------

    The CMS Data Element Library (DEL) continues to be updated and 
serves as a resource for PAC assessment data elements and their 
associated mappings to health IT standards, such as Logical Observation 
Identifiers Names and Codes (LOINC) and Systematized Nomenclature of 
Medicine Clinical Terms (SNOMED). The DEL furthers CMS' goal of data 
standardization and interoperability. Standards in the DEL (https://del.cms.gov/DELWeb/pubHome) can be referenced on the CMS website

[[Page 19459]]

and in the ONC Interoperability Standards Advisory (ISA). The 2022 ISA 
is available at https://www.healthit.gov/isa.
    The 21st Century Cures Act (Cures Act) (Pub. L. 114-255, enacted 
December 13, 2016) required HHS and ONC to take steps to further 
interoperability for providers and settings across the care continuum. 
Section 4003(b) of the Cures Act required ONC to take steps to advance 
interoperability through the development of a trusted exchange 
framework and common agreement aimed at establishing a universal floor 
of interoperability across the country. On January 18, 2022, ONC 
announced a significant milestone by releasing the Trusted Exchange 
Framework \29\ and Common Agreement Version 1 \30\. The Trusted 
Exchange Framework is a set of non-binding principles for health 
information exchange, and the Common Agreement is a contract that 
advances those principles. The Common Agreement and the incorporated by 
reference Qualified Health Information Network Technical Framework 
Version 1 \31\ establish the technical infrastructure model and 
governing approach for different health information networks and their 
users to securely share clinical information with each other--all under 
commonly agreed to terms. The technical and policy architecture of how 
exchange occurs under the Trusted Exchange Framework and the Common 
Agreement follows a network-of-networks structure, which allows for 
connections at different levels and is inclusive of many different 
types of entities at those different levels, such as health information 
networks, healthcare practices, hospitals, public health agencies, and 
Individual Access Services (IAS) For more information, we refer readers 
to https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement.
---------------------------------------------------------------------------

    \29\ The Trusted Exchange Framework (TEF): Principles for 
Trusted Exchange (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf.
    \30\ Common Agreement for Nationwide Health Information 
Interoperability Version 1 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \31\ Qualified Health Information Network (QHIN) Technical 
Framework (QTF) Version 1.0 (Jan. 2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/QTF_0122.pdf.
---------------------------------------------------------------------------

    We invite readers to learn more about these important developments 
and how they are likely to affect hospices.

C. CAA 2021, Section 407. Establishing Hospice Program Survey and 
Enforcement Procedures Under the Medicare Program; Provisions Update

    Division CC, section 407 of the CAA 2021, amended Part A of Title 
XVIII of the Act to add a new section 1822, and amended sections 
1864(a) and 1865(b) of the Act, establishing new hospice program survey 
and enforcement requirements, required public reporting of survey 
information, and a new hospice hotline.
    The law requires public reporting of hospice program surveys 
conducted by both State Agencies (SAs) and Accrediting Organizations 
(AOs), as well as enforcement actions taken as a result of these 
surveys, on the CMS website in a manner that is prominent, easily 
accessible, searchable, and presented in a readily understandable 
format. It removes the prohibition at section 1865(b) of the Act of 
public disclosure of hospice surveys performed by AOs, and requires 
that AOs use the same survey deficiency reports as SAs (Form CMS-2567, 
``Statement of Deficiencies'' or a successor form) to report survey 
findings.
    The law also requires hospice programs to measure and reduce 
inconsistency in the application of survey results among all surveyors, 
and requires the Secretary to provide comprehensive training and 
testing of SA and AO hospice program surveyors, including training with 
respect to review of written plans of care. The statute prohibits SA 
surveyors from surveying hospice programs for which they have worked in 
the last 2 years or in which they have a financial interest, requires 
hospice program SAs and AOs to use a multidisciplinary team of 
individuals for surveys conducted with more than one surveyor to 
include at least one registered nurse, and provides that each SA must 
establish a dedicated toll-free hotline to collect, maintain, and 
update information on hospice programs and to receive complaints.
    The provisions in the CAA 2021 also direct the Secretary to create 
a Special Focus Program (SFP) for poor-performing hospice programs, 
sets out authority for imposing enforcement remedies for noncompliant 
hospice programs, and requires the development and implementation of a 
range of remedies as well as procedures for appealing determinations 
regarding these remedies. These remedies can be imposed instead of, or 
in addition to, termination of the hospice programs' participation in 
the Medicare program. The remedies include civil money penalties 
(CMPs), suspension of all or part of payments, and appointment of 
temporary management to oversee operations.
    In the CY 2022 Home Health Prospective Payment System (HH PPS) 
final rule (86 FR 62240), we addressed provisions related to the 
hospice survey enforcement and other activities described in this 
section. A summary of the finalized CAA provisions can be found in the 
CY 2022 HH PPS final rule: https://www.govinfo.gov/content/pkg/FR-2021-11-09/pdf/2021-23993.pdf. We finalized all the CAA provisions in CY 
2022 rulemaking except for the special focus program (SFP). As outlined 
in the CY 2022 HH PPS final rule, we stated that we would take into 
account comments that we received and work on a revised proposal, 
seeking additional collaboration with stakeholders to further develop 
the methodology for the SFP Since the publication of the CY 2022 HH PPS 
final rule, we have decided to initiate a hospice Technical Expert 
Panel (TEP) in CY 2022. Accordingly, CMS plans to use the TEP findings 
to further develop a proposal on the methodology for establishing the 
hospice SFP, and we plan to include a proposal implementing a SFP in 
the FY 2024 Hospice rulemaking proposed rule.

IV. Response to Comments

    Because of the large number of public comments, we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

V. Collection of Information

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

VI. Regulatory Impact Analysis

A. Statement of Need

    This proposed rule meets the requirements of our regulations at 
Sec.  418.306(c) and (d), which require annual issuance, in the Federal 
Register, of the hospice wage index based on the most current available 
CMS hospital wage data, including any changes to the definitions of 
CBSAs or previously used MSAs, as well as any

[[Page 19460]]

changes to the methodology for determining the per diem payment rates. 
This proposed rule would also update payment rates for each of the 
categories of hospice care, described in Sec.  418.302(b), for FY 2023 
as required under section 1814(i)(1)(C)(ii)(VII) of the Act. The 
payment rate updates are subject to changes in economy-wide 
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act. 
Lastly, section 3004 of the Affordable Care Act amended the Act to 
authorize a quality reporting program for hospices, and this rule does 
not change the requirements for the HQRP in accordance with section 
1814(i)(5) of the Act.

B. Overall Impacts

    We estimate that the aggregate impact of the payment provisions in 
this proposed rule would result in an estimated increase of $580 
million in payments to hospices, resulting from the hospice payment 
update percentage of 2.7 percent for FY 2023. The impact analysis of 
this proposed rule represents the projected effects of the changes in 
hospice payments from FY 2022 to FY 2023. Using the most recent 
complete data available at the time of rulemaking, in this case FY 2021 
hospice claims data as of January 21, 2022, we apply the current FY 
2022 wage index with the current labor shares. Using the same FY 2021 
data, we apply the FY 2023 wage index and the current labor share 
values to simulate FY 2022 payments. We then apply a budget neutrality 
adjustment so that the aggregate simulated payments do not increase or 
decrease due to changes in the wage index.
    Certain events may limit the scope or accuracy of our impact 
analysis, because such an analysis is susceptible to forecasting errors 
due to other changes in the forecasted impact time period. The nature 
of the Medicare program is such that the changes may interact, and the 
complexity of the interaction of these changes could make it difficult 
to predict accurately the full scope of the impact upon hospices.
    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), and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). 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.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.
    A regulatory impact analysis (RIA) must be prepared for major rules 
with economically significant effects ($100 million or more in any 1 
year). 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 RIA 
that, to the best of our ability presents the costs and benefits of the 
rulemaking.

C. Detailed Economic Analysis

1. Proposed Hospice Payment Update for FY 2023
    The FY 2023 hospice payment impacts appear in Table 10. We tabulate 
the resulting payments according to the classifications (for example, 
provider type, geographic region, facility size), and compare the 
difference between current and future payments to determine the overall 
impact. The first column shows the breakdown of all hospices by 
provider type and control (non-profit, for-profit, government, other), 
facility location, facility size. The second column shows the number of 
hospices in each of the categories in the first column. The third 
column shows the effect of using the FY 2023 updated wage index data 
with a 5-percent cap on wage index decreases. This represents the 
effect of moving from the FY 2022 hospice wage index to the FY 2023 
hospice wage index with a 5-percent cap on wage index decreases. The 
aggregate impact of the changes in column three is zero percent, due to 
the hospice wage index standardization factor. However, there are 
distributional effects of the FY 2023 hospice wage index. The fourth 
column shows the effect of the hospice payment update percentage as 
mandated by section 1814(i)(1)(C) of the Act, and is consistent for all 
providers. The proposed hospice payment update percentage of 2.7 
percent is based on the proposed 3.1 percent inpatient hospital market 
basket update, reduced by a proposed 0.4 percentage point productivity 
adjustment. The fifth column shows the effect of all the proposed 
changes on FY 2023 hospice payments. It is projected aggregate payments 
would increase by 2.7 percent; assuming hospices do not change their 
billing practices. As illustrated in Table 10, the combined effects of 
all the proposals vary by specific types of providers and by location. 
We note that simulated payments are based on utilization in FY 2021 as 
seen on Medicare hospice claims (accessed from the CCW in January 21, 
2022) and only include payments related to the level of care and do not 
include payments related to the service intensity add-on.
    As illustrated in Table 10, the combined effects of all the 
proposals vary by specific types of providers and by location.

[[Page 19461]]



                               Table 10--Projected Impact to Hospices for FY 2023
----------------------------------------------------------------------------------------------------------------
                                                             FY 2023 updated  FY 2023 proposed    Overall total
            Hospice subgroup                  Hospices       wage data >with   hospice payment    impact for FY
                                                                   cap           update (%)           2023
----------------------------------------------------------------------------------------------------------------
All Hospices............................             5,186              0.0%              2.7%              2.7%
Hospice Type and Control:
    Freestanding/Non-Profit.............               581              -0.1               2.7               2.6
    Freestanding/For-Profit.............             3,508               0.1               2.7               2.8
    Freestanding/Government.............                42               0.1               2.7               2.8
    Freestanding/Other..................               352              -0.1               2.7               2.6
    Facility/HHA Based/Non-Profit.......               347              -0.2               2.7               2.5
    Facility/HHA Based/For-Profit.......               200              -0.1               2.7               2.6
    Facility/HHA Based/Government.......                79              -0.1               2.7               2.6
    Facility/HHA Based/Other............                77              -0.3               2.7               2.4
        Subtotal: Freestanding Facility              4,483               0.0               2.7               2.7
         Type...........................
                                         -----------------------------------------------------------------------
        Subtotal: Facility/HHA Based                   703              -0.2               2.7               2.5
         Facility Type..................
                                         -----------------------------------------------------------------------
        Subtotal: Non-Profit............               928              -0.1               2.7               2.6
                                         -----------------------------------------------------------------------
        Subtotal: For Profit............             3,708               0.1               2.7               2.8
                                         -----------------------------------------------------------------------
        Subtotal: Government............               121               0.0               2.7               2.7
                                         -----------------------------------------------------------------------
        Subtotal: Other.................               429              -0.1               2.7               2.6
Hospice Type and Control: Rural:
    Freestanding/Non-Profit.............               132              -0.1               2.7               2.6
    Freestanding/For-Profit.............               351               0.0               2.7               2.7
    Freestanding/Government.............                24              -0.6               2.7               2.1
    Freestanding/Other..................                49               0.0               2.7               2.7
    Facility/HHA Based/Non-Profit.......               135              -0.2               2.7               2.5
    Facility/HHA Based/For-Profit.......                47              -0.7               2.7               2.0
    Facility/HHA Based/Government.......                62              -0.2               2.7               2.5
    Facility/HHA Based/Other............                46              -0.1               2.7               2.6
Facility Type and Control: Urban:
    Freestanding/Non-Profit.............               449              -0.1               2.7               2.6
    Freestanding/For-Profit.............             3,157               0.1               2.7               2.8
    Freestanding/Government.............                18               0.3               2.7               3.0
    Freestanding/Other..................               303              -0.1               2.7               2.6
    Facility/HHA Based/Non-Profit.......               212              -0.2               2.7               2.5
    Facility/HHA Based/For-Profit.......               153              -0.1               2.7               2.6
    Facility/HHA Based/Government.......                17              -0.1               2.7               2.6
    Facility/HHA Based/Other............                31              -0.3               2.7               2.4
Hospice Location: Urban or Rural:
    Rural...............................               846              -0.1               2.7               2.6
    Urban...............................             4,340               0.0               2.7               2.7
Hospice Location: Region of the Country
 (Census Division):
    New England.........................               149              -0.5               2.7               2.2
    Middle Atlantic.....................               282               0.0               2.7               2.7
    South Atlantic......................               588              -0.2               2.7               2.5
    East North Central..................               559              -0.4               2.7               2.3
    East South Central..................               256              -0.1               2.7               2.6
    West North Central..................               410              -0.5               2.7               2.2
    West South Central..................             1,015               0.3               2.7               3.0
    Mountain............................               538              -0.2               2.7               2.5
    Pacific.............................             1,340               0.7               2.7               3.4
    Outlying............................                49              -0.3               2.7               2.4
Hospice Size:
    0-3,499 RHC Days (Small)............             1,076               0.3               2.7               3.0
    3,500-19,999 RHC Days (Medium)......             2,457               0.2               2.7               2.9
    20,000+ RHC Days (Large)............             1,653               0.0               2.7               2.7
----------------------------------------------------------------------------------------------------------------
Source: FY 2021 hospice claims data from CCW accessed on January 21, 2022.
Note: The overall total impact reflects the addition of the individual impacts, which includes the overall wage
  index impact of updating the wage data with a 5-percent cap on wage index decreases, as well as the proposed
  2.7 percent hospice payment update percentage.
Region Key:
New England=Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont.
Middle Atlantic Pennsylvania, New Jersey, New York;
South Atlantic Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina,
  Virginia, West Virginia.
East North Central Illinois, Indiana, Michigan, Ohio, Wisconsin.
East South Central Alabama, Kentucky, Mississippi, Tennessee.
West North Central Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota.
West South Central Arkansas, Louisiana, Oklahoma, Texas.
Mountain=Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming Pacific= Alaska, California,
  Hawaii, Oregon, Washington.
Outlying=Guam, Puerto Rico, Virgin Islands.


[[Page 19462]]

2. Regulatory Review Cost Estimation
    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this proposed rule, we 
should estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assume that the total number of unique 
commenters on last year's proposed rule will be the number of reviewers 
of this proposed rule. We acknowledge that this assumption may 
understate or overstate the costs of reviewing this proposed rule. It 
is possible that not all commenters reviewed last 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 proposed rule. We welcome any comments on the 
approach in estimating the number of entities which will 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 are 
soliciting public comments on this assumption.
    Using the occupational wage information from the BLS for medical 
and health service managers (Code 11-9111) from May 2020; we estimate 
that the cost of reviewing this rule is $114.24 per hour, including 
overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm). This proposed rule consists of approximately 20,000 
words. Assuming an average reading speed of 250 words per minute, it 
would take approximately 0.67 hours for the staff to review half of it. 
For each hospice that reviews the rule, the estimated cost is $76.16 
(0.67 hours x $114.24). Therefore, we estimate that the total cost of 
reviewing this regulation is $4,036.48 ($76.16 x 53 reviewers).

D. Alternatives Considered

    Since the hospice payment update percentage is determined based on 
statutory requirements, we only considered not updating hospice payment 
rates by the payment update percentage. Payment rates since FY 2002 
have been updated according to section 1814(i)(1)(C)(ii)(VII) of the 
Act, which states that the update to the payment rates for subsequent 
years must be the market basket percentage for that FY. Section 3401(g) 
of the Affordable Care Act also mandates that, starting with FY 2013 
(and in subsequent years), the hospice payment update percentage will 
be annually reduced by changes in economy-wide productivity as 
specified in section 1886(b)(3)(B)(xi)(II) of the Act. For FY 2023, 
since the hospice payment update percentage is determined based on 
statutory requirements at section 1814(i)(1)(C) of the Act, we cannot 
consider not updating the hospice payment rates by the hospice payment 
update percentage, nor can we consider updating the hospice payment 
rates by the hospice payment update percentage.

E. Accounting Statement

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in Table 11, we have prepared an accounting statement showing 
the classification of the expenditures associated with the provisions 
of this proposed rule. Table 11 provides our best estimate of the 
possible changes in Medicare payments under the hospice benefit as a 
result of the policies in this proposed rule. This estimate is based on 
the data for 4,957 hospices in our impact analysis file, which was 
constructed using FY 2021 claims available in January 2022. All 
expenditures are classified as transfers to hospices.

  Table 11--Accounting Statement: Classification of Estimated Transfers
                   and Costs, From FY 2022 to FY 2023
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $ 580 million\*\.
From Whom to Whom?........................  Federal Government to
                                             Medicare Hospices.
------------------------------------------------------------------------
*The increase of $580 million in transfer payments is a result of the
  2.7 percent hospice payment update compared to payments in FY 2022.

F. Regulatory Flexibility Act (RFA)

    The RFA requires agencies to analyze options for regulatory relief 
of small businesses if a rule has a significant impact on a substantial 
number of small entities. The great majority of hospitals and most 
other health care providers and suppliers are small entities by meeting 
the Small Business Administration (SBA) definition of a small business 
(in the service sector, having revenues of less than $8.0 million to 
$41.5 million in any 1 year), or being nonprofit organizations.
    For purposes of the RFA, we consider all hospices as small entities 
as that term is used in the RFA. The Department of Health and Human 
Services 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 effect of the FY 2023 hospice payment update 
percentage results in an overall increase in estimated hospice payments 
of 2.7 percent, or $580 million. The distributional effects of the 
proposed FY 2023 hospice wage index do not result in a greater than 5 
percent of hospices experiencing decreases in payments of 3 percent or 
more of total revenue. Therefore, the Secretary has determined that 
this rule will not create a significant economic impact on a 
substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a MSA and has fewer 
than 100 beds. This rule will only affect hospices. Therefore, the 
Secretary has determined that this rule will not have a significant 
impact on the operations of a substantial number of small rural 
hospitals (see Table 10).

G. Unfunded Mandates Reform Act (UMRA)

    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 2022, that 
threshold is approximately $165 million. This rule is not anticipated 
to have an effect on state, local, or tribal governments, in the 
aggregate, or on the private sector of $165 million or more in any 1 
year.

H. Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a

[[Page 19463]]

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 
rule under these criteria of Executive Order 13132, and have determined 
that it will not impose substantial direct costs on state or local 
governments.

I. Conclusion

    We estimate that aggregate payments to hospices in FY 2023 will 
increase by $580 million as a result of the market basket update, 
compared to payments in FY 2022. We estimate that in FY 2023, hospices 
in urban areas will experience, on average, a 2.7 percent increase in 
estimated payments compared to FY 2022; while hospices in rural areas 
will experience, on average, a 2.6 percent increase in estimated 
payments compared to FY 2022. Hospices providing services in the 
Pacific and West South Central regions would experience the largest 
estimated increases in payments of 3.4 percent and 3.0 percent, 
respectively. Hospices serving patients in areas in the New England and 
West North Central regions would experience, on average, the lowest 
estimated increase of 2.2 percent in FY 2023 payments.
    Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & 
Medicaid Services, approved this document on March 29, 2022.

List of Subjects in 42 CFR Part 418

    Health facilities, Hospice care, Medicare, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR part 418 as set forth 
below.

PART 418--HOSPICE CARE

0
1. The authority citation for part 418 continues to read as follows:

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

0
2. Section Sec.  418.306 is amended by revising paragraph (c) to read 
as follows:


Sec.  418.306  Annual update of the payment rates and adjustment for 
area wage differences.

* * * * *
    (c) Adjustment for wage differences. (1) Each hospice's labor 
market is determined based on definitions of Metropolitan Statistical 
Areas (MSAs) issued by OMB. CMS will issue annually, in the Federal 
Register, a hospice wage index based on the most current available CMS 
hospital wage data, including changes to the definition of MSAs. The 
urban and rural area geographic classifications are defined in Sec.  
412.64(b)(1)(ii)(A) through (C) of this chapter. The payment rates 
established by CMS are adjusted by the Medicare contractor to reflect 
local differences in wages according to the revised wage data.
    (2) Beginning on October 1, 2022, CMS applies a cap on decreases to 
the hospice wage index such that the wage index applied to a geographic 
area is not less than 95 percent of the wage index applied to that 
geographic area in the prior fiscal year.
* * * * *

    Dated: March 29, 2022.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2022-07030 Filed 3-30-22; 4:15 pm]
BILLING CODE 4120-01-P


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