• Focus on Wage Index Cap, Payment Update, and Health Equity

On Wednesday, March 30, 2022, the Centers for Medicare & Medicaid Services (CMS) issued Medicare Program; FY 2023 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements (https://www.federalregister.gov/public-inspection/2022-07030/medicare-program-fy-2023-hospice-wage-index-and-payment-rate-update-and-hospice-quality-reporting), the proposed rule governing hospice payment and other policies for fiscal year (FY) 2023.  The rule included:

• A proposed 2.7% payment update for hospice services for the coming year;
• Proposed imposition of a permanent 5% cap on reductions in wage index values from one year to the next (a policy CMS is proposing for all Medicare institutional providers);
• A request for input on specific steps hospices are taking to advance health equity and views on creation of a structural composite measure that would assess a provider’s activities to address access to and quality of care for underserved populations;
• Updates on elements of the Hospice Quality Reporting Program (HQRP); and a
• An update on Advancing Health Information Exchange.

A NAHC Report summary of the rule is available here.

Since publication of the rule, the National Association for Home Care & Hospice (NAHC) solicited input from hospice members through numerous “listening sessions.”  Following is a summary of NAHC’s comments on the rule that were submitted to CMS:

Proposed Permanent 5% Cap on Wage Index Decreases:  Across the years when wage index values in a large number of geographic areas have undergone changes that could have a significant negative impact on provider payments, CMS has utilized various methods to limit the impact of those changes in the first year so that providers could prepare for the financial impact of the wage index changes.  These methods include applying a 50/50 blend of the existing wage index value and the prospective wage index value for the first year or (as used during 2021) applying a 5% cap on wage index decreases for the first year in which changes to the wage index values are being applied. Given the potential that wage index changes have to create instability and significant negative impacts on certain providers even when wage index values change in only a small number of geographic areas, as part of the proposed FY2023 hospice payment rule CMS proposed a permanent approach to smooth year-to-year changes in providers’ wage indexes by placing a 5% cap on all wage index decreases in future years, regardless of the reason for the decrease.   Under this change, a geographic area’s wage index would not be less than 95% of its wage index calculated in the prior FY. NAHC has had a long-standing policy position that CMS should develop and implement a wage index model that is consistent across all provider types so that all providers have a level playing field from which to compete for personnel, and that supports limiting wage index losses from year to year to minimize dramatic payment reductions due to wage index value changes.

NAHC’s comments support action by CMS to impose a permanent cap on losses due to wage index value declines but suggest that in addition to a 5% cap that CMS analyze the impact of imposing a smaller cap (such as 2% or 3%), provide the public with details of their findings, and impose the most appropriate cap value as part of final action.  Based on their findings, CMS should determine and implement the most appropriate value for the cap on wage index decreases. NAHC also expressed concern that while CMS extended a FY2021 transitional policy imposing a 5% cap on wage index reductions to FY2022 for hospital providers but did not extend that policy to other provider types. NAHC is recommending that CMS retroactively apply the FY2021 transitional policy to hospice and other providers whose wage index values dropped more than 5% between 2021 and 2022.

Proposed FY2023 Hospice Payment Update Percentage 

While CMS has limited discretion when calculating the annual market basket update for hospice providers, NAHC has concerns that the projected 2.7% update is insufficient to address the accelerating financial demands that hospices have faced over the course of the last three years. NAHC’s comments include a wide variety of issues that have resulted in financial strains for hospice providers, including:

• The Continuing COVID-19 Public Health Emergency
• Inflationary Pressures
• Workforce Issues
  • Caregiver Burnout
  • Increased Costs Related to Management Fees, Outsourcing, Recruitment, and Retention
  • Reduced Productivity/Lost Revenue Related to Staff Turnover
• Resumption of the 2% Sequester
• Resumption of/Increased Regulatory Oversight

Based on these concerns, NAHC’s comments urge CMS to explore all options available to address the financial strains that providers are undergoing, including the following:

• Examine trends relative to IHS Global’s forecasts to determine whether more recently available data than used for the final FY2023 rule would result in a higher market basket update and determine whether additional updates could be made during the course of FY2023 to provide additional support to hospice and other providers.
• Direct various divisions of CMS to examine potential options for hospice regulatory relief, with a particular focus on policies that could help to address issues that contribute to the existing workforce crisis, including reductions in paperwork and more appropriate utilization of various clinical personnel.
• Engage stakeholders in discussions regarding current waivers and flexibilities related to the COVID-19 PHE, providers’ experience during the PHE relative to these waivers and flexibilities, and policy changes that might be advisable as a result of those experiences.

Updates on elements of the HQRP

While there were no proposed changes to the HQRP NAHC did submit some comments relative to elements of the program. The HOPE (Hospice Outcome and Patient Evaluation) tool is currently in beta testing which is expected to be completed later this year after which time CMS will complete its analysis. It is possible that CMS will include in next year’s proposed hospice rule the full implementation of the HOPE. Hospices and stakeholders such as EMR vendors are requesting CMS share more information about the HOPE prior to any future proposal for full implementation. NAHC also encouraged CMS to include race and ethnicity and SDOH in the HOPE and consider how the HOPE could be utilized as a tool to help hospices with health equity initiatives.

NAHC reiterated recommendations submitted previously urging CMS to develop codes or modifiers for telehealth visits in hospice and supports the recommendation by MedPAC that technology-based visits be reported on claims.

Advancing Health Equity

In this year’s proposed rule, CMS expanded on last year’s Request for Information (RFI) on health equity. This year, CMS sought feedback on four questions and a structural composite measure related to health equity. NAHC supports embedding the principles of health equity in the design, implementation, and operationalizing of policies and programs to improve health and reduce disparities for all people served by the Medicare program. In general, hospice readiness to develop and implement health equity initiatives varies greatly. Some hospices report that health equity concepts are new to their organization while others report collecting and analyzing data related to health equity for some time and using it as part of their performance improvement program. Consistent feedback from members indicates that there are hospices operating all along this spectrum and it is important for CMS to consider this variation as it looks to implement requirements and measures related to health equity. NAHC did explain in its comments that hospices are eager to implement health equity initiatives but have been impacted by the workforce shortage and other effects of the COVID-19 pandemic requiring a refocusing of priorities. Therefore, additional time and resources are necessary.

Social determinants of health (SDOH) and other data such as race and ethnicity need to be collected and analyzed for the advancement of health equity initiatives. However, our systems lack standardization for the collection, reporting and analysis of this data. NAHC encouraged CMS to expand its systems to allow for the submission of such data and for CMS to develop and share meaningful reports with this information for hospices that will help them move forward or expand.

NAHC’s comments support introducing a structural composite measure on health equity into the hospice quality reporting program. We believe such a measure is a good starting point for the HQRP and will help hospices learn what is expected and best practices. Dialogue with stakeholders about the development of a structural composite measure is necessary to ensure all components are included and the reporting of such a measure is meaningful while not being overly burdensome to hospice providers. We believe hospices must learn how to incorporate much of the health equity framework into their daily practice before data collection for a structural composite measure is considered. We provided feedback on each of the three domains CMS included as possible components of a structural measure and scoring of the domains. NAHC strongly recommended the utilization of a Technical Expert Panel (TEP) to consider the identification of appropriate measures and their implementation as was done with hospitals in the development of the “Hospital Commitment to Health Equity” measure. We also recommended that as the hospice measure is developed, data be gathered from hospices with feedback and learning opportunities provided to them before any public reporting is considered. NAHC emphasized that CMS should allow for adoption of health equity initiatives with hospices in a manner like that utilized with hospitals – slowly and over the course of years.

Finally, NAHC thanked CMS for its plans to utilize a TEP for the development and implementation of the Special Focus Program (SFP) that is part of the hospice survey reforms finalized last year. NAHC recommended that nomination opportunities to serve on the TEP be open to the public and that the proceedings of the TEP be as transparent as possible and include multidisciplinary and patient/caregiver perspective and that the TEP be charged with advising CMS on the details of implementation of the SFP, including the terms of selection, enforcement, and technical assistance criteria. Due to the complexity of the SFP and potential long-term impacts, this program should not be implemented until the TEP has completed its work in this area and has had the opportunity to consider SFP eligibility, use of other data for SFP eligibility, and SFP graduation.

Advancing Health Information Exchange

NAHC also took the opportunity to respond to the section of the rule highlighting the importance of interoperable health information exchange (HIE) across provider types and settings. NAHC staff reminded CMS that a major reason the majority of hospice and home health providers lack certified EHR technology is as a result of not being eligible for funding from the federal Meaningful Use EHR Incentive program created in 2009, a federal initiative that has provided billions of dollars over the last decade to hospitals, health systems, and physician practices to adopt and maintain Office of the National Coordinator for Health Information Technology (ONC)-certified health information technology (HIT). Not including hospices or other post-acute care (PAC) providers in that program has created an uneven playing field, one in which home-based care providers are further behind in their capacity to procure ONC-certified products which facilitate the kind of seamless interoperability CMS is seeking across the health care system. Special mention was made of how important it is for CMS to work with ONC and Congress to develop an analogous EHR/HIT incentive program for hospice and the PAC sector, particularly if they intend to make progress on their overarching goal to improve social determinant of health (SDOH) data collection and exchange. In order for SDOH information to be valuable, it will need to follow patients across care settings, making interoperability critically important. But merely providing the money to develop the data-sharing tools will not be sufficient to deliver on the health equity promise of more robust SDOH activity – CMS must also begin to articulate the specific expectations it has for providers related to the collection, storing, sharing, and use of SDOH data. In the absence of guidance, many providers are likely to create their own approaches to this work, which will hamper the ability to develop meaningful standards in the future that will help formalize CMS and ONC’s regulatory stance towards health care providers’ SDOH obligations and responsibilities.