CMS Issues Proposed Rules Set to Affect Hospices, SNFs

Rules for Hospice and Skilled Nursing Facilities

Both rules would do more than merely impact payment.

Federal officials this week unveiled a pair of proposed rules that are likely to have significant ramifications for hospice and skilled nursing facility (SNF) providers nationwide.

Centers for Medicare & Medicaid Services (CMS) rules 1754-P and 1756-P were issued on Thursday, along with lengthy fact sheets for each. Comments from providers are currently being accepted.

To summarize, the proposals would provide updates to policies and rates for hospices and SNFs for the 2022 fiscal year (FY). The hospice rule additionally proposes to “rebase the hospice labor shares and clarify certain aspects of the hospice election statement addendum requirements,” according to the CMS fact sheets, while the SNF rule includes proposals for the SNF Quality Reporting Program (QRP) and the SNF Value-Based Program (VBP).

Hospice Proposed Rule

In addition to simply updating policies and rates, the hospice rule proposes more fundamental changes to the Hospice Conditions of Participation (CoPs) and Hospice Quality Reporting Program (HQRP), officials said. The rule also includes a Home Health Quality Reporting Program (HHQRP) proposal to display publicly certain outcome and assessment information set (OASIS) data following lapses occurring due to exemptions spurred by the COVID-19 public health emergency (PHE) during the first half of 2020.

“CMS is committed to addressing consistent and persistent inequities in health outcomes by improving data collection to measure and analyze disparities across programs and policies that apply to the HQRP,” CMS said. “We will obtain this feedback through this request for information (RFI) on ways to achieve health equity for all patients through policy solutions that apply to the HQRP and our other quality reporting programs.”

CMS is also proposing to rebase and revise labor shares for all four levels of care using 2018 Medicare cost reports (MCR) data for freestanding hospice facilities. This rule also proposes several clarifying regulation text changes on certain aspects of the hospice election statement addendum requirements that were finalized for hospice elections beginning in October 2020.

Hospices would see an estimated 2.3 percent ($530 million) increase in their payments under the provisions of the proposed rule, based on the estimated 2.5 percent inpatient hospital market basket reduced by the multifactor productivity adjustment (0.2 percentage point). The hospice payment update also includes a statutory aggregate cap that limits overall payments per patient made to a hospice annually.

The CoPs alterations proposed in the rule pertain to hospice aide competency evaluation standards, which were relaxed as part of the federal pandemic response.

“We issued this waiver to promote greater flexibility and reduce burden, allowing hospices to focus on delivering improved patient care during the COVID-19 PHE,” CMS said. “The agency believes that this PHE waiver should be made permanent, and is proposing the use of the ‘pseudo-patient’ for hospice aide competency training.”

A notable change proposed for the HQRP is titled the “Hospice Care Index,” consisting of a single measure encompassing 10 indicators of quality, calculated from claims data.

“Collectively, the indicators represent different aspects of hospice care, and aim to convey a comprehensive characterization of the quality of care furnished by a hospice,” officials said.

If finalized, the measure would be publicly reported no earlier than May 2022. In a related move, CMS is also proposing to add Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Hospice Survey Star ratings on Care Compare, allowing consumers to weigh provider decisions in a more straightforward manner.

SNF Proposed Rule

CMS estimates that the payment policies in the SNF proposed rule would result in an increase of approximately $444 million in payments to such providers in FY 2022. But that sum is dwarfed by what officials described as an “unintended” increase resulting from a policy implemented in 2019.

“On Oct. 1, 2019, CMS implemented a new case-mix classification model, called the Patient-Driven Payment Model (PDPM). When finalizing PDPM, CMS stated that this new payment model would be implemented in a budget-neutral manner, meaning that the transition to this new payment model would not result in an increase or decrease in aggregate SNF spending,” CMS explained. “Since PDPM implementation, currently available data suggest an unintended increase in payments of approximately 5 percent, or $1.7 billion, in FY 2020. As with past payment model transitions, CMS has conducted the data analysis to recalibrate the parity adjustment used to achieve budget neutrality under PDPM.”

Still, federal officials acknowledged that the COVID PHE could have affected the data used to perform the relevant analyses. Accordingly, in the proposed rule, CMS noted that it is “soliciting broad public comments on a potential methodology for recalibrating the PDPM parity adjustment that would account for the potential effects of the COVID-19 PHE without compromising the accuracy of the adjustment.”

CMS also seeks comment on whether any necessary adjustment should be delayed or phased in over time to provide payment stability.

It wasn’t the only citation of the PDPM in the new proposed rule. In response to “stakeholder feedback, and to improve consistency between the ICD-10 code mappings and current ICD-10 coding guidelines,” CMS also proposed changes to the mappings, affecting the areas of sickle-cell disease, esophageal conditions, multisystem inflammatory syndrome, neonatal cerebral infarction, vaping-related disorder, and anoxic brain damage.

As for the SNF QRP, officials said they are proposing the adoption of a new claims-based measure, SNF HAI (Healthcare-Associated Infections). The measure would use claims data to estimate the rate of HAIs acquired during SNF care and resulting in hospitalization, with some of the conditions identified in the measure to include sepsis, urinary tract infection, and pneumonia.

“The goal of the measure is to be able to assess those SNFs that have notably higher rates of HAIs that are acquired during SNF care and result in hospitalization, when compared to their peers and to the national average HAI rate,” CMS said. “Implementation of the SNF HAI measure provides information about a facility’s adeptness in infection prevention and management and encourages improved quality of care.”

Regarding the SNF VBP, officials said they are proposing to suppress the SNF 30-Day All-Cause Readmission Measure for 2022, because “circumstances caused by the COVID-19 PHE have affected the measure and the resulting performance scores significantly.”

“Specifically, to address the possible distortion of performance scores and incentive payment multipliers, CMS is proposing to assign a performance score of zero to all participating SNFs, irrespective of how they perform using the previously finalized scoring methodology,” CMS noted. “Then, to maintain compliance with the existing payback percentage policy (per statute, the SNF VBP Program must withhold 2 percent of SNF Medicare Part A FFS payment and redistribute 50-70 percent of the withhold to SNFs in the form of incentive payments), CMS is proposing to reduce the otherwise applicable federal per diem rate for each SNF by 2 percent and award SNFs 60 percent of that withhold, resulting in a 1.2 percent payback percentage to those SNFs, except for SNFs that are subject to the Low Volume Adjustment policy.”

CMS also noted that the newly passed Consolidated Appropriations Act of 2021 included a provision allowing the Secretary of Health and Human Services to expand the SNF VBP program and apply up to 10 measures with respect to payments, beginning in FY 2024, which “may include measures of functional status, patient safety, care coordination, or patient experience.”

“In expanding the SNF VBP measure set, CMS is also considering measures that we already require for Long-Term Care Facilities (LTCFs), which include both SNFs and nursing facilities (NFs), to collect and report under other initiatives such as Nursing Home Compare,” CMS said. “Approximately 94 percent of LTCFs are dually certified as both a SNF and NF, and the vast majority of LTCF residents are also Medicare beneficiaries. The expanded SNF VBP measure set would assess the quality of care that LTCFs provide to all LTCF residents, regardless of payor, as it would best represent the quality of care provided to all Medicare beneficiaries in the facility.”

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