Proposed Rule: Medicare: Hospice Wage Index For Fiscal Year 2008

Tuesday,
May 1, 2007
Part VII
Department of
Health and Human
Services
Centers for Medicare & Medicaid Services
42 CFR Part 418

Medicare Program; Hospice Wage Index
for Fiscal Year 2008; Proposed Rule
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24116 Federal Register / Vol. 72, No. 83 / Tuesday, May 1, 2007 / Proposed Rules
DEPARTMENT OF HEALTH AND 4. By hand or courier. If you prefer, through Friday of each week from 8:30
HUMAN SERVICES you may deliver (by hand or courier) a.m. to 4 p.m. To schedule an
your written comments (one original appointment to view public comments,
Centers for Medicare & Medicaid and two copies) before the close of the phone 1–800–743–3951.
Services comment period to one of the following
I. Background
addresses. If you intend to deliver your
42 CFR Part 418 comments to the Baltimore address, A. General
please call telephone number (410) 786– 1. Hospice Care
[CMS–1539–P]
9994 in advance to schedule your
arrival with one of our staff members. Hospice care is an approach to
RIN 0938–AO72
Room 445-G, Hubert H. Humphrey treatment that recognizes that the
Medicare Program; Hospice Wage Building, 200 Independence Avenue, impending death of an individual
Index for Fiscal Year 2008 SW., Washington, DC 20201; or 7500 warrants a change in the focus from
Security Boulevard, Baltimore, MD curative care to palliative care for relief
AGENCY: Centers for Medicare & 21244–1850. of pain and for symptom management.
Medicaid Services (CMS), HHS. (Because access to the interior of the The goal of hospice care is to help
ACTION: Proposed rule. HHH Building is not readily available to terminally ill individuals continue life
persons without Federal Government with minimal disruption to normal
SUMMARY: This proposed rule would set identification, commenters are activities while remaining primarily in
forth the hospice wage index for fiscal encouraged to leave their comments in the home environment. A hospice uses
year 2008. This proposed rule would the CMS drop slots located in the main an interdisciplinary approach to deliver
also revise the methodology for lobby of the building. A stamp-in clock medical, social, psychological,
updating the wage index for rural areas is available for persons wishing to retain emotional, and spiritual services
without hospital wage data and provide a proof of filing by stamping in and through use of a broad spectrum of
clarification of selected existing retaining an extra copy of the comments professional and other caregivers, with
Medicare hospice regulations and being filed.) the goal of making the individual as
policies. Comments mailed to the addresses physically and emotionally comfortable
DATES: To be assured consideration, indicated as appropriate for hand or as possible. Counseling services and
comments must be received at one of courier delivery may be delayed and inpatient respite services are available
the addresses provided below, no later received after the comment period. to the family of the hospice patient.
than 5 p.m. on July 2, 2007. For information on viewing public Hospice programs consider both the
comments, see the beginning of the patient and the family as a unit of care.
ADDRESSES: In commenting, please refer
SUPPLEMENTARY INFORMATION section. Section 1861(dd) of the Social
to file code CMS–1539–P. Because of Security Act (the Act) provides for
staff and resource limitations, we cannot FOR FURTHER INFORMATION CONTACT:
coverage of hospice care for terminally
accept comments by facsimile (FAX) Terri Deutsch, (410) 786–9462.
ill Medicare beneficiaries who elect to
transmission. SUPPLEMENTARY INFORMATION: receive care from a participating
You may submit comments in one of Submitting Comments: We welcome hospice. Section 1814(i) of the Act
four ways (no duplicates, please): comments from the public on all issues provides payment for Medicare
1. Electronically. You may submit set forth in this rule to assist us in fully participating hospices.
electronic comments on specific issues considering issues and developing
in this regulation to http:// policies. You can assist us by 2. Medicare Payment for Hospice Care
www.cms.hhs.gov/eRulemaking. Click referencing the file code CMS–1539–P Our regulations at 42 CFR part 418
on the link ‘‘Submit electronic and the specific ‘‘issue identifier’’ that establish eligibility requirements,
comments on CMS regulations with an precedes the section on which you payment standards and procedures,
open comment period.’’ (Attachments choose to comment. define covered services, and delineate
should be in Microsoft Word, Inspection of Public Comments: All the conditions a hospice must meet to
WordPerfect, or Excel; however, we comments received before the close of be approved for participation in the
prefer Microsoft Word.) the comment period are available for Medicare program. Part 418 subpart G
2. By regular mail. You may mail viewing by the public, including any provides for payment in one of four
written comments (one original and two personally identifiable or confidential prospectively-determined rate categories
copies) to the following address ONLY: business information that is included in (routine home care, continuous home
Centers for Medicare & Medicaid a comment. We post all comments care, inpatient respite care, and general
Services, Department of Health and received before the close of the inpatient care) to hospices based on
Human Services, Attention: CMS–1539– comment period on the following Web each day a qualified Medicare
P, P.O. Box 8012, Baltimore, MD 21244– site as soon as possible after they have beneficiary is under a hospice election.
1850. been received: http://www.cms.hhs.gov/
Please allow sufficient time for mailed eRulemaking. Click on the link B. Hospice Wage Index
comments to be received before the ‘‘Electronic Comments on CMS Our regulations at § 418.306(c) require
close of the comment period. Regulations’’ on that Web site to view each hospice’s labor market to be
3. By express or overnight mail. You public comments. established using the most current
may send written comments (one Comments received timely will also hospital wage data available, including
original and two copies) to the following be available for public inspection as any changes to the Metropolitan
address ONLY: Centers for Medicare & they are received, generally beginning Statistical Areas (MSAs) definitions,
Medicaid Services, Department of approximately 3 weeks after publication which have been superseded by Core
Health and Human Services, Attention: of a document, at the headquarters of Based Statistical Areas (CBSAs). Section
CMS–1539–P, Mail Stop C4–26–05, the Centers for Medicare & Medicaid 1814(i)(2)(D) of the Act requires
7500 Security Boulevard, Baltimore, MD Services, 7500 Security Boulevard, Medicare to pay for hospice care
21244–1850. Baltimore, Maryland 21244, Monday furnished in an individual’s home on
Federal Register / Vol. 72, No. 83 / Tuesday, May 1, 2007 / Proposed Rules 24117
the basis of the geographic location the OMB Bulletin No. 03–04 (June 6, Raw wage index value below 0.8
where the service is furnished. We have 2003), which announced revised multiplied by the budget neutrality
interpreted this to mean that the wage definitions for Micropolitan Statistical adjustment factor: (0.4000 × 1.060988 =
index value used is based upon the Areas and the creation of MSAs and 0.4244).
location of the beneficiary’s home for Combined Statistical Areas. In adopting Raw wage index value below 0.8
routine home care and continuous home the OMB Core-Based Statistical Area multiplied by the hospice wage index
care and the location of the hospice (CBSA) geographic designations, we floor: (0.4000 × 1.15 = 0.4600).
agency for general inpatient and respite provided for a 1-year transition with a Based on these calculations, County
care. blended wage index for all providers for A’s hospice wage index would be
The hospice wage index is used to FY 2006. For FY 2006, the hospice wage 0.4600.
adjust payment rates for hospice index for each provider consisted of a 3. Hospice Payment Rates
agencies under the Medicare program to blend of 50 percent of the FY 2006
reflect local differences in area wage MSA-based wage index and 50 percent Section 4441(a) of the Balanced
levels. The original hospice wage index of the FY 2006 CBSA-based wage index. Budget Act of 1997 (BBA) amended
was based on the 1981 Bureau of Labor As discussed in the August 4, 2005 final section 1814(i)(1)(C)(ii) of the Act to
Statistics hospital data and had not been rule and in the September 1, 2006 establish updates to hospice rates for
updated since 1983. In 1994, because of notice, we will use the full CBSA-based FYs 1998 through 2002. Hospice rates
disparity in wages from one wage index values as presented in were to be updated by a factor equal to
geographical location to another, a Tables A and B of this proposed rule for the market basket index, minus 1
committee was formulated to negotiate FY 2008. percentage point. However, neither the
a wage index methodology that could be BBA nor subsequent legislation
accepted by the industry and the 2. Raw Wage Index Values specified the market basket adjustment
government. This committee, Raw wage index values (that is, to be used to compute payment for FY
functioning under a process established inpatient hospital pre-floor and pre- 2008. Therefore, payment rates for FY
by the Negotiated Rulemaking Act of reclassified wage index values) as 2008 will be updated according to
1990, was comprised of national described in the August 8, 1997 hospice section 1814(i)(1)(C)(ii)(VII) of the Act,
hospice associations; rural, urban, large wage index final rule (62 FR 42860), are which states that the update to the
and small hospices; multi-site hospices; subject to either a budget neutrality payment rates for subsequent FYs will
consumer groups; and a government adjustment or application of the wage be the market basket percentage for the
representative. On April 13, 1995, the index floor. Raw wage index values of fiscal year. Accordingly, the FY 2008
Hospice Wage Index Negotiated 0.8 or greater are adjusted by the budget update to the payment rates will be the
Rulemaking Committee signed an neutrality adjustment factor. Budget full market basket percentage increase
agreement for the methodology to be neutrality means that, in a given year, for FY 2008. This rate update is
used for updating the hospice wage estimated aggregate payments for implemented through a separate
index. Medicare hospice services using the administrative instruction and is not
In the August 8, 1997 Federal updated wage index values will equal part of this notice. Historically, the rate
Register (62 FR 42860), we published a estimated payments that would have update has been published through a
final rule implementing a new been made for these services if the 1983 separate administrative instruction
methodology for calculating the hospice wage index values had remained in issued annually in July to provide
wage index based on the effect. To achieve this budget neutrality, adequate time to implement system
recommendations of the negotiated the raw wage index is multiplied by a change requirements. Providers
rulemaking committee. The committee budget neutrality adjustment factor. The determine their payment rates by
statement was included in the appendix budget neutrality adjustment factor is applying the wage index in this notice
of that final rule (62 FR 42883). The calculated by comparing what we would to the labor portion of the published
hospice wage index is updated have paid using current rates and the hospice rates.
annually. Our most recent annual 1983 wage index to what would be paid
4. Proxy for the Hospital Market Basket
update notice published in the using current rates and the new wage
September 1, 2006 Federal Register (71 index. The budget neutrality adjustment As discussed above, the hospice
FR 52080), set forth updates to the factor is computed and applied payment rates are adjusted each year
hospice wage index for FY 2007. On annually. For the FY 2008 hospice wage based upon the full hospital market
October 3, 2006, we published a index in the proposed rule, FY 2007 basket. In the FY 2007 update notice (72
correction notice in the Federal Register hospice payment rates were used in the FR 52082) issued on September 1, 2006,
(71 FR 58415) and we published a budget neutrality adjustment factor we indicated that beginning in April
subsequent correction notice on January calculation. 2006, with the publication of March
26, 2007 (72 FR 3856), to correct Raw wage index values below 0.8 are 2006 data, the Bureau of Labor
technical errors that appeared in the adjusted by the greater of: (1) The Statistic’s (BLS’s) Employment Cost
September 1, 2006 notice. hospice budget neutrality adjustment Index (ECI) began using a different
factor; or (2) the hospice wage index classification system, the North
1. Changes to Core-Based Statistical floor (a 15 percent increase) subject to American Industrial Classification
Areas a maximum wage index value of 0.8. For System (NAICS), instead of the Standard
The annual update to the hospice example, if County A has a pre-floor, Industrial Classification System (SIC),
wage index is published in the Federal pre-reclassified hospital wage index which no longer exists. The ECIs had
Register and is based on the most (raw wage index value) of 0.4000, we been used as the data source for wages
current available hospital wage data, as would perform the following and salaries and other price proxies in
well as any changes by the Office of calculations using the budget neutrality the hospital market basket. In the FY
Management and Budget (OMB) to the factor (which for this example is 2007 update notice we noted that no
definitions of MSAs. The August 4, 1.060988) and the hospice wage index changes would be made to the usage of
2005 final rule (70 FR 45130) set forth floor to determine County A’s hospice the NAICS-based ECI, however, input
the adoption of the changes discussed in wage index: was solicited on this issue. We received
no comments and as a result, we are not caption ‘‘Rural Areas without Wage Since we have used the same wage
proposing any changes. Data’’ at the beginning of your index value from FY 2005 for these
comments.) areas for the previous two fiscal years,
II. Provisions of the Proposed Rule
When adopting OMB’s new labor we believe it is appropriate to consider
A. Annual Update to the Hospice Wage market designations, we identified some alternatives in our methodology to
Index geographic areas where there were no update the wage index for rural areas
The hospice wage index presented in hospitals, and thus, no hospital wage without hospital wage index data. We
index data on which to base the believe that the best imputed proxy for
this proposed rule would be effective
calculation of the hospice wage index rural areas, would: (1) Use pre-floor,
October 1, 2007 through September 30,
(70 FR 45135, August 4, 2005). For FY pre-reclassified hospital data; (2) use the
2008. We note that we are not proposing
2006 and FY 2007, we adopted a policy most local data available to impute a
any modifications to the hospice wage
to use the FY 2005 pre-floor, pre- rural wage index; (3) be easy to evaluate;
index methodology. In accordance with
reclassified hospital wage index value and, (4) be easy to update from year-to-
our regulations and the agreement
for rural areas when no rural hospital year. Although our current methodology
signed with other members of the
wage data were available. We also uses local, rural pre-floor, pre-
Hospice Wage Index Negotiated
adopted the policy that for urban labor reclassified hospital wage data, this
Rulemaking Committee, we are using
markets without an urban hospital from method cannot be updated from year-to-
the most current hospital data available year.
to us. For this proposed rule, the FY which a hospital wage index data could
be derived, all of the CBSAs within the Therefore, in cases where there is a
2007 hospital wage index was the most rural area without rural hospital wage
current hospital wage data available for State would be used to calculate a
statewide urban average wage index data, we propose using the average pre-
calculating the FY 2008 hospice wage floor, pre-reclassified wage index data
index values. We used the FY 2007 pre- data to use as a reasonable proxy for
these areas. We did not receive any from all contiguous CBSAs to represent
reclassified and pre-floor hospital area a reasonable proxy for the rural area.
wage index data for this calculation. public comments regarding our policy
to calculate an urban wage index, using While this approach does not use rural
Payment rates for each of the four data, it does use pre-floor, pre-
levels of care are adjusted annually an average of all of the urban CBSA
wage index data within the State, for reclassified hospital wage data, it is easy
based upon the hospital market basket to evaluate, it is easy to update from
for that year and are promulgated urban labor markets without an urban
year-to-year, and it uses the most local
administratively to allow for sufficient hospital from which a hospital wage
data available.
time for system changes and provider index could be derived. Consequently,
In determining an imputed rural wage
notification. Due to the need to ensure in the August 2005 final rule and in the index, we interpret the term contiguous
appropriate time for implementing August 2006 update notice, we applied to mean as sharing a border. For
changes, the latest adjustments to these the average wage index data from all example, in the case of Massachusetts,
payment rates were not incorporated urban areas lacking hospital wage data the entire rural area consists of Dukes
into this proposed rule. in that state. Currently, the only CBSA and Nantucket counties. We have
As noted above, for FY 2008, the that is affected by this is CBSA 25980 determined that the borders of Dukes
hospice wage index values will be based Hinesville-Fort Stewart, Georgia. We and Nantucket counties are contiguous
solely on the adoption of the CBSA- propose to continue this approach for with Barnstable and Bristol counties.
based labor market definitions and its urban areas where there are no hospitals Under the proposed methodology, the
wage index. We continue to use the and, thus, no hospital wage index data pre-floor, pre-reclassified wage index
most recent pre-floor and pre- on which to base the calculations for the values for the counties of Barnstable
reclassified hospital wage index data FY 2008 and subsequent hospice wage (CBSA 12700, Barnstable Town, MA) of
available (FY 2003 hospital wage data). indexes. Therefore, the pre-floor, pre- 1.2539 and Bristol (CBSA 39300,
A detailed description of the reclassified wage index data for urban Providence-New Bedford-Fall River, RI-
methodology used to compute the CBSA 25980, Hinesville-Fort Stewart, MA) of 1.0783 would be averaged
hospice wage index is contained in both GA is calculated as the average wage resulting in an imputed pre-floor, pre-
the September 4, 1996 proposed rule (61 index data of all urban areas in Georgia reclassified rural wage index of 1.1661
FR 46579) and the August 8, 1997 final with a value of 0.9178. for rural Massachusetts for FY 2008. The
rule (62 FR 42860). All wage index Under the CBSA labor market areas, impact of utilizing the proposed
values are adjusted by a budget- there are no rural hospitals in rural methodology is captured in the impact
neutrality factor of 1.066028 and are locations in Massachusetts and Puerto analysis (Table 1). As shown in Table B,
subject to the wage index floor Rico. Since there was no rural proxy for the proposed wage index value for FY
adjustment, if applicable. We completed more recent rural data within those 2008 for rural Massachusetts is 1.2431.
all of the calculations described in areas, in the August 2005 proposed rule If we had retained the current
section 2.B below and included them in (70 FR 45135), we proposed applying methodology, the rural Massachusetts
the wage index values reflected in the FY 2005 pre-floor, pre-reclassified wage index would have been 1.0891.
Tables A and B of the Addendum. hospital wage index value to rural areas While we believe that this policy
Specifically, Table A reflects the FY where no hospital wage data are could be readily applied to other rural
2008 wage index values for urban areas available. We did not receive any public areas that lack hospital wage data
under the CBSA designations. Table B comments on this matter, either. (possibly due to hospitals converting to
reflects the FY 2008 wage index values Consequently, in the August 2005 final a different provider type, such as a
for rural areas under the CBSA rule and in the August 2006 update CAH, that do not submit the appropriate
designations. notice, we applied the FY 2005 pre- wage data), should a similar situation
floor, pre-reclassified hospital wage arise in the future, we may re-examine
B. Rural Areas Without Hospital Wage index data for rural areas lacking this policy.
Data hospital wage data in that state in both However, we do not believe that this
(If you choose to comment on issues FY 2006 and FY 2007 for rural policy would be appropriate for Puerto
in this section, please include the Massachusetts and rural Puerto Rico. Rico. There are sufficient economic
differences between hospitals in the or after October 1, 1997, required the impact of implementing this proposal
United States and those in Puerto Rico, application of the local wage index will be negligible.
including the payment of hospitals in value of the geographic location at
E. Clarification of Selected Existing
Puerto Rico using blended Federal/ which the service is furnished for
Medicare Hospice Regulations and
Commonwealth-specific rates that we hospice care provided in the home. This
Policies
believe that a separate and distinct provision has been codified in our
policy for Puerto Rico is necessary. regulations at 418.302(g). Prior to this 1. Educational Requirements for Nurse
Consequently, any alternative provision, local wage index values were Practitioners
methodology for imputing a wage index applied based on the geographic (If you choose to comment on issues
for rural Puerto Rico would need to take location of the hospice provider, in this section, please include the
into account those differences. Our regardless of where the hospice care was caption ‘‘Nurse Practitioners’’ at the
policy of imputing a rural wage index furnished. We believe that for the beginning of your comments.)
based on the wage index(es) of CBSAs majority of hospice providers the office On December 8, 2003, the Congress
contiguous to the rural area in question and the site for the provision of home enacted the Medicare Prescription Drug,
does not recognize the unique and inpatient care occur in the same Improvement, and Modernization Act
circumstances of Puerto Rico. While we geographic area. However, with the (MMA) of 2003 (Pub. L. 108–173).
have not yet identified an alternative substantial growth of hospice providers Section 408 of the MMA, Recognition of
methodology for imputing a wage index in multiple states and with multiple Attending Nurse Practitioners as
for rural Puerto Rico, we will continue sites within a State, hospice providers Attending Physicians to Serve Hospice
to evaluate the feasibility of using have been able to inappropriately
existing hospital wage data and, Patients, amended sections
maximize reimbursement by locating 1861(dd)(3)(B) and 1814(a)(7) of the Act
possibly, wage data from other sources. their offices in high-wage areas and
Accordingly, we propose to continue to add nurse practitioners (NPs) to the
delivering services in a lower-wage area. definition of an attending physician for
using the most recent pre-floor, pre- We also believe that hospice providers
reclassified wage index previously beneficiaries who have elected the
are also able to inappropriately hospice benefit. Section 408 of the
available for Puerto Rico, which is maximize reimbursement by locating
0.4047. MMA was implemented through an
their inpatient services either directly or administrative issuance (Change
C. Nomenclature Changes under contractual arrangements in Request (CR) 3226, Transmittals 22 and
lower wage areas than their offices. 304, September 24, 2004).
(If you choose to comment on issues
Section 4442 of the BBA applies the In the FY 2006 Final Rule (70 FR
in this section, please include the
wage index value of a home’s 45130, August 4, 2005), we revised
caption ‘‘Nomenclature Changes’’ at the
geographic location for services § 418.3 to implement the provisions of
beginning of your comments.)
In the August 4, 2005 final rule and provided there, but is silent as to what section 408 of the MMA. Section 418.3
in the September 1, 2006 update notice, wage index value should be used for indicated (under clause (1)(ii) of the
we noted that the Office of Management hospice services provided in an definition of ‘‘attending physician’’) that
and Budget (OMB) published a bulletin inpatient setting. We believe that the the nurse practitioner ‘‘* * * meet the
that changed the titles to certain CBSAs. application of the wage index values, for training, education, and experience
Since the publication of the Hospice FY rate adjustments on the geographic area, requirements as the Secretary may
2006 update notice, OMB published where the hospice care is furnished prescribe * * *’’. We believe that the
additional bulletins that updated the provides a reimbursement rate that is a definition for nurse practitioners under
CBSAs. Specifically, OMB added or more accurate reflection of the wages the Medicare hospice benefit should
deleted certain CBSA numbers and paid by the hospice for the staff used to reflect the definition as established for
revised certain titles. Accordingly, in furnish care. We also believe that the Medicare benefit found at § 410.75.
this proposed rule, we are proposing to payment should reflect the location of To ensure consistency, we propose to
clarify that this and all subsequent the services provided and not the revise the definition of ‘‘attending
Hospice rules and notices are location of an office. physician’’ at § 418.3 to cross reference
considered to incorporate the CBSA As a result, we are proposing that the requirement in § 410.75(b).
changes published in the most recent effective January 1, 2008, all payment
rates (routine home care, continuous 2. Care Giver Breakdown and General
OMB bulletin, that applies to the Inpatient Care
hospital wage data used to determine home care, inpatient respite and general
the current hospice wage index. The inpatient care) be adjusted by the (If you choose to comment on issues
proposed tables reflect changes made by geographic wage index value of the area in this section, please include the
these bulletins. The OMB bulletins may where hospice services are provided. In caption ‘‘Care Giver and General
be accessed at http:// other words, the wage component of Inpatient Care’’ at the beginning of your
www.whitehouse.gov/omb/bulletins/ each payment rate is multiplied by the comments.)
index.html. wage index value applicable to the The Medicare hospice benefit places
location in which the hospice services emphasis on the provision of items and
D. Payment for Hospice Care Based on are provided. We are proposing to services to enable an individual to
Location Where Care Is Furnished amend 418.302(g) to reflect this remain at home in the company of
(If you choose to comment on issues proposed change. family and friends. Section
in this section, please include the Currently, hospice claims do not 1861(dd)(1)(G) of the Act provides for
caption ‘‘Site of Service’’ at the contain information identifying the short term inpatient hospice care to be
beginning of your comments) location of the facility where general available when an individual’s pain and
Hospice providers receive payment inpatient and respite care are provided. symptoms must be closely monitored or
for four levels of care based upon the Therefore, we are unable to predict the the intensity of interventions that are
individual’s needs. Section 4442 of the savings or costs associated with the required cannot be provided in any
BBA amended section 1814(i)(2) of the changes associated with this proposed other settings. In recognition of the
Act, effective for services furnished on provision. However, we believe that the stress in providing care for an
individual with a terminal diagnosis, similar to situations where an benefit. The statute is explicit in the
inpatient respite care is available for individual does not have family or requirement that the physician and
family members, who serve as the friends or other means that are able to medical director determine the
primary caregivers, to obtain rest for a take on the role of a caregiver when a prognosis and his or her signature on
period of no more than five days at a hospice election is made. The Medicare the certification attests to that fact. We
time. hospice benefit provides for care that is will provide further clarification in
Medicare policy as described in medically reasonable and necessary for administrative instructions.
chapter 9 of the Medicare Benefit Policy the palliation and management of the
Manual, states that skilled nursing care terminal and related conditions, and is III. Collection of Information
may be required by a patient whose structured in such a way to enable the Requirements
home support has broken down, if this individual with a terminal condition to This document does not impose any
breakdown makes it no longer feasible remain at home, as long as possible, in information collection and
to furnish needed care in the home the company of family and friends. We recordkeeping requirements.
setting. If the hospice and the caregiver, recognize the difficulties surrounding Consequently, it need not be reviewed
working together, are no longer able to the provision of hospice care to an by the Office of Management and
provide the necessary skilled nursing individual who is terminally ill and Budget under the authority of the
care in the individual’s home, and if the who does not have caregivers at home. Paperwork Reduction Act of 1995 (44
individual’s pain and symptom This may be a challenge in rural areas. U.S.C. 35).
management can no longer be provided Section 409 of the MMA established the
at home, then the individual may be Rural Hospice Demonstration which IV. Response to Comments
eligible for a short term general hopes to test alternative mechanisms for Because of the large number of public
inpatient level of care. However, it has providing hospice services for comments we normally receive on
come to our attention that some hospice beneficiaries who lack an appropriate Federal Register documents, we are not
providers are requesting payment for the caregiver and who reside in rural areas. able to acknowledge or respond to them
‘‘general inpatient’’ level of care for However, we intend to monitor the individually. We will consider all
circumstances that do not qualify under usage of the general inpatient care. comments we receive by the date and
the statute, our regulations at We are providing this as clarification time specified in the DATES section of
§ 418.202(e) or Medicare hospice policy. and therefore are not proposing any this preamble, and, when we proceed
In other words, some hospices are changes in existing statute, regulation or with a subsequent document, we will
billing Medicare for ‘‘caregiver policy manual. respond to the comments in the
breakdown’’ at the higher ‘‘general preamble to that document.
3. Certification of Terminal Illness
inpatient’’ level, rather than the lower
payment for ‘‘inpatient respite’’ or (If you choose to comment on issues V. Regulatory Impact Analysis
‘‘routine home care’’ levels of care. in this section, please include the A. Overall Impact
To receive payment for ‘‘general caption ‘‘Certification’’ at the beginning
inpatient care’’ under the Medicare of your comments.) We have examined the impacts of this
hospice benefit, beneficiaries must Section 1814(a)(7)(A)(i) of the Act proposed rule as required by Executive
require an intensity of care directed stipulates that the individual’s attending Order 12866 (September 1993,
towards pain control and symptom physician and the hospice medical Regulatory Planning and Review), the
management that cannot be managed in director initially certify the individual’s Regulatory Flexibility Act (RFA)
any other setting. While there is nothing terminal diagnosis with prognosis of six (September 19, 1980, Pub. L. 96–354),
prohibiting a Medicare approved facility months or less if the disease runs its section 1102(b) of the Act, the
from serving as the individual’s home, normal course. The requirements of the Unfunded Mandates Reform Act of 1995
it is the level of care provided to meet physician certification, including (Pub. L. 104–4), and Executive Order
the individual’s needs which determine supportive documentation were 13132. We estimated the impact on
payment rates for Medicare services. discussed in the hospice care hospices, as a result of the proposed
‘‘Caregiver breakdown’’ should not be amendment proposed rule (67 CFR changes to the FY 2008 hospice wage
billed as ‘‘general inpatient care’’ 70363) and final rule (70 CFR 70548). In index. As discussed previously, the
regardless of where services are these rules, we indicated that a direct methodology for computing the wage
provided, unless the intensity-of-care consultation between the hospice index was determined through a
requirement is met. If the individual is medical director and the attending negotiated rulemaking committee and
no longer able to remain in his or her physician was not a requirement and implemented in the August 8, 1997 final
home, but the required care does not that information supporting the terminal rule (62 FR 42860). This proposed rule
meet the requirements for ‘‘general diagnosis could be obtained through the updates the hospice wage index in
inpatient care’’, hospices should bill hospice admission nurse. We are aware accordance with our regulation and that
this care as ‘‘inpatient respite care’’, that the intent of this has been methodology, incorporating the
payable for no more than 5 days, until construed by some providers, to permit adoption of the CBSA designations used
alternative arrangements can be made. the admission nurse, utilizing in the FY 2007 hospital wage index
As explained, this is a clarification of documents such as local coverage data.
current Medicare policy and is not decisions, to determine eligibility for • Table 1 categorizes the impact on
anticipated to create new limitations on hospice services and certify the hospices by various geographic and
access to hospice care. However, we are individual’s terminal diagnosis. This provider characteristics. We estimate
clarifying that the level of care interpretation is incorrect. We have that the total hospice payments will
provided, not the location of care, is permitted the hospice nurses to obtain decrease $538,000 as a result of the
what determines the appropriate level of information to be used by the hospice proposed FY 2008 wage index values.
payment. Additionally, the medical director as part of the medical We anticipate that the final rule will
circumstances addressed with this documents used in his or her more accurately project payment for FY
policy, and the clarification discussed determination of the terminal diagnosis 2008, based upon changes in the wage
above, should not be construed as and eligibility for the Medicare hospice index values.
• Table A reflects the FY 2008 wage entities and attempted to mitigate any proportion of patient days attributed to
index values for urban areas potential negative effects. general inpatient care would be
designations. In addition, section 1102(b) of the Act appropriately allocated to inpatient
• Table B reflects the FY 2008 wage requires us to prepare a regulatory respite care with this clarification.
index values for rural areas impact analysis if a rule may have a Significant savings could be realized
designations. significant impact on the operations of even if only a small proportion of
Executive Order 12866 (as amended a substantial number of small rural patient days attributed to general
by Executive Order 13258, which hospitals. This analysis must conform to inpatient care were allocated to
merely reassigns responsibility of the provisions of section 603 of the inpatient respite care.
duties) directs agencies to assess all RFA. For purposes of section 1102(b) of For example, to determine the impact
costs and benefits of available regulatory the Act, we define a small rural hospital of allocating 5.0 percent of general
alternatives and, if regulation is as a hospital that is located outside a inpatient care days to inpatient respite
necessary, to select regulatory CBSA and has fewer than 100 beds. We care, we used the FY 2005 patient days,
approaches that maximize net benefits have determined that this notice would expenditures and number of
(including potential economic, not have a significant impact on the beneficiaries electing the hospice
environmental, public health and safety operations of a substantial number of benefit to estimate the impact of the
effects, distributive impacts, and small rural hospitals. We are not clarification of existing policy in this
equity). A regulatory impact analysis preparing an analysis for the RFA proposed rule. The number of inpatient
(RIA) must be prepared for major rules because we have determined that this days was adjusted from 1,250,678 to
with economically significant effects rule will not have a significant 1,188,144. The number of inpatient
($100 million or more in any 1 year). We economic impact on a substantial respite days was adjusted from 96,646 to
have determined that this notice is not number of small entities. 159,180. While inpatient respite
Section 202 of the Unfunded expenditures increased from
an economically significant rule under
Mandates Reform Act of 1995 also $14,000,000 to $23,058,570, general
this Executive Order.
requires that agencies assess anticipated inpatient care expenditures decreased
The RFA requires agencies to analyze costs and benefits before issuing any from $737,300,000 to $700,435,000. In
options for regulatory relief of small rule that may result in expenditure in total, if 5.0 percent of patient days that
businesses. For purposes of the RFA, any 1 year by State, local, and tribal were attributed to general inpatient care
small entities include small businesses, governments, in the aggregate, or by the in FY 2005 were allocated to the
nonprofit organizations, and small private sector, of $120 million or more. inpatient respite level of care, it would
governmental jurisdictions. Most This notice is not anticipated to have an have resulted in net savings of
hospices and most other providers and effect on State, local, or tribal $27,806,430.
suppliers are small entities, either by governments or on the private sector of The impact analysis of this notice
nonprofit status or by having revenues $120 million or more. represents the projected effects of the
of $6.5 million to $31.5 million in any Executive Order 13132 establishes changes in the hospice wage index from
1 year (for details, see the Small certain requirements that an agency FY 2007 to FY 2008. We estimate the
Business Administration’s regulation at must meet when it promulgates a effects by estimating payments for FY
65 FR 69432, that sets forth size proposed rule (and subsequent final 2008 utilizing the FY 2007 wage index
standards for health care industries). For rule) that imposes substantial direct values and the full implementation of
purposes of the RFA, most hospices are requirement costs on State and local the CBSA designations while holding all
small entities. As indicated in Table 1 governments, preempts State law, or other payment variables constant.
below, there are 2,819 hospices. otherwise has Federalism implications. We note that certain events may
Approximately 81 percent of Medicare We have reviewed this notice under the combine to limit the scope or accuracy
certified hospices are identified as threshold criteria of Executive Order of our impact analysis, because such an
voluntary, government, or other 13132, Federalism, and have analysis is future oriented and, thus,
agencies and, therefore, are considered determined that it would not have an susceptible to forecasting errors due to
small entities. Because the National impact on the rights, roles, and other changes in the forecasted impact
Hospice and Palliative Care responsibilities of State, local, or tribal time period. The nature of the Medicare
Organization estimates that governments. program is such that the changes may
approximately 79 percent of hospice In accordance with the provisions of interact, and the complexity of the
patients are Medicare beneficiaries, we Executive Order 12866, this regulation interaction of these changes could make
have not considered other sources of was reviewed by the Office of it difficult to predict accurately the full
revenue in this analysis. Furthermore, Management and Budget. scope of the impact upon hospices.
the wage index methodology was For the purposes of this proposed
previously determined by consensus, B. Anticipated Effects rule, we compared estimated payments
through a negotiated rulemaking We are unable to quantify the extent using the FY 1983 hospice wage index
committee that included representatives of the usage of the general inpatient to estimated payments using the FY
of national hospice associations; rural, level of care in the event of caregiver 2008 wage index and determined the
urban, large and small hospices; multi- breakdown and are, therefore, unable to hospice wage index to be budget
site hospices; and consumer groups. definitively anticipate the impact of our neutral. Budget neutrality means that, in
Based on all of the options considered, clarification of the general inpatient a given year, estimated aggregate
the committee agreed on the level of care policy in the event of payments for Medicare hospice services
methodology described in the caregiver breakdown. For this reason, using the FY 2008 wage index would
committee statement, and it was we solicit comment on what the impact equal estimated aggregate payments that
adopted into regulation in the August 8, of our clarification might be. Based on would have been made for the same
1997 final rule. In developing the anecdotal evidence as well as services if the 1983 wage index had
process for updating the wage index in substantial increases in the number of remained in effect. Budget neutrality to
the 1997 final rule, we considered the claims submitted for general inpatient 1983 does not imply that estimated
impact of this methodology on small care, however, we believe a small payments would not increase since the
budget neutrality applies only to the individual hospice’s program on the of hospice wage index changes have
wage index portion and not the total number of routine home care days been analyzed according to the type of
payment rate, which accommodates provided in FY 2006. The next grouping hospice, geographic location, type of
inflation. shows the impact on hospices by type ownership, hospice base, and size.
As discussed above, we use the latest of ownership. The final grouping shows Our analysis shows that most
claims file available to us to develop the the impact on hospices defined by hospices are in urban areas and provide
impact table when we issue the annual whether they are provider-based or the vast majority of routine home care
yearly wage index update. For the freestanding. As indicated in Table 1 days. Most hospices are medium sized
purposes of this proposed rule, data below, there are 2,819 hospices. followed by large hospices. Hospices are
were obtained from the National Claims Approximately 81 percent of Medicare- almost equal in numbers by ownership
History file using FY 2005 claims certified hospices are identified as with 1,231 designated as non-profit and
processed through June 2006, which voluntary, government, or other 1,265 as proprietary. The vast majority
were the most recent available data. We agencies and, therefore, are considered of hospices are freestanding.
deleted bills from hospice providers that small entities. Because the National 1. Hospice Size
have since closed. For the purposes of Hospice and Palliative Care
this proposed rule, this file is adequate Organization estimates that Under the Medicare hospice benefit,
to demonstrate the impact of the FY approximately 79 percent of hospice hospices can provide four different
2008 wage index values and is not patients are Medicare beneficiaries, we levels of care days. The majority of the
intended to project the anticipated have not considered other sources of days provided by a hospice are routine
expenditures for FY 2008. We anticipate revenue in this analysis. Furthermore, home care days (RHC) representing over
that the final rule will more accurately the wage index methodology was 70 percent of the services provided by
project payment for FY 2008. This previously determined by consensus, a hospice. Therefore, the number of
impact analysis compares hospice through a negotiated rulemaking routine home care days can be used as
payments using the FY 2007 hospice committee that included representatives a proxy for the size of the hospice, that
wage index to the estimated payments of national hospice associations; rural, is, the more days of care provided, the
using the FY 2008 wage index. We note urban, large, and small hospices; multi- larger the hospice. As discussed in the
that estimated payments for FY 2008 are site hospices; and consumer groups. August 4, 2005 final rule, we currently
determined by using the wage index for Based on all of the options considered, use three size designations to present
FY 2008 and payment rates for FY 2007. the committee agreed on the the impact analyses. The three
As noted in previous sections, payment methodology described in the categories are: Small agencies having 0
rates for FY 2008 are published through committee statement, and it was to 3,499 RHC days; medium agencies
administrative issuance. adopted into regulation in the August 8, having 3,500 to 19,999 RHC days; and
Table 1 demonstrates the results of 1997 final rule. In developing the large agencies having 20,000 or more
our analysis. In column 1 we indicate process for updating the wage index in RHC days. Using RHC days as a proxy
the number of hospices included in our the 1997 final rule, we considered the for size, our analysis indicates that the
analysis. In column 2, we indicate the impact of this methodology on small proposed FY 2008 wage index values
number of routine home care days that entities and attempted to mitigate any are anticipated to have virtually no
were included in our analysis, although potential negative effects. impact on hospice providers, with a
the analysis was performed on all types As stated previously, the following slight decrease of 0.1 percent
of hospice care. Column 3 estimates discussions are limited to demonstrating anticipated for small hospices while no
payments using the FY 2007 wage index trends rather than projected dollars. We change is anticipated for medium or
values and the FY 2007 payment rates. used the CBSA designations and wage large hospices.
Column 4 estimates payments using FY indices as well as the data from FY 2005 2. Geographic Location
2008 wage index values as well as the claims processed through June 2006 in
FY 2007 payment rates. Column 5 developing the impact analysis. For FY Our analysis demonstrates that the
compares columns 3 and 4 and shows 2008 the wage index is the variable that proposed FY 2008 wage index values
the percentage change in estimated differs between the FY 2007 payments will result in little change in estimated
hospice payments made based on the and the FY 2008 estimated payments. payments with urban hospices
hospice category. FY 2007 payment rates are used for both anticipated to experience no change
Table 1 also categorizes hospices by FY 2007 actual payments and the FY while rural hospices are anticipated to
various geographic and provider 2008 estimated payments. The FY 2008 experience a slight increase of 0.2
characteristics. The first row displays payment rates will be adjusted to reflect percent. The greatest increase of 0.9
the aggregate result of the impact for all the full FY 2007 hospital market basket, percent is anticipated to be experienced
Medicare-certified hospices. The second as required by section by the Mountain regions, followed by an
and third rows of the table categorize 1814(i)(1)(C)(ii)(VII) of the Act. As increase for East North Central of 0.6
hospices according to their geographic previously noted, we publish these rates percent and Pacific regions of 0.5
location (urban and rural). Our analysis through administrative issuances. percent. The remaining urban regions
indicated that there are 1,858 hospices As discussed in the FY 2006 final rule are anticipated to experience a decrease
located in urban areas and 961 hospices (70 FR 45129), hospice agencies may ranging from 0.6 percent in the East
located in rural areas. The next two utilize multiple wage indices to South Central region to 0.1 percent in
groupings in the table indicate the compute their payments based on the Middle Atlantic region. The greatest
number of hospices by census region, potentially different geographic decrease of 2.6 percent is anticipated for
also broken down by urban and rural locations of the beneficiary for routine Puerto Rico.
hospices. The sixth grouping shows the and continuous home care or the CBSA For rural hospices, the South Atlantic
impact on hospices based on the size of for the location of the hospice agency region and Puerto Rico are anticipated
the hospice’s program. We determined for respite and general inpatient care. to experience no change. Two regions
that the majority of hospice payments For this analysis, we use payments to are anticipated to experience a decrease
are made at the routine home care rate. the hospice in the aggregate based on of 0.9 percent for New England and 0.4
Therefore, we based the size of each the location of the hospice. The impact percent for the mountain regions. The
remaining regions are anticipated to no change in payment while 4. Hospice Base

experience an increase ranging from 0.2 government hospices are anticipated to For hospice-based facilities, a
percent for the East North Central region experience a slight increase of 0.1 decrease of 0.1 percent in payment is
to 0.6 percent for the Middle Atlantic percent. Slight decreases are anticipated anticipated for freestanding facilities.
and East South Central regions. for proprietary hospices of 0.1 percent Home health, hospital and skilled
and 0.2 percent for other categories. nursing facilities area anticipated to
3. Type of Ownership
experience an increase of 0.1, 0.2 and
By type of ownership, non-profit 0.7 percent respectively.
hospices are anticipated to experience BILLING CODE 4120–01–P
EP01MY07.000</GPH>
C. Conclusion List of Subjects for 42 CFR Part 418 requirements as described in § 410.75
Health facilities, Hospice care, (b).
Our impact analysis compared
Medicare, Reporting and recordkeeping * * * * *
hospice payments by using the FY 2007
requirements.
wage index to the estimated payments Subpart G—Payment for Hospice Care
using the FY 2008 wage index. Through For the reasons set forth in the
the analysis, we estimate that total preamble, the Centers for Medicare & 3. Section 418.302 is amended by
Medicaid Services would amend 42 CFR revising paragraph (g) to read as follows:
hospice payments will effectively be
part 418 as set forth below:
budget neutral with a negligible § 418.302 Payment procedures for hospice
decrease from FY 2007 by $538,000. PART 418—HOSPICE CARE care.
Additionally, we compared estimated * * * * *
payments using the FY 1983 hospice 1. The authority citation for part 418
continues to read as follows: (g) Payment for routine home care,
wage index to estimated payments using continuous home care, general inpatient
the FY 2008 wage index and determined Authority: Secs. 1102 and 1871 of the care and inpatient respite care is made
the current hospice wage index to be Social Security Act (42 U.S.C. 1302 and on the basis of the geographic location
budget neutral, as required by the 1395hh).
where the services are provided.
negotiated rulemaking committee. As
Subpart A—General Provision and (Catalog of Federal Domestic Assistance
noted above, the payment rates used Definitions Program No. 93.773, Medicare—Hospital
reflect the FY 2007 rates. The FY 2008 Insurance; and Program No. 93.774,
payment rates will be adjusted to reflect 2. Section 418.3 is amended by Medicare—Supplementary Medical
the full FY 2008 hospital market basket, revising paragraph (1)(ii) in the Insurance Program)
as required by section definition of ‘‘attending physician’’ to Dated: March 15, 2007.
1814(i)(1)(C)(ii)(VII) of the Act. We read as follows: Leslie V. Norwalk,
publish these rates through § 418.3 Definitions. Acting Administrator, Centers for Medicare
administrative issuances. & Medicaid Services.
* * * * *
In accordance with the provisions of Attending Physician means a—(1)(i) Approved: April 11, 2007.
Executive Order 12866, this regulation * * * Michael O. Leavitt,
was reviewed by the Office of (ii) Nurse practitioner who meets the Secretary.
Management and Budget. training, education, and experience BILLING CODE: 4120–01–P
EP01MY07.001</GPH>
EP01MY07.002</GPH>
EP01MY07.003</GPH>
EP01MY07.004</GPH>
EP01MY07.005</GPH>
EP01MY07.006</GPH>
EP01MY07.007</GPH>
EP01MY07.008</GPH>
EP01MY07.009</GPH>
EP01MY07.010</GPH>
EP01MY07.011</GPH>
EP01MY07.012</GPH>
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EP01MY07.016</GPH>
EP01MY07.017</GPH>
EP01MY07.018</GPH>
EP01MY07.019</GPH>
EP01MY07.020</GPH>
EP01MY07.021</GPH>
EP01MY07.022</GPH>
EP01MY07.023</GPH>
EP01MY07.024</GPH>
EP01MY07.025</GPH>
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EP01MY07.029</GPH>
EP01MY07.030</GPH>
EP01MY07.031</GPH>
EP01MY07.032</GPH>
EP01MY07.033</GPH>
EP01MY07.034</GPH>
EP01MY07.035</GPH>
EP01MY07.036</GPH>
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EP01MY07.038</GPH>
EP01MY07.039</GPH>
EP01MY07.040</GPH>
EP01MY07.041</GPH>
EP01MY07.042</GPH>
EP01MY07.043</GPH>
EP01MY07.044</GPH>
EP01MY07.045</GPH>
[FR Doc. 07–2120 Filed 4–26–07; 4:00 pm]

BILLING CODE 4120–01–C
EP01MY07.046</GPH>

Proposed Rule: Medicare: Hospice Wage Index For Fiscal Year 2008

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Proposed Rule: Medicare: Hospice Wage Index For Fiscal Year 2008

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42 CFR Part 418

remaining regions are anticipated to no change in payment while 4. Hospice Base

[FR Doc. 07–2120 Filed 4–26–07; 4:00 pm]

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