CMS’ Proposed 2024 Payment Rule Would Impact Hospices

WASHINGTON—The Center for Medicare & Medicaid Services’ proposed 2024 rule for the home health payment system includes a slew of hospice-specific provisions, many of them designed to reduce fraud and so-called “hospice flipping.” Here’s a look at what’s included, according to the National Association for Homecare and Hospice. 

Categorical Risk Screening: Hospices are currently in the moderate-risk screening category under Section 424.518. However, given growing program integrity concerns in the hospice area, CMS is proposing to move initially enrolling hospices and those submitting applications to report any new owner into the “high risk” level of categorical screening. Revalidating hospices would be subject to moderate risk-level screening. Under “high risk” screening providers must undergo all of the requirements required of “moderate” risk providers (including various screenings and verifications as well as a site visit) and are subject to the following additional requirements:

• Required submission to the Medicare Administrative Contractor (MAC) of a set of fingerprints for a national background check from all individuals with a 5 percent or greater direct or indirect ownership interest in the provider or supplier.
• Conduct of a fingerprint-based criminal history record check of the Federal Bureau of Investigation’s Integrated Automated Fingerprint Identification System on these 5 percent or greater owners.

36-Month Rule: CMS is proposing to extend to hospice providers existing requirements under which the provider agreement and Medicare billing privileges do not convey when a home health agency (HHA) is undergoing a change in majority ownership (CIMO) by sale within 36 months after the effective date of the HHA’s initial enrollment or within 36 months after the HHA’s most recent CIMO. In such cases the prospective provider/owner must:

• Enroll in Medicare as a new (initial) HHA, and
• Obtain a state survey or an accreditation from an approved accreditation organization.

A “change in majority ownership” occurs when an individual or organization acquires more than a 50 percent direct ownership interest in an HHA during the 36 months following the HHA’s initial enrollment or most recent CIMO; this includes an acquisition of majority ownership through the cumulative effect of asset sales, stock transfers, consolidations, or mergers. If the 50 percent ownership threshold is crossed relative to ownership transfer, the 36-month rule is triggered. This requirement is designed to address circumstances under which Medicare provider certification is sought for the sole purpose of selling the certification rather than providing services to beneficiaries. The policy also helps to ensure that when a provider changes ownership that CMS has knowledge as to whether the entity, under new management and ownership, meets the Medicare conditions of participation.

CMS notes that there are several circumstances under which the 36-month rule currently in place for HHAs does not apply. These exceptions are specified below and would be applicable to hospices:

• The HHA submitted two consecutive years of full cost reports since initial enrollment or the last CIMO, whichever is later.
• An HHA’s parent company is undergoing an internal corporate restructuring, such as a merger or consolidation.
• The owners of an existing HHA are changing the HHA’s existing business structure (for example, from a corporation to a partnership (general or limited), and the owners remain the same.
• An individual owner of an HHA dies.

Additional Hospice Ownership Matters: The rule references additional provider enrollment steps to help address hospice ownership and program integrity, including revisions to the Form CMS-855A that were issued in December 2022 and the proposal (as part of the FY2024 Proposed Hospice Payment Rule) that hospice ordering and certifying physicians must be enrolled in or validly opted-out of Medicare.

Deactivation for 12 Months of Non-Billing: Currently CMS has a policy in place under which it has the authority to deactivate Medicare billing privileges for various reasons. Such billing privileges can be reactivated upon submission of required information. Given growing concerns about schemes under which providers hold multiple billing numbers so that in circumstances where one provider number may be subject to an overpayment or investigation, a different (dormant) provider number may be used to bill services. Given growth in these types of schemes, CMS is proposing to revise its requirements at Section 424.540(a)(1) that currently allow for deactivation of a provider number after 12 months if no billings have been submitted; the proposed new time period is 6 months, after which CMS could deactivate billing privileges.

Definition of Managing Employee: Providers and suppliers are required to report their managing employees via the Medicare enrollment application to enroll in Medicare. Section 424.502 currently defines “managing employee” as follows: “general manager, business manager, administrator, director, or other individual that exercises operational or managerial control over, or who directly or indirectly conducts the day-to-day operation of the provider or supplier (either under contract or through some other arrangement), whether or not the individual is a W­2 employee of the provider or supplier.”

In early 2023, CMS proposed a modification to the definition of managing employee for skilled nursing facilities such that the term also includes a general manager, business manager, administrator, director, or consultant, who directly or indirectly manages, advises, or supervises any element of the practices, finances, or operations of the facility. CMS is now proposing to further revise the definition such that the definition of managing employee at Section 424.502 would include the following: “For purposes of this definition, this includes, but is not limited to, a hospice or skilled nursing facility administrator and a hospice or skilled nursing facility medical director.” CMS stresses in the rule that any individual who meets the definition of managing employee must be reported irrespective of the precise amount of managing control the person has.

Previously Waived Fingerprinting of High-Risk Providers and Suppliers:  During the COVID-19 Public Health Emergency, CMS temporarily waived the requirement for fingerprint-based criminal background checks (FBCBCs) for 5% or greater owners of newly enrolling providers and suppliers in the high-risk screening category. CMS now plans to perform FBCBCs for high-risk providers and suppliers that initially enrolled during the PHE upon their revalidation once the PHE ends. CMS is proposing regulatory language that would provide authority to conduct these FBCBCs when such were waived due to emergency declarations at the national, state, or local level. CMS is also proposing to modify existing regulatory language related to providers and suppliers at the moderate-risk level and clarify that certain high-risk providers revert to the moderate risk level once they have undergone FBCBCs when they enrolled initially or upon revalidation.

Expansion of Reapplication Bar: CMS is authorized to prohibit a prospective provider or supplier from enrolling in Medicare for up to three years if its enrollment application is denied because the provider or supplier submitted false or misleading information on or with (or omitted information from) its application in order to enroll. CMS is proposing to expand the maximum length of reapplication bar from the current three years to 10 years.

Ordering, Referring, Certifying and Prescribing Restrictions: CMS is proposing that any provider or supplier currently subject to a reapplication bar may not order, refer, certify, or prescribe Medicare-covered services, items, or drugs. Further, CMS is proposing a prohibition on Medicare payment for any otherwise covered service, item, or drug that is ordered, referred, certified, or prescribed by a provider or supplier that is currently under a reapplication bar.

CMS is also proposing that a physician or other eligible professional who has had a felony conviction within the previous 10 years that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries may not order, refer, certify, or prescribe Medicare-covered services, items, or drugs. Further, CMS is proposing a prohibition on Medicare payment for any otherwise covered service, item, or drug that is ordered, referred, certified, or prescribed by a physician or other eligible professional who has had a felony conviction within the previous 10 years that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.

These provisions would apply regardless of whether the provider or supplier has opted out of Medicare.

Hospice Special Focus Program and Informal Dispute Resolution Process
As required in the Consolidated Appropriations Act of 2021 (CAA 2021), this proposed rule would implement a special focus program (SFP) for poor performing hospices. CMS is also proposing regulations to implement an informal dispute resolution (IDR) process to provide hospice programs an informal opportunity to resolve disputes related to condition-level survey findings for those hospice programs that are seeking recertification for continued participation in Medicare.

The provisions in the CAA 2021 direct the Secretary of Health and Human Services (Secretary) to create a Special Focus Program (SFP) for poor-performing hospice programs, give authority for imposing enforcement remedies for noncompliant hospice programs, and require the development and implementation of a range of remedies as well as procedures for appealing determinations regarding these remedies. CMS finalized all the CAA 2021 provisions related to hospice survey and enforcement in CY 2022 rulemaking except for the SFP.  In the CY 2022 HH PPS final rule, CMS stated it would consider public comments received and seek additional collaboration with stakeholders to further develop a revised proposal and methodology for the SFP.  NAHC and other stakeholders urged CMS to develop a Technical Expert Panel (TEP) for the development of the SFP. 

“We are pleased that CMS listened to this recommendation and in the fall of 2022 CMS contractor, Abt Associates, convened the TEP,” NAHC wrote in its analysis. “The TEP provided feedback and considerations on the preliminary SFP concepts, including developing a methodology to identify hospice poor-performers, criteria for completing the SFP and for termination from Medicare when a hospice cannot complete the SFP, and public reporting.” Click here for previous NAHC Report coverage of the TEP report and a link to the report.

In addition to the SFP, CMS is also proposing a hospice informal dispute resolution process to provide hospice programs an informal opportunity to resolve disputes related to condition-level survey findings for those hospice programs that are seeking recertification from the State survey agency (SA), CMS, or reaccreditation from the accrediting organization (AO) for continued participation in Medicare. Informal dispute resolution would also be offered to hospice programs following a complaint or validation survey and those in the SFP.  NAHC had asked CMS to incorporate the IDR process for hospices and are pleased to see that CMS has done so.

For the SFP, CMS includes definitions, the criteria for selection and completion of the SFP, hospice termination from Medicare, and public reporting of the SFP.  The SFP would commence as of the effective date of the final rule which would be January 1, 2024 as CMS anticipates selecting SFP hospices in CY 2024. CMS proposes to periodically review the effectiveness of the methodology and the algorithm of the SFP.

Proposed definitions are:

• Hospice Special Focus Program (SFP) means a program conducted by CMS to identify hospices as poor performers, based on defined quality indicators, in which CMS selects hospices for increased oversight to ensure that they meet Medicare requirements. Selected hospices either successfully complete the SFP program or are terminated from the Medicare program.
• IDR stands for informal dispute resolution.
• SFP status means the status of a hospice provider in the SFP with respect to the provider’s standing in the SFP, which is indicated by one of the following status levels:
  • Level 1–in progress;
  • Level 2–completed successfully; or
  • Level 3– terminated from the Medicare program.
• SFP survey refers to a standard survey as defined in § 488.1105 and is performed after a hospice is selected for the SFP and is conducted every 6 months, up to three occurrences.

IDR
The IDR process would be available to hospice programs to address disputes related to condition-level survey findings following a hospice program’s receipt of the official survey Statement of Deficiencies and Plan of Correction, Form CMS-2567, which is received after the survey has ended.  IDR is meant to be an informal process whereby the provider has an opportunity to address the surveyor’s findings, either by disputing them or providing additional information. The proposed IDR for hospices is similar to the process already in existence for home health agencies. Some state survey agencies offer an IDR process to hospices even though they’ve not been required to do so, and if the proposed IDR process is finalized some hospices may experience a change in the process.  The purpose of the proposed IDR process would be to provide an opportunity to settle disagreements at the earliest stage, prior to a formal hearing, and to conserve time and money resources potentially spent by the hospice, the SA, and CMS. CMS specified in the proposed rule that the IDR process may not be used to refute an enforcement action or selection into the SFP. Additionally, CMS proposes that the failure of CMS, or the State or the AO, as appropriate, to complete IDR must not delay the effective date of any enforcement action.

The proposed IDR process for hospice programs, like that of HHAs, is for condition-level survey findings which may be the impetus for an enforcement action. Standard-level findings alone do not trigger an enforcement action and are not accompanied by appeal and hearing rights. The proposed IDR process would provide hospice programs an informal opportunity to resolve disputes regarding survey findings for those hospice programs seeking recertification from the SA, CMS, or reaccreditation from the AO for continued participation in Medicare. Additionally, IDR may be initiated for programs under SA monitoring (either through a complaint investigation or validation survey) and those in the proposed SFP. For hospice programs deemed through a CMS-approved accrediting organization (AO), the AO would receive the IDR request from their deemed facility program, following the same process and coordinating with CMS regarding any enforcement actions. For deemed hospice programs, the AO communicates any condition-level findings to the applicable CMS Location. If a deemed hospice fails to meet the Medicare requirements or shows continued condition-level noncompliance, deemed status is generally removed and oversight is placed under the SA.

When survey findings indicate a condition-level deficiency (or deficiencies), the hospice program would be notified in writing of its opportunity to request an IDR for those deficiencies. This notice would be provided to the hospice program when the CMS-2567 Statement of Deficiencies and Plan of Correction is issued to the hospice. The hospice’s request for IDR would be submitted in writing (electronically or hard copy), include the specific survey findings that are disputed, and be submitted within the same 10 calendar days allowable for submitting an acceptable plan of correction.

Results of the IDR would be one of the following:

• If any survey findings are revised or removed by the State or CMS based on IDR, and if CMS accepts the IDR results, the CMS-2567 would be revised accordingly.
  • If CMS accepts the IDR results and the revised Form CMS-2567, then CMS would adjust any enforcement actions imposed solely due to those cited and revised deficiencies.
• If the survey findings are upheld by CMS or the state following IDR, the Form CMS-2567 would not be revised based on the IDR and there would not be adjustments to the enforcement actions.

SFP
The SFP is for hospice programs that the secretary has identified as having substantially failed to meet applicable requirements and would address issues that place hospice beneficiaries at risk for poor quality of care through increased oversight. Although the proposed methodology for the hospice SFP is similar in certain facets to that of nursing homes, the proposed SFP methodology is tailored specifically to the hospice setting and to the data that is available to evaluate hospice performance.

CMS would identify a subset of 10 percent of hospice programs based on the highest aggregate scores determined by the algorithm. The hospices selected for the SFP from the 10 percent would be determined by CMS. hospices with AO deemed status that are placed in the SFP would not retain deemed status and would be placed under CMS or, as needed, SA oversight jurisdiction until completion of the SFP or termination.

Indicators used to identify “poor performance” would be:

• survey reports
• Hospice Quality Reporting Program (HQRP) data

From these data sources, CMS proposes using multiple indicators of hospice care delivery to identify poor performing hospices as outlined in the table below.

CMS would compile the data for the algorithm indicators and remove hospices not eligible for SFP to create a single score for every hospice. A Medicare-certified hospice program would be included in the algorithm if it –

• is an active provider that has billed at least one claim to Medicare FFS in the last 12 months as captured in iQIES; and
• has data for at least one algorithm indicator.

The quality-of-care condition level deficiencies are the 11 conditions of participation in the table below, which are the conditions of participation (CoPs) identified by CMS as being most closely tied to quality of care.  CMS may explore incorporating other CoPs into the SFP methodology and is soliciting comments on an alternative approach that would do this.

CMS would count the total number of quality-of-care CLDs from the previous 3 consecutive years of data.  In addition to quality-of-care CLDs, CMS proposes to include the total number of substantiated complaints received against a hospice in the last 3 consecutive years of data before the release of the SFP selection list.

In addition to the survey data, CMS would use HQRP data in the SFP algorithm.  Specifically, CMS is proposing to include five publicly reported HQRP measures and the Hospice Care Index (HCI) overall score to identify poor performing hospices, as follows:

• Medicare claims-based measure: – Hospice Care Index (HCI) Overall Score
• CAHPS Hospice Survey Data measures:
  • Help for Pain and Symptoms
  • Getting Timely Help
  • Willingness to Recommend this Hospice
  • Overall Rating of this Hospice