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Hospice Final Rule: Non-Hospice Spending, Diagnosis Coding, Quality Reporting, Program Integrity (Part 2 of 2)


Last week, Simione Healthcare Consultants published the first of two advisories on the Centers for Medicare & Medicaid Services (CMS) FY 2016 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements Final Rule (CMS-1629-F).  READ PART 1 NOW (Hospice Wage Index and Payment Rate)

In addition to rate and reimbursement changes, other key areas of the CMS FY 2016 Hospice Wage Index Final Rule include hospice payment reform research and analysis (non-hospice spending), relatedness, diagnosis coding on claims and comprehensive assessment. CMS has expressed strong concern over the “unbundling” of the Hospice Benefit, with hospice providers making the determination that certain items would not be covered under the Medicare Hospice Benefit, therefore making them payable by other Medicare sources. This second installment about the Hospice Final Rule focuses on non-hospice spending, diagnosis coding, hospice quality reporting program requirements and hospice program integrity.  We will provide a summary of these key items and identify operational strategies for hospices to help ensure compliance in these areas.

Coverage of “Virtually All”

The 2016 Final Rule reiterates the requirement for hospices to cover “virtually all” of the care and services to a hospice patient – leaving coverage outside of the hospice benefit to only rare occasions, and the decision of unrelated care, treatment and medications the responsibility of the hospice physician/medical director – and not of hospice management, nurses or a hospital.  Hospices really need to pay attention to how they are deciding and documenting coverage of related and unrelated care and services.  The hospice physician decisions need to be clearly documented in the medical record.

Diagnosis Coding & Comprehensive Assessment

The HIPAA rule requires that every provider and every payer follow the same coding guidelines, and that all claims be in compliance with the coding rules. Diagnoses on claims should follow the ICD-10 coding guidelines (effective 10/01/2015).  The biggest clarification regarding hospice diagnosis coding is the requirement that hospices submit ALL diagnoses on claims (including mental health codes), not just related diagnoses per the previous guidelines. Given the complexities at the end of life, it is unlikely that a patient will have only one diagnosis reported on a claim.

Earlier research by CMS found that 75% of claims reporting one diagnosis actually had patients with an average of five or more chronic conditions. This demonstrates that hospices have not coded accurately by and large, but they are improving and have made great strides.  More recent CMS findings show that hospice claims having one diagnosis improved from greater than 75% to 49% in calendar year 2014.  This is still a challenge for some hospices, especially those who rely on clinicians or supervisors to code; these staff may not have the necessary training and understanding to code accurately.  It is more important than ever to make sure that your hospice resources include a qualified coder.

Hospice providers have much homework to do when it comes to the interplay of ICD-10 and new payment changes.  As we move into a more highly regulated environment, these assignments include:

  • Careful oversight of services paid outside the Medical Hospice Benefit
  • Review of internal processes related to documentation of non-related treatments, medications, testing and inpatient stays
  • Comprehensive assessment (initial and updates)
  • Improved processes for coordinating care and services
  • A higher level of ICD-10 coding expertise

A key aspect of recognizing and documenting all diagnoses is the Comprehensive Assessment. CMS has expressed concern with the processes that hospices are using and that they may not be performing the review as intended by the regulations – to reflect both the patient’s changing conditions and what is impacting the patient’s prognosis.  The Comprehensive Assessment and updates to the Plan of Care as articulated by the Conditions of Participation (CoPs) will help recognize the conditions that affect an individual’s terminal prognosis. The Comprehensive Assessment and Plan of Care should be updated as often as necessary to meet the patient and family’s needs, but minimally every 15 days.

To meet all current regulatory and compliance related requirements, including but not limited to the Comprehensive Assessment, hospices are encouraged to develop a comprehensive survey readiness program which includes, at a minimum, the implementation of processes to demonstrate compliance with Medicare Hospice CoPs through:

  • Record reviews
  • Personnel record reviews
  • Staff interviews
  • Document review and home visits
  • Interdisciplinary group (IDG) meeting notes
  • Quality Assessment/Performance Improvement (QAPI) program requirements

Hospice Quality Reporting Program (HQRP) and CAHPS Hospice Survey

As noted in our previous article, effective with the 2016 Final Rule, CMS is implementing 70% compliance threshold for timely submission of HIS admissions and discharge data for all HIS assessments completed as of January 1, 2016. Hospices failing to meet these compliance thresholds will be subject to a 2% reduction in payment rates effective with the 2018 APU.

CMS has stated that the “ultimate goal is to require all hospices to achieve a timeliness requirement compliance rate of 90% or more.” In proposing these threshold requirements, CMS is seeking to align hospice providers with other healthcare setting requirements, such as home health (OASIS) and skilled nursing facilities (MDS). Hospices not only have to participate in the hospice quality reporting program, but also must meet HIS assessment compliance thresholds in order to avoid the 2% rate reduction.

CMS will grant exceptions/extensions with respect to the reporting of required quality data when there are extraordinary circumstances beyond the control of the provider. In these cases, the hospice will not incur payment reduction penalties. CMS has noted very specific exceptions in the final rule on its Hospice Quality Reporting Website.

Hospice providers have been implementing the requirements for CAHPS Hospice Survey data collection and reporting since January 2015. CMS announced in the proposed rule that CAHPS Hospice Survey data will be publicly reported when at least 12 months of data are available. Currently, there is no date set for implementation of what will likely be referred to as Hospice Compare.

Future Quality Reporting

While there are no new measures proposed for the 2017 reporting cycle or FY 2017, CMS is working with the contractor to identify measure concepts for future implementation in the hospice quality reporting program. Based on input from stakeholders, CMS has identified four high-priority concept areas for development of future measures. These include:

  • Patient-reported pain outcome that incorporates patient and/or proxy report regarding pain management
  • Claims-based measures focused on care practice patterns, including skilled visits in the last days of life, burdensome transitions of care for patients in and out of the hospice benefit, and rates of live discharges from hospice
  • Responsiveness of hospice to patient and family care needs
  • Hospice team communication and care coordination

Hospice providers are encouraged to monitor industry research and government agency reports such as Abt Associates and Medicare Payment Advisory Commission (MedPAC) reports, as well as their own data from the Program for Evaluating Payment Patterns Electronic Report (PEPPER) to get indications for future measures being considered. Hospices should review their current QAPI program reports and other available data to determine their risk of exposure with these areas. ALL of these concepts identify where CMS is heading and how important it is for agencies and clinical staff to ensure accuracy with HIS documentation and address all of the hospice care experience measures with the family.

As part of the CMS FY 2016 Hospice Wage Index Final Rule, CMS has revised the HQRP reporting requirement to mandate that new hospices will be responsible for HQRP reporting upon Medicare Certification (CCN) notification.  CMS believes this change in policy to the effective date of the CCN will provide sufficient time for new hospices to establish appropriate collection and reporting mechanisms to submit the required quality data to CMS. New hospices must take steps during the initial certification process to become familiar with HQRP and the QAPI program in order to be prepared for these requirements.

Future Program Integrity

CMS has also reiterated its focus on program integrity efforts in the 2016 FY Hospice Wage Index Final Rule. CMS references The Institute of Medicine (IOM) 2014 report, Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life, among other publications which discuss vulnerabilities in the current health care system, especially related to those who are approaching the end of life. To address some of these vulnerabilities, CMS restates its efforts to improve oversight, including the recent IMPACT Act legislation, which requires increased hospice program surveillance through more frequent hospice surveys and medical review efforts. All of these efforts seek to protect Medicare hospice beneficiaries, as well as the integrity of the Medicare Hospice Benefit.

Hospices are encouraged to implement comprehensive regulatory and reimbursement compliance programs and review the OIG Work Plan, reports and advisories for potential target areas. Target areas include hospice in assisted living facilities, utilization of Continuous Care, General Inpatient Care in skilled nursing facilities, live discharges, skilled visits within the last seven days of a patient’s life, and patients with lengths of stay greater than 180 days.

CMS is expanding the reporting of compliance notifications through the Quality Improvement and Evaluation System (QIES) for Certification and Survey Provider Enhanced Reports (CASPER) system.  This includes:

  • Expanding communication through memos, MLN matters and CMS website notices
  • Publishing a list of hospices who successfully meet reporting requirements for the applicable payment determination on the HQRP web site. This list will be updated annually after reconsideration requests are processed.

Compliance and Quality Assessment/Performance Improvement (QAPI) Implementation Strategies

Due to anticipated future public reporting requirements, it is imperative that hospices ensure that staff are trained and understand the questions for both the HIS and the CAHPS Hospice Survey, and the potential impact their actions may have on the patient/family experience of care, hospice outcomes, and hospice reimbursement. As a short checklist on these quality reporting and compliance priorities, we recommend that providers:

  • Monitor agency data trends and reports (HIS, CAHPS Hospice Survey, PEPPER)
  • Monitor CMS,  MedPAC, Abt Associates, OIG Work Plan and other industry trends/research for future target areas
  • Implement comprehensive compliance program, survey readiness and QAPI program to monitor and address identified trends/issues
  • Take action to ensure regulatory and reimbursement compliance

Hospices must ensure QAPI programs are agency wide, directed by the governing body and containing process/outcome measures and data collection specific to each hospice’s needs, in addition to the mandated HQRP requirements. The time is now for comprehensive QAPI and compliance oversight efforts to be at the forefront of hospice operations, as the data collected by hospices is directly impacting our present and future as an industry.

Contact Simione at 844.215.8822 for assistance with your hospice reimbursement, regulatory, operational, QAPI, referral management, cost reporting, and compliance program needs.