On April 8, 2021, the Centers for Medicare & Medicaid Services (CMS) issued the Hospice FY2022 Proposed Payment Rule that also provides proposed updates to the Hospice Quality Reporting Program (HQRP) and the Hospice Conditions of Participation (CoPs). In addition to the proposed changes for hospice providers CMS included proposed changes to the Home Health Quality Reporting program (HH QRP) to resume in the reporting for January 2022. The proposed rule for hospice and home health QRP is summarized below.

CMS plans for Home Health providers to resume public reporting for the HH QRP beginning with the January 2022 refresh of Care Compare. The proposed rule includes HH QRP to display publicly three quarters of certain Outcome and Assessment Information Set (OASIS) data due to the COVID-19 Public Health Emergency (PHE) exemptions of 2020 first and second quarter data. The HH QRP proposal is being included in this rule because it is necessary to finalize the rule by October 1, 2021, for the  public reporting to begin January 2022.


Routine Annual Rate Setting Changes


The proposed hospice payment update for FY2022 is estimated at a 2.3% ($530 million) payment rate increase for hospices in FY2022 who meet the quality reporting requirements. Hospices who fail to meet the quality reporting requirements will receive a 2% point reduction to the annual payment update for FY2022.

The proposed hospice cap amount is $31,389.66 (FY 2021 cap amount of $30,683.93 increased by 2.3%).


Proposed Medicare Hospice Payment Policies


Hospice Data Analysis is included in the proposed rule and CMS is requesting public comment including hospice providers, patients, and advocates on Hospice Utilization and Spending Patterns to help inform potential future policy development. The data analysis shows a continued increase average length of stay for hospice patients and increasing Medicare non-hospice spending with over $1 billion spent under Medicare Parts A, B and D during hospice elections in FY2019 reflecting an 18.7% increase in Medicare dollars for non-hospice spending between FY2016 and FY 2019.

  • CMS is seeking comments on all aspects of the utilization analysis provided in the proposed rule, including:
    • How changes in patient characteristics may have influenced any changes in the provision of hospice services
    • Skilled visits in the last week of life and particularly what factors determine how and when visits are made as an individual approaches the end of life
    • Information surrounding hospices’ determinations as to what items, services, and drugs are related versus unrelated to the terminal illness and related conditions, and on what other factors may influence whether/how certain services are furnished under hospice
    • Whether the hospice election statement addendum has changed the way hospices make care decisions and how the addendum is used to prompt discussions with beneficiaries and non-hospice providers to ensure beneficiary care needs are met


Clarifications to the regulations text changes on certain aspects of the Hospice Election Statement Addendum requirement that went into effect October 1, 2020.

  • Necessary for hospices to document that the addendum was discussed and whether or not it was requested, in order to prevent potential claims denials related to any absence of an addendum (or addendum updates) in the medical record.
  • CMS is proposing to allow the hospice to furnish the addendum within 5 days from the date of a beneficiary or representative request if the request is within 5 days from the date of a hospice election. For example, if the patient elects hospice on December 1 and requests the addendum on December 3, the hospice would have until December 8 to furnish the addendum.
  • CMS proposes to clarify in regulation that the addendum “date furnished” must be within the required timeframe within 3 or 5 days (depending upon when the request for the addendum was made), rather than the signature date.
  • CMS proposes to clarify in a situation when the patient or patient representative refuses to sign the addendum that the hospice MUST clearly document in the patient record and on the addendum form the reason the addendum is not signed but this does not change the timeframe the hospice must provide the addendum in writing.
  • CMS proposes to clarify if the addendum is requested and the patient revokes or discharges within the required timeframe of 3 or 5 days (depending upon when the request for the addendum was made) the hospice is not required to furnish the addendum.
  • CMS proposes to clarify if the patient dies, revokes or is discharged after the addendum has been provided in writing but the addendum has not been returned signed then CMS expects that the hospice would document in the patient record and on the addendum form the date it was provided and explained noting the patient died, revoked or was discharged prior to signing the addendum.
  • CMS proposes to clarify in regulation that if only a non-hospice provider or Medicare contractor requests the addendum (and not the beneficiary or representative) the non-hospice provider is not required to sign the addendum.
  • CMS proposes to change text at §418.24(c) in alignment with sub regulatory guidance indicating that hospices have “3 days,” rather than “72 hours” to meet the requirement to furnish the addendum when a patient requests the addendum during the course of hospice care.


Hospice Labor Shares


CMS has proposed to rebase and revise the labor shares for the hospice payment rates for all four levels of care based on the 2018 Medicare Cost Reports (MCR) data for freestanding hospice facilities. CMS is proposing to derive a compensation cost weight for each level of care based on the five major components below. The total compensation costs for each hospice provider would then be calculated by summing costs of the five components for each level of care.

  • Direct patient care salaries and contract labor costs – costs associated with medical services provided by medical personnel including physicians, RNs, and hospice aides
  • Direct patient care benefits costs
  • Other patient care salaries – salaries attributable to patient transportation, labs, imaging services, and other services
  • Overhead salaries and
  • Overhead benefits costs


Hospice Conditions of Participation


Changes to the Hospice Conditions of Participation (CoPs) include proposed changes to the hospice aide competency evaluation standards making certain flexibilities that are allowed during the COVID-19 Public Health emergency (PHE) permanent.

  • CMS proposes to allow for hospice aide competency testing for those tasks that must be observed being performed on a patient to be assessed by observing the hospice aide with a pseudo-patient, such as a person trained to participate in a role-play situation or a computer-based mannequin device, instead of actual patients.
  • CMS proposes to amend the requirement that the hospice aide must complete a full competency evaluation when an area of concern if identified during an RN on-site supervisory visit and instead will only need to complete a competency evaluation of the deficient skill and all related skill(s).


Hospice Quality Reporting Program


Proposed changes to the Hospice Quality Reporting Program (HQRP) include:

  • A new measure to the HQRP called the Hospice Care Index. This single measure includes 10 indicators of quality that are 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. If finalized, this measure would be publicly reported no earlier than May 2022.
  • Adding the claims-based Hospice Visits in the Last Days of Life (HVLDL) measure for public reporting. CMS indicated within the FY2022 proposed rule that public reporting of this claims-based measure supports patient empowerment and transparency of hospice performance by informing individuals seeking hospice services and incentivizes hospices to provide high quality care.
  • Removal of the seven individual Hospice Item Set (HIS) measures because a more broadly applicable measure, the Hospice Comprehensive Assessment Measure (NQF # 3235) for the particular topic is available and already publicly reported.
  • Addition to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) a Hospice Survey Star rating on Care Compare in order to make comparisons between hospice more straightforward and make it easier for consumers to better understand than absolute measure scores currently on the Care Compare for hospices.
  • Update on the Hospice Outcome and Patient Evaluation (HOPE) assessment instrument.


HPS is in the process of a detail analysis of this proposed rule and will be providing more information on some of the key components in a future blog and the HPS Alliance Webinar that is coming April 29, 2021.

If you need additional information feel free to give us a call or send us an email. HPS is always here to support you!