Hospice Compliance and Quality Reporting Updates (2022)

Written by the Open Caregiving Team - Last Updated: January 3, 2022

Payment Changes

Increase in Aggregate Payment Cap

July 2021 – CMS Fiscal Year (FY) 2022 final rule included a 2% increase to the hospice payment cap to $31,297 up from $30,683 for FY 2021. This comes after MedPAC voted earlier in 2021 to reduce the hospice payment cap by 20% and make the payment cap wage-adjusted.

MedPAC believes a wage adjusted payment cap would even out the playing field for providers in areas that have higher labor costs while a reduction to the payment cap would limit the concentrated upside among providers optimizing for high profit margins. MedPAC described these providers that would be affected by a decreased payment cap as:

  • Having high average lengths of stay
  • Having high live-discharge
  • Are mostly for profit recent entrants to the Medicare program

For MedPAC’s recommendations to be implemented, Congress would have to accept these changes which currently seems unlikely based on past congressional reluctance to reduce hospice payments.

Increase in Medicare base payment rates for hospice

July 2021 – CMS FY 2022 final rule also included a 2% increase in payments from FY 2021. This goes against MedPAC’s recommendation to keep FY 2022 hospice payment rate the same as FY 2021.

Payment reduction for failing to meet HQRP requirements

CMS announced that the payment reduction for failing to meet HQRP requirements has been increased from 2% to 4% starting in the FY 2024 Annual Payment Update (APU). The current 2% payment reduction will remain in effect through FY 2023.

Each fiscal year starts on October 1st and ends on September 30th. Providers must comply with the reporting requirements of both HIS and CAHPS® in the calendar year to get the full APU in the corresponding fiscal year.

Rebasing and revising hospice labor shares

The FY 2022 final rule also rebases and revises the labor shares and consequently the non-labor portion for all four levels of care. The updates are as follows:

FY 2021 Labor Shares FY 2022 Labor Shares Updates FY 2022 Non-labor Portion Updates
Routine home care (RHC) 68.71% 66.0% 34%
Continuous home care (CHC) 68.71% 75.2% 24.8%
Inpatient respite care (IRC) 54.13% 61.0% 39.0%
General inpatient care (GIP) 64.01% 63.5% 36.5%

Updates to Hospice Conditions of Participation (CoPs)

Due to the COVID-19 pandemic, CMS created increased flexibility for providers in an effort to make the delivery of care more manageable under the pandemic circumstances. Some of these temporary waivers are now becoming permanent rules.

The 2 most notable changes that will become permanent rules include:

  1. Flexible aid testing: During the competency evaluation of hospice aids, providers will now be able to use pseudo-patients (definesd by CMS as “a person trained to participate in a role-play situation or a computer-based mannequin device”) rather than real patients.
  2. Specific competency evaluation: For aids that showed specific deficiencies or skill gaps, CMS is forcing providers to evaluate those specific areas of improvements rather than multiple areas within the competency evaluation. The goal of this is to make it easier to re-train existing aids and get them back into the workforce while delivering a high-quality of care.

Value Based Payment Models

The head of The Center for Medicare & Medicaid Innovation (CMMI) Liz Fowler, has made it clear that CMS is committed to transitioning hospice fee-for-service towards value based models. With three value based hospice models currently being tested, you can expect that one or multiple will make up a large portion of the market in the coming years. We outline each value based hospice model in the guides below:

  1. Direct Contracting for Hospice
  2. Medicare Advantage Hospice Carve-in
  3. Primary Care First (SIP)

Compliance, Surveys & Regulation

Uptick in hospice audits and survey updates

While the COVID-19 pandemic paused both hospice regulatory audits and planned updates to the survey process, 2021 has proved to be a busy year for both.

Regulatory activity is heating up and regulators are keeping a close eye on hospice providers after numerous high-profile settlements over the last few years. While not all changes to the hospice survey process are finalized yet, most industry experts believe there is a pretty clear picture of the changes providers need to prepare for moving forward.

Key updates to the hospice survey process include

  • Emphasis on quality of care – through the hospice Conditions of Participation (CoPs)
    • Patient’s rights
    • Initial and comprehensive assessment of the patient
    • Interdisciplinary group, care planning and coordination of care
    • Quality assessment and performance improvement
  • The creation of a Special Focus Program (SFP) with the authority to discipline providers that sustain repeated serious deficiencies by:
    • Issuing fines
    • Reduced reimbursement
    • Management changes
    • Revoking Medicare certification
  • Increasing the frequency of surveys  – from every 3 years to every 2 years
  • Publicizing survey results – from hospice accreditation surveys conducted by ACHC, CHAP and the Joint Commission to both the public and state agencies
  • Better educating surveyors – through additional trainings specific to hospice and palliative care

Strategies to prepare for the hospice survey revamp

  • Review your latest survey results to make sure you’ve thoroughly addresses and corrected any deficiencies or areas of improvement.
  • Set up regular mock surveys conducted by a third party.
  • Stay abreast on the latest changes and requirements in the scenario that you do receive a citation.

Strategies to avoid hospice regulatory issues

While there is some grey area that providers must learn to navigate, there are crucial strategies providers can focus on to operate within the law and avoid costly regulatory distractions:

  • Patient Eligibility: The most common fraud cases brought against hospices are related to the False Claims Act where providers bill Medicare for specific services that the patient was not actually eligible for. While some of these decisions may be subjective, you can avoid unnecessary complaints by acting consistently and having documentation that backs up your clinical decision making.
  • Length of stay: Any unusual patterns around length of stay beyond 6 months will trigger questions among regulators to investigate further.
  • Live discharges: Keep a close on your live discharge rate relative to industry averages.
  • Kickbacks – hospice providers can by no means offer any incentives to referral sources for sending the provider patients
  • Detailed documentation: Audits and investigations may not always be avoidable. Accurate and detailed documentation on your patients and practices is your best defense against regulatory action. Incomplete or inaccurate documentation can lead to deficiencies even when all else is up to the latest standards.
  • Developing a plan – have a plan ready that allows you to quickly gather documentation if you are hit with a complaint or inquiry. The faster you can show why a decision was made the better.

Revised hospice election statement addendum requirements

The updated hospice Conditions of Participation (CoPs) adds greater clarity to the election statement addendum requirements by specifying that:

  1. When changes to what will be covered under the hospice benefit occur, providers must give the addendum to patients or their caregivers irrespective of if they request it.
  2. When the addendum is requested within 5 days of election, providers have up to 5 days from the date a patient or caregiver requests the addendum to share it with them.
  3. When the addendum is requested during the period of care, hospices must provide the addendum within 3 days of the request (not 72 hours from the request).
  4. If a patient refuses to sign the addendum, providers must document the reason the patient refused to sign and record the date it was presented to the patient.

It is crucial to keep clear documentation of who has requested, received and signed the addendum. Not doing so puts you at risk of claim denial and financial loss.


Hospice Quality Reporting Program Updates

Temporary COVID-19 Data Freeze

  • Due to the COVID-19 pandemic, public reporting of hospice quality measures is frozen from November 2020 until February 2022. This means the HIS and CAHPS information shared on Care Compare during the November 2020 refresh will remain constant until February 2022.
  • Even though public reporting is frozen through 2021, the reporting requirement deadlines remain in effect for hospice providers.

Hospice Outcomes & Patient Evaluation (HOPE)

May 2021 – The Hospice Outcomes & Patient Evaluation tool moved from alpha to beta testing as CMS started recruiting a diverse group of 34 hospice providers to beta test the HOPE tool. This is the final testing phase prior to the rule-making stage.

The goal of HOPE is to replace the Hospice Item Set (HIS) by capturing “patient and family care needs in real-time and throughout the hospice stay with the flexibility to accommodate patients with varying clinical needs.” Unlike HIS which collects data from medical records, HOPE will collect information about care throughout the patient’s experience in hospice.

While some providers are concerned that the new HOPE metrics and collection methods may be burdensome to provider workflow and operations, there are ways to prepare. Here is what you need to know to prepare for HOPE:

  • CMS plans to keep iterating on the tool before rolling out a national test based on what they learn from providers in the beta test phase.
  • There will be time for public comment on the tool after the national testing phase.
  • CMS will offer providers training and technical implementation guidance once the tool is more solidified and closer to implementation
  • Providers can get prepared by contacting their EMR and other related technology providers to make sure they are staying up to date on the latest HOPE developments.

HOPE should help quality providers shine. Stay in the loop, be prepared, and identify who in your organization should take the lead.

Hospice Care Index

July 2021 – CMS has finalized a new HQRP measure called the Hospice Care Index (HCI). The HCI is designed  to use claims data to help communicate to caregivers, patients and families which hospice providers are a good fit for them. CMS is hoping to align the Hospice Care Index with the results from CAHPS surveys.

CMS is choosing to use claims data for HCI because of its availability at scale and because it minimizes the administrative burden on providers. HCI will use metrics such as weekend visits, per-beneficiary spending, and the number of visits near death among others.

CMS will publicly report the measure starting in May 2022 at the earliest. CMS will also use HCI to add star ratings to the consumer facing Care Compare platform.

Learn more about the process and timeline for creating HCI on CMS’ Quality Measure Development page.

Hospice Visits in the Last Days of Life (HVLDL)

July 2021 – Also finalized in CMS-1754-F is publicly reporting Hospice Visits in the Last Days of Life (HVLDL) based on medicare claims data. The goal of adding this measure is to empower patients and families to make more educated decisions about the hospice provider they choose. On the flip side, it incentives providers to focus on delivering the highest quality of care at the end of life.