2022 CMS Proposed Rule Webinar

May 20, 2021

The Centers for Medicare & Medicaid Services (CMS) puts forth a set of proposed changes to regulation, known as a Proposed Rule, every fiscal year. The proposed set of changes are founded on an extensive analysis of hospice utilization, reporting and metrics, spending, and other disparities among programs. 

A document of the fiscal year findings and subsequent proposed changes is posted to the CMS newsroom and published to the Federal Register. Once the document is posted, there is a 60-day period during which the docket remains open for public comments. Once the commenting period concludes, the CMS publishes the regulation to the Code of Federal Regulations (CFR) and submits it to the Government Accountability Office (GAO) and Congress for review. If approved, the regulation then goes into effect within 60 days of its publication.

A Brief Summary of the Proposed Rule

  1. Wage Index and Payment Rates
    • Hospice payment update of +2.3% 
    • Economic impact is around $530 million in increased payment to hospices
  2. Hospice Cap Amounts
    • Hospice cap amount increased by 2.3%
    • 2021: $30,683.93 → 2022: $31,389.66
  3. Labor Shares
    • Separate labor shares based on level of care
    • 2021: CHC labor shares 68.71% → 2022: 74.6%
    • 2021: RHC labor shares 68.71% → 2022: 64.7%
    • 2021: IRC labor shares: 54.13% → 2022: 60.1%
    • 2021: GIP labor shares: 64.01% → 2022: 62.8%
    • Five Major Components: Direct patient care salaries, Direct patient care cost benefits, other patient care salaries, overhead salaries, and overhead benefit costs
  4. HQRP Changes
    • Transition to QIES ASAP evaluation systems
    • Removal of 7 HIS Process Measures
    • New HCI measure added
    • Publicly reported CAHPS Star Ratings
  5. Quality Data Submission Reporting Requirements
    • 90% submission threshold for all HIS records
    • 30-day deadline

Wage Index and Payment Rates

There are many important updates and changes expected in the 2022 Hospice Proposed Rule. Because many of the changes will affect revenue and labor, early awareness can be crucial for hospice agencies.  

Firstly, the proposed regulation is estimated to have an impact of $530 million in increased payments to hospices during the fiscal year. This is reflected in a 2.3 percent increase in hospice payments and in the 2.3 percent increase in the hospice cap, which is proposed to be $31,389.66. The document also proposes no cap on wage index decreases, regardless of geographic reclassification (urban and rural). The wage index value will be applied to the labor portion of the hospice RHC or CHC payment rate. 

Rebase & Revise Labor Shares

CMS proposes to establish separate labor shares based on level of care. The changes in labor shares for CHC, RHC, IRC and GIP care can be seen at the beginning of this article. 

The five key components on which the compensation cost weight is derived include (1) direct patient care salaries, (2) direct patient care cost benefits, (3) other patient care salaries, (4) overhead salaries, and (5) overhead benefit costs. Total compensation costs would be calculated by a summation of the costs of the five components for each level of care. Essentially, this would be accomplished by setting rates according to Annual Medicare Cost Reports.

Regulation Text Changes

The Election Statement Addendum language has been altered to clarify required submission and sign dates. Facilities will be required to provide the addendum to the patient within five days after the completion of the comprehensive assessment if requested at time of election. If the addendum is requested within five days after the date of election, it must be provided within three days. 

The addendum signature timeframe requirements are clarified in the Federal Register document. Rather than requiring the “signature date” to be within the timeframe, CMS proposes that the “date furnished” must be within the required time frame, allowing patients extra time to review the paperwork and sign electronically. Should the patient refuse to sign, their refusal must be documented in the patient’s medical record. If the non-hospice-provider, such as a Medicare contractor, requests the addendum, they are not obligated to sign. 

>> Other language has been changed to clarify requirements. These minor changes can be viewed in our recent webinar summarizing the proposed changes. 

HQRP Changes

There are multiple proposed changes to HQRP:

  1.  Hospices will be transitioning to the Quality Improvement and Evaluation System (QIES) Assessment and Submission Processing (ASAP) system as finalized by the FY2020 final rule. Hospices expect to receive a notice within 90 days of the transition. 
  2. The current seven HIS process measures are proposed to be removed by May of 2022. 
  3. CMS introduces a new measure to the HQRP called the Hospice Care Index (HCI), a measure which includes 10 indicators of quality calculated from claims data. 
  4. CAHPS Star Ratings will be publicly reported on the Care compare or successor websites.

Quality Data Submission Reporting Requirements

CMS proposes that 90 percent of all required HIS records must be submitted and accepted within the 30-day completion deadline in order to avoid statutorily mandated payment penalties. To comply, the information must be collected monthly using the CAHPS Hospice Survey and utilize a CMS-approved third-party vendor. 

KanTime and Waystar had the opportunity to discuss the new rulings in a recent webinar. To learn more, watch the full webinar, Hospice Proposed Rule: How To Prepare for 2022.