FY2017 Hospice Quality Update

Overview of the FY2017 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements (CMS-1652-P)

As mandated by Section 3004(c) of the Affordable Care Act, Hospices have been collecting 7 Hospice Quality Reporting Program (HQRP) measures using the Hospice Item Set (HIS) since July 1, 2014. On April 28, 2016, the Centers for Medicare and Medicaid Services (CMS) published the proposed FY 2017 Hospice Wage Index and Payment Rate Update, which includes the addition of two new quality measures:

  • Hospice Visits when Death is Imminent Measure Pair, and
  • Hospice and Palliative Care Composite Process Measure—Comprehensive Assessment at Admission

The first measure, Hospice Visits when Death is Imminent, includes two sub-measures:

  • Sub-measure 1: assesses the percentage of patients receiving at least 1 visit from a registered nurse, physician, nurse practitioner, or physician assistant in the last 3 days of life and addresses case management and clinical care.
  • Sub-measure 2: assesses the percentage of patients receiving at least 2 visits from medical social workers, chaplains or spiritual counselors, licensed practical nurses, or hospice aides in the last 7 days of life. It gives providers the flexibility to provide individualized care that is in line with the patient, family, and caregiver’s preferences and goals for care and contributing to the overall well-being of the individual and others important in their life.

This measure will require the release of a new Discharge Hospice Item Set (HIS) 2.0 containing four new items to collect the necessary data elements for this measure.

CMS’s goal for this measure is to encourage hospices to visit patients and caregivers during the last days of a patient’s life to address the patient’s care needs and improve quality of life. CMS cited the fact that clinician visits to patients at the end of life are associated with improved outcomes, including a decreased risk of hospitalization, fewer emergency room visits, and reduced hospital deaths. These visits also decreased distress for caregivers and were associated with a greater satisfaction by the patient and family in the hospice care provided by the agency. Despite these benefits, research has shown that 28.9 percent of Routine Home Care hospice patients did not receive a skilled visit on the last day of life (Abt Associates – Medicare Hospice Payment Reform Report, 2014).

The second measure, Hospice and Palliative Care Composite Process Measure—Comprehensive Assessment at Admission, is intended to evaluate whether all HQRP process measures have been addressed. To calculate this measure, the individual components of the composite measure, which includes the current 7 approved process measures, will be assessed separately for each patient and then aggregated into one score for each hospice.

While analyses conducted by the CMS measure development contractor, RTI International, indicated that agencies perform well (over 90%) in collecting the 7 process measures, only 68.1% of hospices had documentation to support the collection of all the care processes at admission. Implementing a composite measure is expected to better promote consistent collection of all quality measures.

Hospices that do not collect and submit this data as defined by the program will have a 2% reduction in the market basket update, decreasing overall reimbursement. Failure to collect and report the two new quality measures will begin impacting reimbursement in FY2019.

Collection of the new process measures is proposed to begin no later than April 1, 2017. Public reporting of the current 7 Hospice Quality Measures, along with the use of 5-Star Ratings, is also proposed to be implemented in FY2017. The CMS Hospice Compare website is scheduled to be implemented in spring/summer 2017.

While a new HIS (2.0) will be released in early 2017 to allow collection of the new quality measures, CMS is also considering a hospice patient assessment instrument as a new data collection mechanism. CMS is considering developing a new data collection mechanism for use by hospices. This new data collection instrument would replace the Hospice Item Set and support the implementation and documentation of a comprehensive assessment for all hospice patients. The assessment would capture completion of quality process measures and provide additional clinical data that could support a future payment and quality system, such as a case-mix payment system. The patient assessment data would be collected at admission and discharge from any Medicare-certified hospice provider, as well as other potential follow-up time points (e.g., recertification, hospitalization, resumption of care, etc.).


Payment Rule Update

In addition to the new quality reporting measures, the FY 2017 Hospice Wage Index and Payment Rate Update proposes a 2.0% increase in hospice rates, which consists of a 2.8% market basket index increase, reduced by a 0.5% productivity adjustment and a 0.3% adjustment mandated by the Affordable Care Act (ACA).


Hospice Aggregate Cap

As required by the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act), for accounting years between September 30, 2016 and before October 1, 2025, the hospice Aggregate Cap will be updated by the hospice payment update percentage instead of the consumer price index for urban consumers, as has historically been used to update the CAP amount. Based on this change, the 2016 Cap, which runs from November 1, 2015 through October 31, 2016 will be $27,820.75, and the 2017 Cap, which runs from November 2, 2016 through October 31, 2017 will be $28,377.17.

The formal comment period for the proposed rule ends on June 20, 2016.



While many hospices may consider the quality changes to impose greater expenditures of time and resources, focusing on care processes that have been proven to positively impact outcomes should result in an overall improved patient and caregiver experience and a reduction in the stress associated with the final days of life. Despite these benefits, CMS should take care to ensure that provider burden in measure implementation is appropriately linked to meaningful quality results.

Moving to a system where quality process measures are integrated into the hospice assessment tool will provide more detailed information to support payment than strictly using visit data on hospice claims.