On July 10, 2023, the Centers for Medicare & Medicaid Services (“CMS”) published a proposed rule (“Proposed Rule”) that would create an informal dispute resolution process for some hospice citations, begin the hospice special focus program and create additional restrictions and steps for certain transfers of hospice ownership interests.
Proposed Informal Dispute Resolution Program
In the Proposed Rule, CMS proposes to add 42 CFR § 488.1130 to create the hospice Informal Dispute Resolution (“IDR”) process to address disputes related to condition-level survey findings following a hospice program’s receipt of the official survey Statement of Deficiencies and Plan of Correction, Form CMS-2567. Standard-level findings alone do not trigger an enforcement action and are not accompanied by appeal and hearing rights.
The proposed IDR for hospices would be similar to the process already in place for home health agencies.
The proposed IDR may be initiated for programs under State Service Agency (“SA”) monitoring (either through a complaint investigation or validation survey) and those in the proposed special focus program (“SFP”). For hospice programs deemed through a CMS-approved Accrediting Organization (“AO”), the AO would receive the IDR request from their deemed facility program, following the same process and coordinating with CMS regarding any enforcement actions.
If a deemed hospice fails to meet the Medicare requirements or shows continued condition-level noncompliance, deemed status is generally removed and oversight is placed under the SA. The proposed IDR process may not be used to refute an enforcement action or selection into the Special Focus Program.
CMS proposes that if any survey findings are revised or removed by the State or CMS based on IDR and if CMS accepts the IDR results, the CMS2567 would be revised accordingly. If CMS accepts the IDR results and the revised Form CMS-2567, then CMS would adjust any enforcement actions imposed solely due to those cited and revised deficiencies. If the survey findings are upheld by CMS or the state following IDR, the Form CMS-2567 would not be revised based on the IDR and there would not be adjustments to the enforcement actions.
Proposed Start of Hospice Special Focus Facility Program (“SFP”)
The Consolidated Appropriations Act of 2021 called for CMS to create and implement a SFP for poor-performing hospices that includes using a data-driven algorithm to identify indicators of poor hospice performance, the criteria for selection and completion of the SFP, hospice termination from Medicare and public reporting of the SFP.
The Proposed Rule adds 42 CFR § 488.1135 and creates the SFP for hospice providers. Selected hospices either successfully complete the SFP program or are terminated from the Medicare program.
CMS proposes the hospice SFP begin on the effective date of the final rule when it is when published. CMS’ goal is to select SFP hospices starting in 2024.
Selection Approach
In establishing the proposed SFP, CMS examined the Special Focus Facility program for nursing homes and its methodology for facility selection.
CMS proposes to identify a subset of 10% of hospice programs based on the highest aggregate scores determined by the algorithm and select that group for the SFP.
To identify poor hospice performance, CMS has identified several indicators:
- survey reports with Condition-Level Deficiencies (“CLDs”) in any of the 11 quality-of-care conditions. CMS specifically chose not to include all 23 Conditions of Participation because it would “dilute the methodology’s ability to identify quality concerns”; and
- complaints with substantiated allegations and CMS Medicare data sources from the Hospice Quality Reporting Program. However, CMS noted that for one data source, only 49.3% of hospice providers reported data. These indicators have been integrated into the proposed SFP algorithm to assist in identifying potential hospice providers for the SFP.
The compilation of these data sources illustrates areas of CMS concern –
- validated/identified issues based on in-person/on-site review of a hospice to meet Medicare requirements;
- caregiver and public complaints about hospices not providing quality care or not meeting Medicare requirements, and
- quality measures that inform the public of whether a hospice is providing expected care processes or outcomes.
CMS proposes adding 42 CFR § 488.1135(b) that provides that hospices with AO deemed status that are placed in the SFP would not retain deemed status and would be placed under CMS or, as needed, SA oversight jurisdiction until completion of the SFP or termination. The number of hospices selected to participate in the SFP would be determined in the first quarter of each calendar year.
Graduation from SFP
CMS proposes adding 42 CFR § 488.1135(d), which provides that a hospice will have completed the SFP if it has in an 18-month timeframe, no CLDs cited or immediate jeopardies for any two (2) six (6) month SFP surveys and has no pending complaint survey triaged at an immediate jeopardy or condition level or has returned to substantial compliance with all requirements. If there are any complaint investigations or a 36-month recertification survey for a hospice while in the SFP, the SFP timeline may extend beyond the 18-month timeframe.
After completing the SFP, hospice programs would receive a one-year post-SFP survey and then would start a new standard 36-month survey cycle.
Termination
A hospice in the SFP that fails any two SFP surveys, by having any CLDs on the surveys, in an 18-month period, or pending complaint investigations triaged at IJ or condition-level, would be considered for termination from the Medicare program as proposed at new 42 CFR § 488.1135(e).
Public Reporting
CMS proposes adding 42 CFR § 488.1135(f) to call for it to publicly report, at least on an annual basis, the hospice programs selected for the SFP. Initially, this information would be posted on a CMS public-facing website or a successor website.
The website would include, at a minimum, general information, program guidance, a subset consisting of ten percent of hospice programs based on the highest aggregate scores determined by the algorithm and SFP selections from the 10% subset as determined by CMS.
Proposed Restrictions on Changes of Ownership
CMS has become increasingly concerned about program integrity issues within the hospice community. CMS has seen hundreds of hospice ownership changes since 2018, for which CMS may not know whether the facility under its new ownership and leadership is compliant with the hospice regulatory requirements for participation.
CMS believes that additional provider enrollment measures are necessary to help address these concerns. CMS proposes to implement two (2) new program integrity measures: (1) subjecting a greater number of providers and suppliers, such as hospices, to the highest level of screening, which includes fingerprinting all five percent or greater owners of these providers and suppliers; and (2) applying the change in majority ownership (“CIMO”) provisions in 42 CFR § 424.550(b) to hospices. Hospice providers should take notice of CMS’ increasing concerns about program integrity issues in hospice. This trend has been increasing in recent years and will likely continue to impact the industry.
Fingerprints for a Criminal Background Check
CMS proposes to revise 42 CFR § 424.518 to move initially enrolling hospices and those submitting applications to report any new owner into the “high” level of categorical screening; revalidating hospices would be subject to moderate risk-level screening. This requires that all hospice owners with 5% or greater direct or indirect ownership to submit fingerprints for a criminal background check would help CMS detect parties potentially posing a risk of fraud, waste, or abuse before it begins.
36-Month Rule Transfer Restriction
CMS proposes to expand the scope of 42 CFR § 424.550(b)(1) from home health agencies to add hospice changes in majority ownership (“CIMOs”) within its coverage.
Currently, Section 424.550(b)(1) states if a home health agency (“HHA”) undergoes a CIMO within 36 months after the effective date of the HHA’s initial enrollment in Medicare or within 36 months after the HHA’s most recent CIMO, the provider agreement and Medicare billing privileges do not convey to the HHA’s new owner, unless an exception applies. The prospective provider/owner of the HHA must instead: (1) enroll in Medicare as a new HHA; and (2) obtain a state survey or accreditation from an approved accreditation organization. As defined in 42 CFR § 424.502, a CIMO occurs when an individual or organization acquires more than a 50% direct ownership interest in an HHA during the 36 months following the HHA’s initial enrollment or most recent CIMO; this includes an acquisition of majority ownership through the cumulative effect of asset sales, stock transfers, consolidations, or mergers. Under 42 CFR § 424.550(b)(1), neither a 100% ownership transfer nor a change that qualifies as a CHOW under 42 C.F.R. 489.18 (the traditional definitions of CHOW) is necessary to trigger this “36-month rule.” Any transaction within the 36-month window that either individually or when considered with other incremental transactions during that period, resulted in crossing the 50% ownership threshold is required.
Providing Comments/Practical Takeaways
Hospice providers should review the Proposed Rule’s changes to determine the potential impact on their operation and determine whether to submit a comment to support, question, clarify or challenge an of the proposed changes. Comments are due by 11:59 PM ET on August 29, 2023, and should be identified by CMS–1780-P and submitted via the Federal eRulemaking Portal, regular, express, or overnight mail, hand delivery, or courier to the addresses and following the instructions based on the delivery type provided in the Proposed Rule.
If you have any questions, would like assistance preparing public comments, or would like additional information about this topic, please contact:
- Sean Fahey at sfahey@hallrender.com or (317) 977-1472;
- Robert W. Markette, Jr., CHC at rmarkette@hallrender.com or (317) 977-1454;
- Brian Jent at bjent@hallrender.com or (317) 977-1402;
- Todd Selby at tselby@hallrender.com or (317) 977-1440; or
- Your regular Hall Render attorney.
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