NAHC Develops Recommendations for Hospital-based Hospice Cost Report Revisions
Stakeholders encouraged to comment by April 7
April 2, 2015 09:09 AM
On February 6, 2015, the Centers for Medicare & Medicaid Services (CMS) published notice requesting comment on significant proposed revisions to the Hospital and Hospital Health Care Complex Cost Report that incorporate changes previously made to the Hospice Cost Report for freestanding agencies (for previous NAHC Report coverage go here and here). CMS posted the forms, instructions and related materials three weeks later to its Paperwork Reduction Act (PRA) website. PRA items must go through two comment periods (one for 60 days and a second for 30 days) prior to being finalized. The Feb. 6 notice represents the first request for comment, and comments are due next Tuesday (April 7, 2015).
The freestanding hospice cost report revisions that went into effect for cost reporting years beginning on or after October 1, 2014, underwent the same comment process. In response to industry input, CMS made considerable changes to the freestanding cost report forms and instructions but did not address a number of issues that stakeholders believe are important to ensure that the cost report accurately reflects hospice financial operations or provide greater clarity relative to specific cost report items. In draft comments on the hospital-based hospice cost report revisions, the National Association for Home Care & Hospice (NAHC) has identified several key areas that it believes CMS must correct as part of the hospital-based hospice cost report, and NAHC is urging that CMS make plans at this time to also make these corrections to the freestanding hospice cost report. NAHC also references additional clarifications and corrections that were suggested during previous hospice cost report comment opportunities that, if adopted, would significantly improve understanding of the cost reporting process and the principles that underlie it, and recommends that CMS also consider making those changes at this time.
Following is an excerpt from the draft comments NAHC has prepared for submission to CMS on the hospital-based hospice cost report revisions:
Effective Date. Based on input we have sought from hospital-based hospice providers, they are not currently set up to meet the terms of the proposed changes, and most certainly cannot effect the needed changes retroactive to October 1, 2014, the proposed effective date. All hospices need about one year’s time to adapt to the cost reporting changes; the one-year clock should start with final release of changes to the cost reporting forms and instructions. Therefore, we strongly urge that CMS revise the October 1, 2014, effective date and set the effective date on a prospective basis such that hospital-based organizations have one year following final release of the changes to comply.
Estimate of Burden. The estimate of increased burden supplied by CMS as part of the Supporting Statement for Form CMS-2552-10 aggregates the financial impact of the changes related to hospices and federally-qualified health centers. Failure to supply hospice-specific (or FQHC-specific) impact data makes it impossible to comment on the accuracy and adequacy of CMS’ increased burden estimate. We recommend that CMS provide separate breakdowns of the estimated increased financial burden for hospital-based hospices and FQHCs so that CMS’ burden estimate of the changes can be assessed.
Calculation of Average Length of Stay (ALOS). We recommend that CMS restore the ALOS statistics as part of the cost report (for both freestanding and hospital-based organizations) but base the statistic on patients discharged during the cost reporting year. Further, rather than allow for the cost reporting software to calculate the statistic, the instructions should direct the hospice to calculate its own ALOS rate and provide clear instruction for doing so.
Cost Centers. The revisions to the hospice cost report significantly expand the general service cost centers. However, we have the following specific concerns related to these changes:
Pharmacy: Pharmacy costs are directly related to delivery of patient care and therefore should NOT be classified as a General Service Cost Center. These are most appropriately considered Direct Patient Care costs, from which hospices should be permitted to accurately identify in the accounting records or reclassify costs by level of care based on patient charges or other appropriate statistical basis.
Capital Related Costs/ Movable Equipment: For Capital Related Costs/Movable Equipment, in both the final freestanding cost report and as part of the proposed hospital-based hospice cost report CMS has specified use of dollar value as the exclusive method for allocation of these costs unless the hospice is able, in advance of the end of the cost reporting year, to get permission from its assigned Medicare Administrative Contractor (MAC) to use an alternative statistic. However, unless the hospice secures permission to use an alternative statistic in advance of the cost reporting year’s start, it must gather statistics according to the cost report-specified statistic. Given that CMS previously allowed use of either dollar value or square feet for Capital Related Costs/Movable Equipment, we strongly urge that CMS revert to these same options.
Volunteer, Plant Operations and Maintenance, and Staff Transportation: These Cost Centers should be listed PRIOR to the Administrative & General Cost Center to allow for allocation of these costs to the Administrative & General cost center. The rationale is that volunteers perform administrative work, space occupancy costs of administrative offices (the majority of providers do NOT operate a “facility”) must be reclassified to Administrative & General under the existing methodology in place for freestanding providers, and administrative staff incur travel expenses.
Housekeeping: It would be helpful if CMS could clarify the purpose of this cost center as it is not clear whether this cost center is expected to include housekeeping related to a hospice’s facility (if it has one) and/or housekeeping or cleaning of administrative office space. Administrative office space cleaning may be most appropriately entered on the line for Plant Operations and Maintenance (which, as recommended earlier, should be placed above the A & G Cost Center), and CMS could provide clarification that the Housekeeping cost center is appropriate for facility housekeeping costs only.
Nursing Facility Room & Board: As has been noted in comments on the freestanding hospice cost report revisions, NF Room & Board should not be treated as “pass through” transactions; regardless, we encourage CMS to adapt the treatment of NF Room & Board to ensure that no administrative costs are allocated to this category.
NAHC urges stakeholders -- particularly hospital-based hospice organizations -- to comment on issues of concern relative to the proposed cost report revisions. Of particular concern for most organizations should be the retroactive effective date (for cost reporting years beginning on or after October 1, 2014) of the proposed changes. Instructions for comment are available at the following location: