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Comment Letter | Medicare Payment and Reimbursement

HFMA Comments on the CMS Discharge Planning Proposed Rule

Comment Letter | Medicare Payment and Reimbursement

HFMA Comments on the CMS Discharge Planning Proposed Rule

HFMA comments on the CMS proposed rule on Medicare and Medicaid Programs: Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies.

January 4, 2016
Andrew Slavitt
Acting Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-3317-P
P.O. Box 8016
Baltimore, MD 21244-8016  

File Code: CMS–3317-P  

Re:  Medicare and Medicaid Programs: Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies  

Dear Mr. Slavitt:  

The Healthcare Financial Management Association (HFMA) would like to thank the Centers for Medicare & Medicaid Services (CMS) for the opportunity to comment on Medicare and Medicaid Programs: Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies (hereafter referred to as the Proposed Rule) published in the Nov. 3, 2015 Federal Register.   

HFMA is a professional organization of more than 40,000 individuals involved in various aspects of healthcare financial management. HFMA is committed to helping its members improve the management of and compliance with the numerous rules and regulations that govern the industry.  


HFMA would like to commend CMS for its thorough analysis and discussion of a number of issues related to discharge planning.  In an effort to reduce readmissions and unnecessary outpatient utilization, our members’ hospitals have focused on improving discharge planning and patient communications. Given our members’ experience with this work, HFMA would like to comment on the proposals related to:  

  1. Definition of “Consider” in the Proposed Rule
  2. Impact on Timing of Patient Discharges
  3. Patient’s or Caregiver’s Capabilities to Provide Follow-up Care
  4. Use of Telehealth for Follow-up Care
  5. Review of Selected Readmitted Cases
  6. Cost Estimates for Implementation of Proposed Rule

Definition of "Consider" in the Proposed Rule

The proposed rule uses the word “consider” multiple times. Below are several examples of how it is used:

We propose to re-designate §482.43(b)(4) as §482.43(c)(5) to require, that as part of identifying the patient’s discharge needs, the hospital consider (emphasis added) the availability of caregivers and community-based care for each patient, whether through self-care, follow-up care from a community-based providers, care from a caregiver/support person(s), care from post-acute health care facilities or, in the case of a patient admitted from a long-term care or other residential care facility, care in that setting.  

The proposed requirement at §482.43(c)(5) would require hospitals to consider (emphasis added) the patient’s or caregiver’s capability and availability to provide the necessary post-hospital care. As part of the ongoing discharge planning process, hospitals would identify areas where the patient or caregiver/support person(s) would need assistance, and address those needs in the discharge plan in a way that takes into account the patient’s goals and preferences. In addition, we encourage hospitals to consider (emphasis added) potential technological tools or methods, such as telehealth, to support the individual’s health upon discharge.  

We propose that hospitals consider (emphasis added) the availability of and access to non-health care services for patients, which may include home and physical environment modifications including assistive technologies, transportation services, meal services or household services (or both), including housing for homeless patients. These services may not be traditional health care services, but they may be essential to the patient’s ongoing care post-discharge and ability to live in the community. Hospitals should be able to provide additional information on non-health care resources and social services to patients and their caregiver/support person(s) and they should be knowledgeable about the availability of these resources in their community, when applicable. In addition, we encourage hospitals to consider (emphasis added) the availability of supportive housing, as an alternative to homeless shelters that can facilitate continuity of care for patients in need of housing.  

Generally, HFMA’s members request that CMS:

  1. Clarify what CMS means by its use of "consider" in each of the examples above.
  2. Based on its clarified definition, CMS needs to describe how it expects hospitals, SNFs, and home health agencies to document that they have met the requirement to "consider" the various items contemplated in the proposed rule.
  3. Confirm that CMS’s use of “consider” implies a reasonable effort to arrange for a service as opposed to a specific responsibility to ensure that a service is provided to the beneficiary.
  4. Provide examples of how hospitals should document that they have fulfilled their requirement to "consider" things like the availability of caregivers, patient’s and caregiver's capabilities, and access to non-healthcare services.

Impact on Timing of Patient Discharges

The proposed rule would require that the discharge planning process apply to all inpatients, as well as certain categories of outpatients, including, but  not limited to patients receiving observation services, patients who are undergoing surgery or other same-day procedures where anesthesia or moderate
sedation is used, emergency department patients who have been identified by a practitioner as needing a discharge plan, and any other category of outpatient as recommended by the medical staff, approved by the governing body, and specified in the hospital’s discharge planning policies and procedures. 

While HFMA generally supports the intent of this proposed requirement, we are greatly concerned about the significant incremental cost (discussed in detail in the section on cost estimates) that hospitals will bear in complying with this requirement.  Further, for emergency department patients, HFMA is concerned that meeting the requirements as proposed could result in a significant delay in discharging patients. The proposed rule requires that hospitals “consider the availability of and access to non-health care services for patients.” Many of the community services that hospitals would need to coordinate with or refer the patient to be only available during working hours due to limited resources. This is particularly true in rural communities where beyond resources, there is a limited pool of staff to provide 24/7 support. 

This delay will have three negative outcomes for both hospitals and patients:   

  1. Increased costs for hospitals as they will need to develop strategies to "board" patients who are medically clear to leave but awaiting a discharge plan.
  2. Increased frequency of high-volume emergency departments being placed on "diversion" as treatment space is occupied by patients who are medically cleared to leave but awaiting a discharge plan.
  3. Increased number of patients who leave against medical advice as they refuse to wait for a discharge plan. 

HFMA requests that CMS clarify its expectations as to what hospitals should do if the organizations providing non-healthcare services required for a patient are not available for consultation during the patient’s stay or when he or she is ready to be discharged. If CMS expects that these services will be included in a discharge plan for patients who are discharged from the hospital during non-business hours, CMS will need to provide funding to community organizations to create stand-by capacity during non-business hours. 

Patient’s or Caregiver’s Capabilities to Provide Follow-up Care

CMS proposes that "as part of the ongoing discharge planning process, hospitals would identify areas where the patient or caregiver/support person(s) would need assistance, and address (emphasis added) those needs in the discharge plan in a way that takes into account the patient’s goals and preferences.”

HFMA asks CMS to clarify its expectation of what hospitals must do to satisfy the requirement to “address those needs in a discharge plan.” Specifically, we hear from members that in many instances a patient (or their caregiver) is unable to provide the necessary follow-up care in the home setting. However, the patient refuses post-acute care despite an obvious need. Reasons commonly cited by our members include 1) concerns about cost (even for those with health insurance); 2) loss of autonomy (particularly for patients referred to skilled nursing facilities); and 3) concerns about privacy (for patients referred to home health care). In instances where the patient declines post-acute care, does this need to be documented, and if so, how? 

In instances where the patient is uninsured (or underinsured) and lacks the means to access needed assistance, hospitals have traditionally worked to connect the patient to organizations that will provide the needed services on a discounted basis. However, if such an organization is not available, is it sufficient that the hospital develop a discharge plan that would address these issues as if the patient could afford them, or is CMS’s expectation that the hospital will arrange for these services to be provided without cost to the patient? 

As discussed above, cost continues to be a barrier to accessing the necessary post-acute resources. Given the shift to longer outpatient observation stays, HFMA continues to recommend that CMS waive the inpatient "three-day stay" rule to allow Medicare beneficiaries who are admitted under "observation status" access to their SNF benefit.  

Finally, our members believe that CMS should change its coverage policy to allow for one post-discharge home health visit within 48 hours of discharge, regardless of the patient’s "homebound" status. Beyond a general evaluation of how the patient is doing, they believe that this will allow them to complete a thorough medication reconciliation.  Our members’ experience has shown the accuracy of a medication reconciliation – particularly one that includes over the counter medicines as contemplated in the proposed rule – increases significantly when it is done in the home. We frequently hear that most medication reconciliations that occur outside of the home for inpatient stays miss important medications because the patient didn’t recall them or bring them to the hospital as instructed. The opportunity for error increases significantly as this process is expanded to outpatient settings like the emergency department. In this setting, patients (or the patients’ caregivers) will not have time to gather all of the patient’s medications prior to arriving at the emergency department. Further, a covered home visit will provide the opportunity to reinforce education about the patient’s specific conditions, answer any questions the patient has about his or her care plan, and ensure that the patient has the necessary follow-up appointments scheduled (or completed). 

Use of Telehealth for Follow-up Care

In the rule, CMS encourages hospitals to "consider potential technological tools or methods, such as telehealth, to support the individual’s health upon discharge." HFMA’s members fully support the use of telehealth and other virtual methods to monitor patients and provide low-intensity follow-up care. One of the barriers to greater adoption of these tools has been the cost to implement these programs and limited circumstances under which CMS (and other payers) will reimburse these valuable services. 

HFMA strongly recommends that CMS cover and reimburse telehealth monitoring services for 30 days post discharge for patients who have been recently discharged from an inpatient unit (including for observation services), the emergency department, or for same-day surgeries. The level of reimbursement should be sufficient to cover the direct and indirect cost of providing telehealth services. 

Ongoing Assessment of Discharge Planning Process

The rule proposes that hospitals assess their discharge planning process. The assessment must include ongoing, periodic review of a representative sample of discharge plans, including those patients who were readmitted within 30 days of a previous admission to ensure that they are responsive to patient discharge needs. 

HFMA fully supports this requirement. We believe that reviewing discharge plans from readmitted patients is a necessary step in identifying opportunities for improving the discharge planning process and reducing readmissions. However, we’d like to remind CMS that not all patients who are readmitted are readmitted to the hospital from which they are initially discharged. While we realize that this information is eventually provided to hospitals as part of the Hospital Readmissions Reduction Program, it is made available to hospitals through their Quality Net accounts many months after the fact. Therefore, to expedite the improvement process, HFMA asks that CMS notify hospitals on a monthly basis of their readmissions to other facilities. 

Cost Estimates for Implementation of Proposed Rule

CMS estimates that on an ongoing basis it will cost hospitals (on average) approximately $21,900 ($107,000,000/4,900 hospitals) per hospital to implement the proposed rule. CMS arrives at this number by assuming that only 5 percent of emergency department, outpatient visit, ambulatory surgery, and observation patients will require a discharge plan. For those that do require a discharge plan, the average, fully loaded staffing cost will be $99, and it will require .083 hours (approximately five minutes) for staff to complete the discharge plan. 

While our members are unable to validate CMS’s estimate that only 5 percent of the patient population will require a discharge plan, we are deeply concerned with its estimate of the time required to create a discharge plan such as the one envisioned in the proposed rule. Based on our members’ experience, on average it requires 45 minutes to create a discharge plan. Inserting this estimate of time into CMS’s estimate yields a cost of approximately $965 million or $200,000 per hospital (13,000,000 patients x $99 per hour fully loaded staffing cost x .75 hours = $965 million).

Assuming that CMS’s estimate of volume is remotely accurate, its estimation of cost imposed on hospitals under this proposed regulation is off by a factor of nine. Given that Medicare payment for outpatient services doesn't come close to covering the cost to provide services (-12.4 percent margin in 2013)1, we ask that if CMS finalizes this proposed rule, they increase OPPS payments to cover the costs of this new mandate. 

HFMA looks forward to any opportunity to provide assistance or comments to support CMS's efforts to refine and improve the Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies. As an organization, we take pride in our long history of providing balanced, objective financial technical expertise to Congress, CMS, and advisory groups.

We are at your service to help CMS gain a balanced perspective on this complex issue. If you have additional questions, you may reach me or Richard Gundling, Senior Vice President of HFMA's Washington, D.C., office, at (202) 296-2920. The Association and I look forward to working with you. 


Joseph J. Fifer, FHFMA, CPA
President and Chief Executive Officer
Healthcare Financial Management Association

1  MedPAC, March 2015 Report to Congress: Medicare Payment Policy, p. 62

About HFMA

HFMA is the nation's leading membership organization for more than 40,000 healthcare financial management professionals. Our members are widely diverse, employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant. 

HFMA is a nonpartisan professional practice organization. As part of its education, information, and professional development services, HFMA develops and promotes ethical, high-quality healthcare finance practices. HFMA works with a broad cross-section of stakeholders to improve the healthcare industry by identifying and bridging gaps in knowledge, best practices, and standards.

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