May 25, 2010

Proposed Hospice Wage Index for Fiscal Year 2009

Proposed Rule
Summary

Score: 16 / 60

Key materials
Additional details
Agency
Department of Health and Human Services
Regulatory Identification Number
0938-AP14
Agency Name
Department of Health and Human Services
Rule Publication Date
05/01/2008

RULE SUMMARY

This proposed rule establishes the hospice wage index for fiscal year 2009. This proposed rule also phases out the Medicare hospice budget neutrality adjustment factor and clarify two wage index issues, pertaining to the definition of rural and urban areas and to multi-campus hospital facilities.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
The link to proposed rule containing the RIA is 5 clicks from the home page. Click on "regulations" (intuitive). The rest is unintuitive: click on "other regulations," expand the "detail" list, click on "CMS regulations," and then click on "quarterly provider updates—regulations" and select the update list from the period covering the date of the regulation. Can be found on regulations.gov using RIN and using the title as keywords.
4/5
2. How verifiable are the data used in the analysis?
Very little data are explicitly sourced. Wage indexes for geographical areas are presented in appendices, but it is not clear how an external observer would verify them.
1/5
3. How verifiable are the models and assumptions used in the analysis?
This regulation is about a change in payment rate structure for hospice care; there isn't really a model beyond creating a wage index and meshing that with a payment structure. The analysis uses Medicare wage indices and payments to hospices from a past year to estimate future payments. This presumes the case load next year is similar to case load in year used for data. There is no analysis of behavioral changes that would involve more complicated models. The reader must presume that HHS's hospital Medicare wage indices are accurate. "Market basket" adjustment is to come later.
2/5
4. Was the analysis comprehensible to an informed layperson?
The analysis is readable, but that's because it basically just describes tabular results. Thorough understanding requires the reader to have some familiarity/expertise with this program and with Medicare generally.
2/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
0/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
The analysis simply estimates changes in payments to hospices. There is no discussion of outcomes these payments are supposed to produce.
0/5
Does the analysis identify how these outcomes are to be measured?
The analysis does not address this topic.
0/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The analysis does not address this topic.
0/5
Does the analysis present credible empirical support for the theory?
The analysis does not address this topic.
0/5
Does the analysis adequately assess uncertainty about the outcomes?
The analysis does not address this topic.
0/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
1/5
Does the analysis identify a market failure or other systemic problem?
The analysis does not present the definition of problem. However, the rule asserts that certain adjustments in the past that increased payments to hospices are now no longer justified.
2/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
The text of the rule explains problem above.
2/5
Does the analysis present credible empirical support for the theory?
The text of the rule presents evidence that hospice industry has continued to grow substantially, suggesting that lower payments would not be a hardship or deprive patients of access to care.
1/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
1/5
Does the analysis enumerate other alternatives to address the problem?
The analysis does not address this topic.
0/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
The analysis does not address this topic.
0/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
The analysis does not address this topic.
0/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
The analysis compares estimated payments in FY 2009 with regulatory changes to estimated payments in FY 2008 without regulatory changes. It does not explain why the latter is a good baseline.
2/5
8. How well does the analysis assess costs and benefits?
1/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
The analysis calculates change in federal payments to hospices as a result of the only option apparently considered.
3/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
The analysis identifies all federal expenditures. It does not consider whether there will be effects on expenditures by providers or patients.
3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
It only does to the extent that this regulation sets the prices Medicare will pay for services.
1/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
The analysis does not address this topic.
0/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
The analysis does not address this topic.
0/5
Does the analysis identify the alternative that maximizes net benefits?
Since the analysis does not measure benefits, this is not possible.
0/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Since the analysis does not measure benefits, this is not possible.
0/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
It assesses effects of changes in spending on hospices, broken down by location, urban/rural, size, type of ownership, etc.
3/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
The analysis does not address this topic.
0/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
Very indirectly; one regulatory change will save the federal government $100 million, and it is plausible that HHS would not have pursued this change if it did not know the savings would be this big.
2/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Since the RIA only examines direct federal expenditures, there is no way to calculate net benefits.
0/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
No explicit goals are mentioned; costs could be monitored.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
The analysis includes cost data only.
1/5
 
Total 16 / 60