Hospice Payments Proposed at $540 Million for FY 2020

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Original story posted on: April 29, 2019

The Medicare Hospice Benefit proposed rule includes payment rates, wage index, and cap amount. 

The Centers for Medicare & Medicaid Services (CMS) is proposing to increase hospice payments to $540 million in the 2020 fiscal year, an increase of 2.7 percent.

CMS said the rate is based on the proposed FY 2020 hospital market basket increase of 3.2 percent, reduced by the multifactor productivity adjustment of 0.5 percent. In its announcement on the subject, CMS went on to report that hospices that fail to meet quality reporting requirements will receive a 2-percentage point reduction to the annual market basket update for the year.

To increase payment accuracy, CMS is proposing to use the concurrent Inpatient Prospective Payment System (IPPS) wage index for the hospice wage index to align data across all settings. CMS said it calculates the hospice wage index using the previous year’s pre-floor, pre-reclassified hospital wage index data. 

CMS also noted that the hospice payment system includes a statutory aggregate cap that limits the overall payments per patient made to a hospice annually. The proposed hospice cap amount for the FY 2020 cap year will be $29,993.99, which is equal to the FY 2019 cap amount ($29,205.44) updated by the proposed FY 2020 hospice payment update percentage of 2.7 percent.

The continuous home care (CHC), general inpatient care (GIP), and inpatient respite care (IRC) per diem payment rates will also be rebased via the proposal. This effort, according to CMS, would align Medicare payments with the costs of providing care more accurately.

CMS is also proposing in its rule to modify the election statement requirements mandating that each hospice include additional information aimed at “increasing coverage transparency for patients (who) elect hospice.”

According to the proposed rule, “hospices would be required to provide, upon request, an election statement addendum with a list and rationale for items, drugs, and services that the hospice has determined to be unrelated to the terminal illness and related conditions to the beneficiary (or representative), other providers that are treating such conditions, and to Medicare contractors.” CMS also said that having information and education would empower patients to make an informed decision when deciding to elect hospice care.

CMS also is soliciting comments on the interaction of the hospice benefit and various alternative care delivery models, and the agency said it would continue its work to modernize and strengthen Medicare operations through proposals to the Hospice Quality Reporting Program (HQRP).

Established in FY 2012, the Hospice QRP has 10 measures currently adopted. In the FY 2020 proposed rule, CMS said it proposes to continue data collection on the measure “Hospice Visits over the Last 7 Days,” one of the companion measures in the “Hospice Visits When Death Is Imminent” measure pair. However, the agency said it does not propose not to publicly report this measure at this time, being as it identifies if hospice patients received at least one hospice visit from a medical social worker, chaplain or spiritual counselor, licensed practical nurse, or aide during their final seven days of life (this is calculated using data from the Hospice Item Set). 

Finally, CMS is soliciting comments on the interaction of the hospice benefit and various alternative care delivery models, including Medicare Advantage (MA), Accountable Care Organizations (ACOs), and other future models designed to change the incentives inherent for providing care under traditional fee-for-service (FFS) Medicare.


Programming Note:

Listen to Talk Ten Tuesday today for complete coverage of the 2020 proposed IPPS rule.

June 18, 2019 is the deadline for submitting comments on the proposed rule, which can be downloaded from the Federal Register at: https://www.federalregister.gov/documents/2019/04/25/2019-08143/medicare-program-fiscal-year-2020-hospice-wage-index-and-payment-rate-update-and-hospice-quality

Chuck Buck

Chuck Buck is the publisher of ICD10monitor and is the executive producer and program host of Talk Ten Tuesdays.

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