Health Law Daily Hospices to see payment rate increases, rebasing in 2020
Thursday, August 1, 2019

Hospices to see payment rate increases, rebasing in 2020

By Anthony H. Nguyen, J.D.

CMS will also proceed with previously proposed changes to hospice election requirements and quality measure reporting.

Hospices would see an overall $520 million payment rate increase (2.6 percent) for fiscal year (FY) 2020 over FY 2019 rates. This payment rate is a slight decrease from the earlier proposed rule (see $540M payment rate increase, quality measure updates for hospices in FY 2020, April 25, 2019). In addition to updating the hospice payment rates, wage index, and cap amount for fiscal year (FY) 2020, in an advance release of the final rule set to publish in the Federal Register on August 6, 2019, CMS will rebase per diem payment rates for continuous home care, general inpatient care, and inpatient respite care to align these payments rates with a goal of budget-neutrality. Additionally, the hospice election statement requirements will require the entity to include additional information related to coverage transparency for patients electing hospice care. CMS will also undertake additional work on improving the Hospice Quality Reporting Program (HQRP).

FY 2020 payment rates, cap. For FY 2020, hospice payment rates will be updated by $540 million for FY 2020. The payment update is based on a proposed FY 2020 hospital market basket increase of 3.0 percent reduced by the multifactor productivity adjustment of 0.4 percentage point, mandated by the section 3132 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which results in an overall proposed 2.6 percent increase in hospice payment rates for FY 2020. Hospices that fail to meet quality reporting requirements would receive a 2 percentage point reduction to the annual market basket update for the year.

In addition to payment rate increase, CMS set the hospice cap amount for FY 2020 at $29,964.78, which is the FY 2019 cap amount of $29,205.44 updated by the 2.6 percent payment rate increase. The hospice cap is an annual statutory cap limiting the overall payments per patient made to a hospice.

Rebasing. The base payment rates for each level of hospice care was set in 1983 using information from a relatively small set of 26 hospices that were participating in a CMS hospice demonstration. There are four hospice payment categories, distinguished by the location and intensity of the services provided: (1) routine home care (RHC), (2) continuous home care (CHC), (3) inpatient respite care (IRC), and (4) general inpatient care (GIP). Current per diem payment rates for the hospice benefit may not align accurately with the current costs of providing care, especially in light of technological changes to providing hospice care and changes in the patient population using hospices.

The payment rates for CHC, IRC, and GIP are significantly less than the average costs of providing care. CMS compared the FY 2019 average costs for RHC for the first 60 days and any RHC days after day 60 to the FY 2019 payment rates for RHC and the percentage difference between payment and average costs and the results significantly exceeded the average costs of providing care for this level of care for the first 60 days and any RHC days after day 60.

CMS rebased the payment rates for CHC, IRC, and GIP by setting these payment amounts equal to an FY 2019 average costs per day. Under the final rule the payment amounts for (1) CHC would be $56.80 per hour or $1,363.26 per day; (2) IRC would be $437.86 per day; and (3) GIP would be $992.99 per day. In order to rebase CHC, IRC, and GIP levels of care in a budget-neutral manner, RHC payment rates are reduced by 2.72 percent.

Quality reporting. The Hospice Quality Reporting Program (HQRP) was established in FY 2012; there are currently 10 measures in the HQRP. Under the final rule, CMS will continue to collect data on the "Hospice Visits over the Last 7 Days" measure, but not publicly report it. This measure 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. CMS calculates this data from the Hospice Item Set. CMS also noted that it will not publicly report this measure in order to review and determine if changes to the measure specifications or how it is displayed on Hospice Compare website are needed.

Along with reviewing display on Hospice Compare, CMS is currently developing a hospice assessment tool for real-time patient assessments. Named "Hospice Outcomes and Patient Evaluation" (HOPE), the agency believes the tool will help hospice staff better understand the patient’s end of life care needs, provide hospices with important information to address patient and family needs, and ensure delivery of high quality care throughout the patient stay, while minimizing the burden on providers.

Hospice election. In addition to the existing hospice election statement, CMS will require hospices to include: (1) information about the holistic, comprehensive nature of the Medicare hospice benefit; (2) a statement that there could be some necessary items, drugs, or services that is not covered by the hospice because the hospice has determined that these items, drugs, or services are to treat a condition that is unrelated to the terminal illness and related conditions; and (3) information about beneficiary cost-sharing.

Upon request, hospices must provide an election statement addendum with a list and basis for items, drugs, and services that the hospice has deemed to be unrelated to the patient’s terminal illness and related conditions. The request can be made by the beneficiary, other providers treating the patient, and Medicare contractors.

Wage index timing. CMS will use the inpatient hospital PPS (IPPS) wage index for the hospice wage index. Currently, CMS calculates the hospice wage index using the previous year’s pre-floor, pre-reclassified hospital wage index data. Under the final rule, CMS would use the IPPS FY 2020 pre-floor, pre-reclassified hospital wage index.

MainStory: TopStory NewsStory AgencyNews ReimbursementNews CMSNews HospiceNews PartANews PartBNews ProviderNews QualityNews

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