Health Reform WK-EDGE Hospices would receive $580M more in FY 2021 payments
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Tuesday, April 21, 2020

Hospices would receive $580M more in FY 2021 payments

By Anthony H. Nguyen, J.D.

CMS proposes hospice payment rate and wage index updates for 2021.

CMS has proposed updated fiscal year (FY) 2021 Medicare payment rates and wage index for hospices serving Medicare beneficiaries. CMS noted that the entire healthcare system is focused on responding to the novel coronavirus 2019 (COVID-19) public health emergency. As a result, the proposed rule includes proposals required by statute and that affect Medicare payment to hospices, as well as proposals that reduce provider burden and may help providers in the COVID-19 response. Public comments on the proposal will be accepted until June 9, 2020 (Proposed rule, 85 FR 20949, April 15, 2020).

Payment rate updates. Hospices would see a 2.6 percent ($580 million) increase in their payments for FY 2021. The proposed 2.6 percent hospice payment update for FY 2021 is based on an estimated 3.0 percent inpatient hospital market basket update reduced by the multifactor productivity adjustment of 0.4 percentage points. Hospices that fail to meet quality reporting requirements would receive a 2 percentage point reduction to the annual market basket update for the year.

The hospice payment system also includes a statutory aggregate cap, which limits the overall payments per patient made to a hospice annually. Under the FY 2021 proposal, the hospice cap amount for the FY 2021 cap year is $30,743.86, which is equal to the FY 2020 cap amount of $29,964.78 updated by the proposed FY 2021 hospice payment update percentage of 2.6 percent.

Wage levels. Under Soc. Sec. Act §1888(e)(4)(G)(ii), federal rates are adjusted to account for differences in area wage levels. CMS proposed to adopt revised geographic delineations provided by the Office of Management and Budget, which are used to identify a beneficiary’s location to calculate the wage index. Specifically, for FY 2021 as a transition, CMS proposed a 5 percent cap on any decrease in a geographic area’s wage index value from the wage index value from the prior FY. CMS noted that a 5 percent cap on the overall decrease in a geographic area’s wage index value would be appropriate for FY 2021, as it provides predictability in payment levels from FY 2020 to the upcoming FY 2021 and additional transparency because it is administratively simpler than the previous year’s 50/50 blended wage index approach.

Hospice election statements. In the FY 2020 Hospice final rule (84 FR 38484), CMS finalized modifications to the hospice election statement content requirements at 42 C.F.R. §418.24(b) to increase coverage transparency for patients under a hospice election. As such, the election statement modifications and the election statement addendum requirements will be effective for hospice elections beginning on and after October 1, 2020. CMS declined to propose any additional changes to the policies finalized in the FY 2020 final rule regarding the election statement content modifications or the requirements for the election statement addendum as set forth at § 418.24.

FederalRegisterIssuances: ProposedRules AccessNews AgencyNews HospiceNews MedicarePartANews ProviderPaymentNews QualityNews NewsFeed

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