CMS Proposes to Bump Hospice Medicare Payments Up $230 Million for 2015

Hospices serving Medicare beneficiaries may see a $230 million, or 1.3%, payment increase in their reimbursements for fiscal year 2015, according to a recent proposal from the Centers for Medicare & Medicaid Services (CMS).

On May 2, CMS proposed an update to the wage index and payment rates for the Medicare Hospice Benefit. 

The payment increase of 1.3% would be the net result of a proposed hospice payment update to the hospice per diem rates of 2% and a 0.7% decrease in payments to hospices—as a result of updated wage data and the sixth year of CMS’s seven-year phase-out of its wage index budget neutrality adjustment factor (BNAF).


The updated rule also includes clarifications for terminal illness and related conditions.

Under the Medicare hospice benefit, it is required that the hospice physician and the patient’s attending physician, if any, certify that the patient has a medical prognosis with a life expectancy of six months or less if the terminal illness runs its course.

Whereas in previous rules CMS has reiterated that all diagnosis codes contributing to the prognosis should be reported on the hospice claim, coding practices continue to show that hospices are primarily focused on one diagnosis code on the hospice claim. 


“We have also received numerous inquiries that indicate providers need formal definitions for the terms ‘terminal illness’ and ‘related conditions,'” CMS stated. “Therefore, we are soliciting comments on possible definitions of ‘terminal illness’ and ‘related conditions.'”

The proposal also calls for hospice provides to begin using a Hospice Experience of Care Survey for informal caregivers of hospice patients surveyed in 2015. For this requirement, CMS plans to launch a website for the hospice survey in the summer of 2014.

The 1.3% payment update does not, however, include the impact of the 2% sequester to Medicare reimbursements for home health providers—an area of opposition for the National Association for Home Care & Hospice (NAHC), among other home health industry groups. 

NAHC and its Hospice Association of America will be soliciting comments from hospice provider members, beneficiaries and other stakeholders on the updated proposal from CMS. 

“NAHC and HAA strongly encourages all hospices to thoroughly review the proposed regulation in its entirety and submit individual or organizational comments to CMS,” stated NAHC. 

Public comments on the proposal will be accepted until July 1, 2014. The proposal can be viewed at the Federal Register under “special filing.”

Written by Jason Oliva

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