CMS Proposes $200 Million Increase In Hospice Pay

Medicare-certified hospices may see an estimated $200 million increase in their payments for fiscal year 2016, but some industry members are voicing concern about how reimbursements will be distributed among different levels of care.

The Centers for Medicare & Medicaid Services (CMS) recently issued a proposed rule (CMS-1629-P) that would update fiscal year 2016 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries.

The proposed rule impacts routine home care rates, creating two different payment rates for routine home care (RHC) that would result in a higher base payment rate for the first 60 days of hospice care and a reduced base payment rate for 61 or more days of hospice care.


“These differing payment rates would further the goal of more accurately aligning the per diem payments with visit intensity and the cost of providing care,” CMS says in a statement.

In conjunction with the proposed RHC rates, the proposed rule includes a Service Intensity Add-On (SIA) Payment for fiscal year 2016 and beyond.

“The proposed SIA payment is a payment that would be made for the last seven days of life in addition to the per diem rate for the Routine Home Care (RHC) level of care if certain criteria were met,” CMS says.


The payment would not be made to providers with patients residing in SNF/NFs, which is drawing concern from the the National Association for Home Care & Hospice (NAHC).

“We are taking a particularly close look at CMS’ proposed service intensity add-on (SIA) that is intended to support the very resource-intensive care provided to patients and families at the end of life,” says said Denise Schrader, chair of the NAHC Board of Directors. “While we appreciate CMS’ efforts to address this issue, we have concerns about the adequacy of this add-on, and further concerns that CMS would not allow this adjustment for patients residing in nursing facilities.”

The estimated 1.3% increase in hospices’ payments for fiscal year 2016 reflects the distributional effects of the 1.8% proposed fiscal year 2016 hospice payment update percentage ($290 million increase), the use of updated wage index data and the phase-out of the wage index budget neutrality adjustment factor and the proposed implementation of the new Office of Management and Budget (OMB) Core Based Statistical Areas (CBSA) delineations for the fiscal year 2016 hospice wage index with a one-year transition, notes CMS.

The elimination of the wage index budget neutrality adjustment factor (BNAF) was part of a seven-year phase-out and is not a policy change.

In addition, the proposed rule offers clarification regarding diagnoses on claim forms.

“Based on the numerous comments received in previous rulemaking, and anecdotal reports from hospices, hospice beneficiaries, and non-hospice providers, we are concerned that some hospices are neither conducting a comprehensive assessment nor updating the plan of care as articulated by the Conditions of Participation to recognize the conditions that affect an individual’s terminal prognosis,” CMS says.

As a result, the proposed rule mandates that hospices report all diagnoses identified in the initial and comprehensive assessments on hospice claims, whether related or unrelated to the terminal prognosis of the individual.

View the proposed rule here. Public comments on the proposal will be accepted until June 29, 2015.

Written by Cassandra Dowell

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