CMS Proposes $180 Million Increase in 2018 Hospice Payments

The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule to update the hospice payment rates for fiscal year 2018, with an estimated $180 million overall increase.

The rule also proposes new quality measures and provides an update on the hospice quality reporting program (HQRP). The Hospice Compare website will be released in the summer of 2017, the proposed rule states.

The 2018 payment update is significantly less than the total $350 million increase in payments in the fiscal year 2017 update.


The Medicare hospice benefit pays for four levels of care, including routine home care, general inpatient care, continuous home care and inpatient respite care. The majority of hospice is provided in routine home care level of care.

Since the hospice benefit was introduced in 1983, the benefit utilization has grown significantly. The number of beneficiaries receiving hospice services has grown from 513,000 in FY 2000 to nearly 1.4 million in FY 2016. Over that time period, hospice expenditures have risen from $2.8 billion to approximately $16.5 billion in 2016.

Expenditures are expected to continued rising by approximately 7% annually, according to CMS’ Office of the Actuary (OACT).


The rule also proposes to discuss and solicit comments for the clinical certification of a medical prognosis of a life expectancy of six months or less.

“We have recognized in previous rules that prognostication is not an exact science, and thus, a beneficiary may be under a hospice election longer than six months, as long as there remains a reasonable expectation that the individual has a life expectancy of six months or less,” the proposed rule reads.

The rule also began to detail new data collection mechanisms under consideration, including the Hospice Evaluation & Assessment Reporting Tool (HEART). HEART would provide the quality data necessary for Hospice Quality Reporting Program (HQRP) and the current function of Hospice Item Set (HIS), as well as provide clinical data to inform payment refinements. Development of HEART is ongoing.

While the Home Health Compare website will become active in 2017, hospice star ratings, between 1 and 5 stars, will be determined through methods yet to be announced, CMS stated. Public comments regarding how the rating system will determine star ratings, methods for calculations and the proposed timeline for implementation are forthcoming.

The rule was submitted to the Federal Register, but will not be published until May 3, when it will enter a public comment period. An unpublished version of the proposed rule can be downloaded on the Federal Register.

Written by Amy Baxter

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