CMS Proposes 2.8% Medicare Hospice Payment Bump

Medicare hospice payments could grow by as much as 2.8 percent, or $720 million, next year under a rule recently proposed by CMS.

The federal agency released the proposed rule on Friday. It seeks to update the Medicare payment rates for hospice care in fiscal year (FY) 2024 based on a 3 percent update to the market basket, reduced by a 0.2 percent productivity adjustment. The result is an updated payment cap per patient of $33,396.55.

However, hospices that do not submit quality data as required by CMS will receive a pay cut of 1.2 percent.

CMS said in the proposed rule it plans to start deducting 4 percentage points — rather than 2 percentage points — from the annual hospice payment update percentage for hospices that fail to meet quality reporting requirements. The higher penalty is part of the Consolidated Appropriations Act of 2021, which requires CMS to implement the new rate starting in FY2024.

Typically, about 18 percent of Medicare-certified hospices do not comply with quality reporting requirements and receive a payment reduction, according to the proposed rule.

CMS also said in the proposed rule that it is developing Hospice Outcomes & Patient Evaluation (HOPE), a hospice instrument for quality reporting. HOPE was finalized in the FY2020 Hospice Final Rule and intends to improve hospice care by assessing patients in real-time versus using the Hospice Item Set (HIS) retrospective chart review.

HOPE completed national beta testing at the end of October 2022. CMS is currently refining the tool and will release a final version in future rulemaking.

The proposed rule would also “require physicians who order or certify hospice services for Medicare beneficiaries to be enrolled in or validly opted-out of Medicare as a prerequisite for the payment of the hospice service in question.”

The new physician requirement is in response to concerns about fraud, waste, and abuse in the Medicare hospice program. In February, a bipartisan group of lawmakers led by Representatives Beth Van Duyne (TX-24) and Earl Blumenauer (OR-03) asked for a briefing on CMS’ oversight activities and potential gaps in oversight tools.

“CMS is looking closely at the hospice industry, as we have increasing concerns about fraud, waste and abuse in this space,” stated a fact sheet on the CMS website. “While this rule takes initial steps, this is part of a larger effort by CMS to address hospice fraud, waste and abuse that will continue this year.”

CMS has also sought stakeholder feedback through the proposed rule. The agency is asking the public, including hospice providers and patient advocates, to provide more information on expanding access to higher levels of hospice care, ownership transparency, hospice election decision-making, and ways to examine health equity under the hospice benefit.

Public comments on the requests for information and other proposals in the rule will be accepted through May 30, 2023.