CMS Increases Hospice Payment Rate in Proposed Rule for FY 2023

CMS has introduced a proposed rule for fiscal year 2023 that includes an increase in hospice payments and an aggregate cap on negative wage index changes.

Under the rule, hospices would see a 2.7 percent, or $580 million, increase in payments for FY 2023. The update is based on the projected 3.1 percent inpatient hospital market basket update, with a 0.4 percent reduction for productivity adjustment.

Additionally, hospices that do not meet quality reporting requirements will receive a 2 percent reduction in the FY 2023 annual market basket update.

The proposed rule would also establish a new annual payment cap of $32,142.65 per patient for hospice services in FY 2023. Currently, the FY 2022 cap amount is $31,297.61. The update reflects the proposed 2.7 percent increase in hospice payment rates.

During FY 2022, hospices received a 2.0 percent payment increase from the FY 2021 rate, totaling around $480 million.

The budget-neutral approach included in the rule would also implement a permanent cap on negative hospice wage index changes greater than a 5 percent decrease from the year before. With this cap, CMS aims to establish a mitigation policy to soften the effect of year-to-year hospice payment changes tied to changes in the hospice wage index, according to the press release.

The proposed rule offered updates to quality measure reporting as well.

CMS provided an update on the Hospice Quality Reporting Program (HQRP), specifically the Hospice Outcomes and Patient Evaluation (HOPE) tool. HOPE aims to help hospices better understand patient care needs by assessing patients in real-time and collecting standardized and clinical data.

The proposed rule offered updates on beta testing and derivatives that the HOPE tool plans to achieve, including provider burden estimates, collection time points, and additional outreach efforts.

CMS said it intends for the HOPE tool to provide quality data for the HQRP requirements through standardized data collection and to provide clinical data that may help inform future payment adjustments.

The rule also includes an update on quality measures within the HQRP based on HOPE that will take effect in FY 2023.

Additionally, CMS included a potential future update to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey, which collects data on patient experience with hospice and primary caregiver experiences. The update considers an experiment that aimed to add a web-based model to the CAHPS survey.

Finally, the rule contained a request for information (RFI) for the CMS health equity initiative with the HQRP. The CMS is seeking input on its current health equity assessment within hospice settings. The RFI also seeks feedback about potential structural measures and responses to specific questions to inform future efforts.

Stakeholders can submit comments on the proposed rule until May 31, 2022.