CMS Final Rule Provides $825M YOY Bump in Hospice Payments

In 2023 hospice payments will increase by 3.8% and the most Medicare will pay per hospice patient in FY 2023 will be $32,486.92, this year the cap amount is $31,297.61. Hospices that don’t meet quality reporting requirements get a 2% point reduction to the annual hospice payment update percentage increase for the year.  The rule also includes a permanent 5% cap on wage index reductions relative to the prior year.

The Centers for Medicare & Medicaid Services defines hospice care as a comprehensive, holistic approach to treatment that recognizes the impending death of a terminally ill individual and warrants a change in the focus from curative care to palliative care for relief of pain and for symptom management. Medicare regulations define “palliative care” as patient and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and to facilitate patient autonomy, access to information, and choice. Palliative care is at the core of hospice philosophy and care practices, and is a critical component of the Medicare hospice benefit.

According to the rule, hospices providing services in the Pacific and West South Central regions would experience the largest estimated increases in payments of 4.4% and 4.3%, respectively

According to the Medicare Payment Advisory Commission’s (MedPAC) 2022 Report to the Congress between 2010 and 2020, hospice spending grew 5.7% annually, going from $12.9 billion to $22.4 billion. Between 2019 and 2020 alone, spending rose 7.4%, largely reflecting the number of people using hospice. In 2020 Medicare was the largest payer of hospice services, covering 90% of all patient days for 1.7 million beneficiaries deemed terminally ill with a life expectancy of six months.

In MedPAC’s report it recommended positive payment updates in 2023 for three FFS payment systems (hospital, long-term care hospital, and outpatient dialysis); no update for three systems (physician, ambulatory surgical center, and hospice); and negative updates for three systems (skilled nursing facility, home health, and inpatient rehabilitation facility).

The commission also wants hospices to provide more information on the telehealth services they provide, to help policymakers assess the impact of these services on access, quality, and costs. In addition, the commission recommended the hospice aggregate cap be wage adjusted and reduced by 20%, focusing payment reductions on providers with disproportionately long stays and high margins.

Updates on the Hospice Quality Reporting Program

CMS provided more information on the patient assessment tool: Hospice Outcomes and Patient Evaluation (HOPE). This includes an update on the beta testing and derivatives that will be achieved during this phase of testing, such as burden estimates and timepoints for collection, as well as additional outreach efforts that will be conducted during and after beta testing and during the tool’s planned adoption process.

The two primary objectives of HOPE are to:

• Provide quality data for Hospice Quality Reporting Program (HQRP) requirements through standardized data collection
• Provide additional clinical data that could inform future payment refinements.

CMS also discusses potential future quality measures within the HQRP based on HOPE and administrative data, including HOPE-based process measures and hybrid quality measures, which could be based upon multiple sources that include HOPE, claims and other data sources.  An update on testing conducted for the CAHPS Hospice Survey, is also a provision;  the agency is providing an update on a survey-mode experiment with a goal of testing the effect of adding a web-based mode to the survey.

Finally, the new rule establishes, for FY 2023 and subsequent years, a permanent, budget neutral 5% cap on any decrease to a geographic area’s wage index, so that a geographic area’s wage index would not be less than 95% of its wage index calculated in the prior FY regardless of the circumstances causing the decline.

Review the final rule on the Federal Register