Fact Sheets

Fiscal Year 2020 Hospice Payment Rate Update Proposed Rule (CMS-1714-P)

Fiscal Year 2020 Hospice Payment Rate Update Proposed Rule
CMS-1714-P

On April 19, 2019, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (CMS-1714-P) that demonstrates continued commitment to strengthening Medicare by better aligning the hospice payment rates with the costs of providing care and increasing transparency so patients can make more informed choices. 

This proposed rule would update the hospice payment rates, wage index, and cap amount for fiscal year (FY) 2020.  This rule also proposes to rebase the continuous home care (CHC), general inpatient care (GIP), and the inpatient respite care (IRC) per diem payment rates in a budget-neutral manner to more accurately align Medicare payments with the costs of providing care. In addition, this rule proposes to modify the election statement requirements to require the hospice to include additional information aimed at increasing coverage transparency for patients that elect hospice. CMS also is soliciting comments on the interaction of the hospice benefit and various alternative care delivery models. Finally, CMS will continue its work to modernize and strengthen Medicare operations through proposals to the Hospice Quality Reporting Program (HQRP).

This fact sheet discusses major provisions of the proposed rule. The deadline for submitting comments on the proposed rule is June 18, 2019. The proposed rule (CMS‑1714‑P) can be downloaded from the Federal Register at: https://www.federalregister.gov/documents/2019/04/25/2019-08143/medicare-program-fiscal-year-2020-hospice-wage-index-and-payment-rate-update-and-hospice-quality.

Strengthening Medicare
CMS is proposing changes in its inpatient and home care hospice rates to improve payment accuracy within the system. This includes rebasing the CHC, GIP, and IRC per diem payment rates. This proposal more accurately align payments with the costs of providing care in different settings.

CMS is also proposing to modify the existing hospice election statement content requirements to increase coverage transparency for patients that choose to elect hospice. Hospices would be required to provide, upon request, an election statement addendum with a list and rationale for items, drugs, and services that the hospice has determined to be unrelated to the terminal illness and related conditions to the beneficiary (or representative), other providers that are treating such conditions, and to Medicare contractors. Having this information and education will empower patients to make an informed decision when deciding to elect hospice.

To increase payment accuracy, CMS is proposing to use the concurrent IPPS wage index for the hospice wage index to align the data across all of the settings.  Currently, CMS calculates the hospice wage index using the previous year’s pre-floor, pre-reclassified hospital wage index data.  In this rule, CMS is proposing to use the FY 2020 pre-floor, pre-reclassified hospital wage index data for the FY 2020 hospice wage index rather than using the FY 2019 pre-floor, pre-reclassified hospital wage index data.

Finally, CMS is soliciting comments on the interaction of the hospice benefit and various alternative care delivery models, including Medicare Advantage (MA), Accountable Care Organizations (ACOs), other future models designed to change the incentives in providing care under traditional FFS Medicare, and any lessons learned that CMS should consider for future enhancements of the Medicare hospice benefit. 

Hospice Quality Reporting Program
The Hospice QRP was established in FY 2012.  There are 10 measures currently adopted for the Hospice QRP. In the FY 2020 proposed rule, CMS proposes to continue data collection on the measure “Hospice Visits over the Last 7 Days,” one of the companion measures in the “Hospice Visits When Death Is Imminent” measure pair[1], but proposes not to publicly report this measure at this time. This measure identifies if hospice patients received at least one hospice visit from a medical social worker, chaplain or spiritual counselor, licensed practical nurse, or aide during their final seven days of life, and is calculated using data from the Hospice Item Set.  CMS has decided not to publicly report this measure at this time to allow for further testing to determine if changes to the measure specifications or how it is displayed on Hospice Compare are needed.

CMS also proposes a change to an exemption from the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) Hospice Survey participation requirements.

Routine Annual Rate Setting Changes
As proposed, hospice payment rates are updated by 2.7 percent ($540 million increase in their payments) for FY 2020. This is based on the proposed FY 2020 hospital market basket increase of 3.2 percent reduced by the multifactor productivity adjustment of 0.5 percentage point resulting in a proposed 2.7 percent increase in hospice payment rates for FY 2020. Hospices that fail to meet quality reporting requirements receive a 2 percentage point reduction to the annual market basket update for the year.

The hospice payment system includes a statutory aggregate cap. The aggregate cap limits the overall payments per patient made to a hospice annually. The proposed hospice cap amount for the FY 2020 cap year will be $29,993.99, which is equal to the FY 2019 cap amount ($29,205.44) updated by the proposed FY 2020 hospice payment update percentage of 2.7 percent.

The proposed rule went on display at the Federal Register’s Public Inspection Desk and will be available under “Special Filings,” at https://www.federalregister.gov/documents/2019/04/25/2019-08143/medicare-program-fiscal-year-2020-hospice-wage-index-and-payment-rate-update-and-hospice-quality.

For further information, see http://www.cms.gov/Center/Provider-Type/Hospice-Center.html