Summary of FY 2015 Hospice Payment Rate Update
By - On Friday, August 22, 2014, the Centers for Medicare & Medicaid Services (CMS) released the 2015 Hospice Payment Rate final rule, which covers hospice payment rates and the 2015 wage index. The overall economic impact of this final rule is estimated to be $230 million in increased payments to hospices during fiscal year (FY) 2015.
The payment rates are based on the hospital market basket update, with the exception of reductions mandated for hospices by the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act (the Affordable Care Act). Additionally, the rule will update the hospice wage index and apply the 6th year of the 7-year Budget Neutrality Adjustment Factor (BNAF) phase-out.
Timeframes will also be specified for filing the hospice notice of election and the notice of termination/revocation. Attending physicians must be identified on the hospice election form and will changes in the attending physician need to be documented. Moreover, the rule will require expedited hospice self-reporting of their aggregate cap determinations and will also provide updates to the hospice quality reporting program.
Here is a quick rundown of the details on the final rule:
Hospice behavior and trends
CMS provided more information on hospice behavior and trends that had program integrity concerns, such as reform analyses related to beneficiaries dying without skilled visits at the end of life and utilization of General Inpatient Care (GIP). CMS also wanted to know if some hospices are operating within the intent of the Medicare Hospice benefit established by the Congress. Through hospice reform, CMS wants to clarify hospice payment policy and enforce policies when necessary to safeguard beneficiaries and the Medicare hospice benefit.
“Terminal illness” and “related conditions”
Through the final rule, CMS aimed to clarify the current concepts of holistic and comprehensive hospice care under the Medicare hospice benefit. CMS also took comments on processes that Part D plan sponsors could use to coordinate with Medicare hospices in determining coverage of drugs for hospice beneficiaries and resolving disagreements between the parties. CMS will also provide guidance on the beneficiary’s eligibility for hospice.
Cap determination
The final rule requires that hospices complete their aggregate cap determination using a pro-forma spreadsheet and payment data not earlier than three months after the cap year end. This will determine the hospices’ cap overpayment no later than five months after the cap year and remit any overpayments at that time. CMS stated that the change was necessary to better safeguard the Medicare Trust Fund.
Notice of election
CMS is going to mandate that hospices file the notice of election (NOE) and the notice of termination/revocation (NOTR) on behalf of beneficiaries within five calendar days after the effective date of election or of discharge/revocation, respectively. If not done, then it will be the hospice’s financial responsibility; however, CMS will allow a waiver in certain circumstances.
Hospice wage index
With the final rule, the hospice wage index will be updated with more current wage data and the BNAF will be reduced by an additional 15 percent for a total cumulative BNAF reduction of 85 percent. The total BNAF phase-out will be complete by FY 2016.
Additionally, there will be updates to the hospice quality reporting program. The hospice industry should also note that last year CMS set the July 1, 2014 implementation date for the Hospice Item Set and the January 1, 2015 implementation date for the CAHPS® Hospice Survey.
No new quality measures were proposed this year, however, changes related to the reconsideration process will be made. Additionally, changes to the extraordinary circumstance extensions or exemptions and hospice quality reporting program (HQRP) eligibility requirements for newly certified hospices will be made.
Coverage of drugs
CMS also took comments into account about processes that Part D plan sponsors could use to coordinate with Medicare hospices when determining coverage of drugs for hospice beneficiaries and settling party disagreements.
A technical regulations text change was also made in terms of the “social worker” definition.
