CMS has released the advance version of its final FY 2010 Medicare hospice wage index rule, which will increase hospice rates by 1.4% in FY 2010, compared to CMS’s earlier proposed rule which would have decreased rates by 1.1%. The rate increase reflects a 2.1% increase in the hospital market basket, offset by a 0.7% decrease resulting from the phase out of the hospice wage index budget neutrality adjustment factor (BNAF). In a change from the proposed rule, CMS is phasing out the BNAF reduction over 7 years, with a 10% BNAF reduction in FY 2010 and successive 15% reductions from FY 2011 through FY 2016. CMS notes that “[t]his more gradual phase-out provides opportunity for CMS to consider the effects of a reduction in payments in the context of hospice payment reform, which is under consideration.” The rule also will, among other things, revise the process for certification and recertification of terminal illness by requiring physicians to provide a brief narrative explanation to support a patient’s life expectancy of 6 months or less. The rule is effective October 1, 2009. The official version of the rule will be published August 6, 2009.