On April 30, 2015, CMS issued a proposed rule that would give hospices serving Medicare beneficiaries an estimated 1.3 percent ($200 million) increase in their FY 2016 payments.  Comments on the proposed rule are due by June 29, 2015.

As part of the proposed rule, CMS is proposing two different payment rates for routine home care (RHC) that would result in a higher base payment rate for the initial 60 days of hospice care and a reduced base payment rate for subsequent days, with the goal of more accurately aligning the per diem payments with visit intensity and the cost of care.  In addition, CMS proposes a Service Intensity Add-On (SIA) payment in conjunction with the proposed RHC rates.  The SIA payment would be made in the last seven days of the patient’s life in addition to the per diem rate for the RHC level of care, depending on whether certain criteria are met.  According to CMS, the SIA payment policy encourages provider visits to end-of-life patients, seeks to improve provider accountability, and addresses the industry’s concern with respect to the necessity of increased payment for more resource-intensive days of care.

The proposed rule also clarifies hospices’ claim reporting obligations with respect to diagnoses.  Specifically, the proposed rule provides that hospices are required to report all diagnoses identified in the initial and comprehensive assessments on claims, whether related or unrelated to the terminal prognosis of the patient.

Other details of the proposed rule include:

  • Implementing the last year of the phase-out of the budget neutrality adjustment factor, which was implemented in 1997 when the Health Care Financing Administration (now CMS) shifted from an outdated wage index to a more current method for determining hospice payments; and  
  • Aligning the cap accounting year for both the inpatient cap and the hospice aggregate cap with the fiscal year starting in FY 2017.

The proposed rule is available here, and the CMS fact sheet summarizing key provisions of the proposed rule is available here.