Home Health & Hospice Week

The hospice cap amount for FY 2024 is also updated by 3.1 percent to $33,494.01. The increase will translate to an additional $780 million in hospice payments next fiscal year, the American Hospital Association notes in rule analysis.

Industry observers were hoping to see a rate jump more similar to last year’s, when CMS went from a proposed 2.7 percent to a finalized 3.8 percent pay increase.

Hospices, particularly in places most vulnerable to access issues, will find operating increasingly more difficult under limited financial means, critics say.

“While we appreciate the payment increase to 3.1 percent, a more generous market basket update was badly needed for nonprofit, mission-driven hospice providers committed to continuing to provide quality care in their communities,” insists LeadingAge CEO and President Katie Smith Sloan in a release. “Even with this increase, conditions on the ground require more support: workforce costs are higher than ever; nurses and aides are scarce, and cost for supplies, drugs, gas, and other expenses are all inflated,” Smith Sloan stresses.

“We continue to be concerned about the ability of hospices to provide high quality services given the continuing rise in costs that they are experiencing,” Theresa Forster, VP for Hospice Policy for the National Association for Home Care & Hospice, says in a release. “However, the fact that the final rule provides a slight bump up from what was projected in spring is a positive development,” Forster allows.

NAHC, LeadingAge, and the National Hospice and Palliative Care Organization asked CMS to reconsider its market basket payment increases for 2021 and 2022 and make up for forecasts that fell well short of the actual increase. (See HHHW by AAPC, Vol. XXXII, No. 19 and No. 20). Other commenters on the proposed rule did the same.

“Many commenters … expressed concern that the proposed update is inadequate,” CMS shares in the final rule. They said “they have experienced unprecedented wage and inflationary pressures over the last several years” and because “wage costs reflect the majority of expenses ... in order to recruit and retain staff they have had to dramatically increase salary and benefit costs as well as rely on more contract labor,” the rule says.

“They also state that inflation for other goods and services, such as drugs and medical supplies, have contributed to a significant increase in operating costs. Some commenters stated that increased transportation costs, like gasoline prices, have a disproportionate impact on hospice providers, partic­ularly those serving rural patients,” CMS adds.

But Medicare officials are not prepared to make a retroactive adjustment to make up for the shortfalls, as requested by the trade groups, the rule indicates.

CMS acknowledges that “in FY 2021 and FY 2022, CMS forecasted 2.4 percent and 2.7 percent cost inflation while … the actual cost inflation borne by hospice providers was 3.1 percent and 5.7 percent respectively,” the rule notes. Thus, “the commenters calculated … a 3.7 percent payment update error.”

But “there is currently no mechanism to adjust for market basket forecast error in the hospice payment update,” CMS claims in the rule. And the forecast has often swung the other way, the agency counters. “Only considering the forecast error for years when the final ... increase was lower than the actual ... increase does not consider the numerous years that providers benefited from the forecast error,” CMS says.

Wage index: CMS finalized another recent change regarding the wage index it uses for hospices. While the wage index is being updated as usual, for only the second time CMS caps downward swings at 5 percent. The agency finalized that change in last year’s hospice rule (see HHHW by AAPC, Vol. XXXI, No. 27), and later followed suit in the home health rule. 

Note: The 36-page final rule is at www.govinfo.gov/content/ pkg/FR-2023-08-02/pdf/2023-16116.pdf. A link to the wage index is at www.cms.gov/medicare/medicare-fee-service-payment/ hospice/hospice-regulations-and-notices/1753855621/cms-1787-f.