Home Health & Hospice Week

Don’t forget the 4 percent payment penalty for failing to submit required quality data is taking effect too.

While it’s nice to not see a pay cut such as the one the Medicare Payment Advisory Commission has recommended for hospices in fiscal year 2024, providers may be a bit disappointed in the proposed payment increase taking effect Oct. 1.

“The proposed hospice payment update percentage for FY 2024 would be 2.8 percent,” says the Centers for Medicare & Medicaid Services in its FY 2024 hospice proposed rule published in the April 4 Federal Register. “This is a result of the 3.0 percent market basket percentage increase reduced by a 0.2 percentage point productivity adjustment,” CMS explains in a fact sheet about the rule.

That would increase Medicare payments to hospices by about $720 million in FY 2025, CMS estimates.

But after struggling with skyrocketing costs for labor, fuel, and other essential elements, hospices may not be pleased with the 2.8 percent figure.

Trade group LeadingAge says it anticipates that “members [will] believe that 2.8 percent is not a sufficient update,” according to rule analysis on its website. “We ask that you share examples of costs with us so that we can make the case for a larger update,” LeadingAge tells its members.

Remember: And “if more recent data become available after the publication of this proposed rule and before the publication of the final rule (for example, a more recent estimate of the inpatient hospital market basket update and/or productivity adjustment), we would use such data, if appropriate, to determine the hospice payment update percentage for FY 2024 in the final rule,” CMS pledges.

Last year, between the proposed and final rules, the inpatient hospital market basket update jumped from 3.1 percent to 4.1 percent and the productivity adjustment fell from -0.4 percent to -0.3 percent. That meant the pay increase went from a proposed 2.7 percent to a finalized 3.8 percent.

This year’s proposed 2.8 percent update also will apply to hospices’ aggregate per patient cap figure, which will increase to $33,396.55, and rates for service levels (see chart, this page).

CMS also confirms that the penalty for failing to submit required quality data will jump from 2 percent to 4 percent on Oct. 1. In other words, such hospices would see a -1.2 percent update rather than an increase, CMS explains in the fact sheet.

The increased penalty was mandated in the Consolidated Appropriations Act, 2021, CMS reminds in the rule.

5% Cap On Wage Index Drops Still In Effect

Another recent change is to the wage index CMS uses for hospices.

While the wage index will be updated as usual, it will also for only the second time cap downward swings at 5 percent. CMS 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.

While hospices argued for the cap on downward swings to be even smaller, the 5 percent point is enough to provide “a degree of predictability in payment changes for providers,” CMS said in the 2023 final rule.

Mark your calendar: Comments on the rule are due May 30, CMS notes in the regulation.

Note: The 36-page rule is at www.govinfo.gov/content/pkg/ FR-2023-04-04/pdf/2023-06769.pdf.