CMS Publishes Final Rule for Hospice Payments in Fiscal Year 2021

On August 4, 2020, the Centers for Medicare and Medicaid Services (CMS) published the final rule for hospice payments in fiscal year (FY) 2021 in the Federal Register. This rule will be effective October 1, 2020.

Final Changes to Hospice Payments

CMS has finalized the following updates to the regulations for inflation factors, wage adjustments, and cap amounts for hospices for FY 2021.

Hospice Payments Where Quality Standards Are Met

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Hospice Payments Where Quality Standards Aren’t Met

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Other Notable Updates

Hospice Cap Amount

The finalized hospice cap amount increased to $30,683.93 for FY 2021 from $29,964.78 in FY 2020.

Rural Facility Designations

The Office of Management and Budget (OMB) Bulletin No. 18-04 issued September 14, 2018, will go into effect in 2021. CMS states that it’s important to use the latest OMB delineations to maintain an up-to-date payment system. Changes include the following:

  • 34 counties previously considered urban will be considered rural in FY 2021
  • 47 counties that are currently designated as rural will be considered urban in FY 2021
  • A two-year transition period will be employed, using a 5% cap on decreases in payments due to this methodology change

Economic Impact

The overall economic impact of the proposed FY 2021 changes constitutes a $540 million increase in payments from FY 2020.

Next Steps

Hospice providers need to review whether the appropriate rates have been loaded into their patient accounting system used to bill Medicare. Once these revised rates are incorporated, best practice would be to validate that the rates are calculating appropriately.

We’re Here to Help

For more information about the final rule, the revised rates or during the course of your validation review, contact your Moss Adams professional.