CMS Publishes Proposed Rule for Hospice Payments in Fiscal Year 2023

On April 4, 2022, the Centers for Medicare and Medicaid Services (CMS) published the proposed rule for hospice payments in fiscal year (FY) 2023 in the Federal Register.

If finalized, this rule will be effective October 1, 2022. An overview of the proposal follows.

Proposed Medicare Hospice Payment Policies

Wage Index Cap

The proposed rule proposes a permanent, budget neutral approach to smooth year-to-year changes in the hospice wage index.

Specifically, CMS proposes a permanent cap on negative wage index changes greater than a 5% decrease from the prior year—regardless of the underlying reason for the decrease—for hospices in the FY 2023 proposed rule.

Routine Annual Rate Setting Changes

Hospices would see a 2.7% ($580 million) increase in their payments for FY 2023. The proposed 2.7% hospice payment update for FY 2023 is based on the estimated 3.1% inpatient hospital market basket update reduced by the productivity adjustment (0.4%).

Hospices that fail to meet quality reporting requirements receive a 2% reduction to the annual market basket update for FY 2023.

Hospice Quality Reporting Program

This rule provides an update on the development of a patient assessment instrument, titled Hospice Outcomes and Patient Evaluation (HOPE), which would contribute to a patient’s plan of care when adopted.

This includes an update on the beta testing and derivatives that will be achieved during this phase of testing, such as burden estimates and timepoints for collection, as well as additional outreach efforts that will be conducted during and after beta testing and during future plans for adoption.

CMS also discusses potential future quality measures within the Hospice Quality Reporting Program (HQRP) based on HOPE and administrative data, including HOPE-based process measures and hybrid quality measures, which could be based upon multiple sources that include HOPE, claims, and other data sources.

This rule announces a potential future update to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey, which collects data on experiences of hospice care from primary caregivers of hospice patients.

In particular, CMS will provide an update on a mode experiment, which aimed to test the effect of adding a web-based mode to the CAHPS Hospice Survey.

In this proposed rule, CMS seeks information on the Health Equity Initiative within the HQRP by describing its current assessment of health equity within hospice.

CMS also seeks input on a potential future structural measure as well as responses to specific questions that would further inform future efforts.

Proposed Changes to Hospice Payments

CMS proposed the following updates to the hospice payments for FY 2023.

Table of Hospice Payments that meet quality standards Table of Hospice payments that didn't meet quality standards

Other Notable Updates

Hospice Cap Amount

The hospice payment update includes a statutory aggregate cap that limits the overall payments per patient made to a hospice annually.

The proposed cap amount for FY 2023 is $32,142.65, which is the FY 2022 cap amount of $31,297.61 increased by 2.7%.

Economic Impact

The overall economic impact of the proposed FY 2023 changes constitutes a $580 million increase in payments from FY 2022.

Public Comments

Public comments can be submitted through 5:00 p.m. EST on May 31, 2022.

When commenting, reference CMS-1773-P. For other options to submit your comments, refer to the proposed rule.

We’re Here to Help

For more information about the proposed rule and its implications, contact your Moss Adams professional.

You can also find more insights on our Provider Reimbursement Enterprise Services page.

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