The Centers for Medicare & Medicaid Services (CMS) has released a final rule updating hospice payment rates for fiscal year (FY) 2024. This rule is effective October 1, 2023.
Annual Rate Setting Changes
The update, released July 28, 2023, includes a 3.1% increase in hospice payments, which is based on a 3.3% inpatient hospital market basket percentage increase reduced by a 0.2 percentage point productivity adjustment. This change is estimated to yield $780 million in increased payments compared to last year.
Wage Index
The final wage index for Hospice will be based on the federal fiscal year (FFY) 2024 hospital pre-floor, pre-reclassified wage index.
CMS finalized the proposal for a permanent cap on negative wage index changes not to exceed 5% from the prior year—regardless of the underlying reason for the decrease.
Final Changes to Hospice Payments
CMS finalized the following updates to the hospice payments for FY 2024.
Hospice Payments That Meet Quality Standards
Hospice Payments That Don’t Meet Quality Standards
The final rule also includes a change to the payment reduction for failing to meet hospice quality reporting requirements. The payment reduction has been increased from 2 to 4 percentage points.
Hospice Cap Amount
Payments are capped for FY 2024 to $33,494.01 per patient, up from $32,486.92 for FY 2023.
Hospice Quality Reporting Programs
The change to the payment reduction for failing to meet hospice quality reporting requirements is also important. This change is designed as an incentive for hospice providers to collect and submit quality data, helping improve care. Hospice providers who don’t submit required quality data will see their rates decreased by 0.9%; 3.1% minus the 4 percentage points. Reductions due to noncompliance with quality reporting requirements apply only to the specified year.
CMS reports that 18% of certified hospice providers fail to comply.
Quality Measures
Below are the quality measures in effect for the Hospice Quality Reporting Program. These measures were finalized in FFY 2022.
Other Notable Updates
Other rules CMS finalized require physicians certifying hospice eligibility be enrolled as Medicare providers to ensure providers are appropriately qualified before hospice services are reimbursed. This requirement will be enforced starting May 1, 2024.
Next Steps
Hospice providers need to review whether the appropriate rates have been loaded into the patient accounting system used to bill Medicare on or after October 1, 2023.
Once these revised rates are incorporated, providers can validate whether the rates calculate appropriately. For example, providers can review the Medicare remittance advice to ensure a hospice receives the payment expected.
We’re Here to Help
For more information about the final rule and its implications, contact your Moss Adams professional.