CMS Releases Hospice Payment Rate Update Proposed Rule

WASHINGTON—On March 28, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (CMS-1810-P) that would update Medicare hospice payments and the aggregate cap amount for fiscal year (FY) 2025 in accordance with existing statutory and regulatory requirements.

This rule also proposes to adopt the most recent Office of Management and Budget (OMB) statistical area delineations, which would change the hospice wage index, and proposes to clarify current policy related to the hospice “election statement” and the “notice of election” (NOE), as well as adding clarifying language regarding hospice certification. Finally, this rule contains a request for information to solicit comments regarding implementing a separate payment mechanism to account for high-intensity palliative care services.

This rule also proposes that Hospice Quality Reporting Program (HQRP) measures be collected through a new collection instrument, the Hospice Outcomes and Patient Evaluation (HOPE); proposes two HOPE-based measures and lays out the planned trajectory for further development of this instrument; requests information regarding potential social determinants of health (SDOH) elements and provides updates on Health Equity, future quality measures (QMs), and public reporting requirements. Finally, this rule also proposes changes to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey. 

Industry Voices 

“While the proposed rule may appear to be fairly innocuous,” said NAHC President William A. Dombi, in response to the rule announcement, “the hospice community should pay attention to the information request on high cost services as it may signal an emerging interest in payment model reform. What is missing is also notable, CMS has not proposed any program integrity measures to address continued concerns on the surge in hospice growth in certain parts of the country despite the warning signs presented.”

“NAHC is disappointed in the inadequate 2.6% payment rate update proposed by CMS. This small increase does not reflect the high costs hospices continue to face as a result of ongoing workforce shortages and inflationary cost challenges,” said NAHC Vice President for Hospice Policy Davis Baird. “More and more people are being served by hospice every year, and  CMS needs to recognize the dynamic value the benefit provides—not only from the improved quality of life hospices provide, but also from the huge financial savings to Medicare that utilization of the hospice benefit drives. As the seminal NORC analysis showed, hospice saves the overall Medicare program billions of dollars a year. It is high time CMS acknowledges this outsized impact and provides the resources hospices need to meet the growing demand for their unique services.”

“NAHC is pleased that CMS is proposing regulatory text changes to clarify points of confusion pertaining to which physicians are able to certify terminal illness and around the election statement and notice of election,” said Katie Wehri, NAHC’s director of home health and hospice regulatory affairs. “The quality reporting program proposal that is already generating great interest is the proposal to implement the HOPE and the release of the draft HOPE tool and accompanying guidance manual. While hospices have been requesting changes to the CAHPS Hospice Survey and will be happy to see some of these proposals, more work needs to be done to address the decreasing response rate and reasons for this.”

“The demand for hospice services is growing as our country’s population is rapidly aging,” Katie Smith Sloan, president and CEO, LeadingAge. “While any increase in payment is appreciated, we are disappointed with the proposed 2.6% payment increase from the Centers for Medicare and Medicaid Services (CMS). This is not enough for our nonprofit, mission driven hospice members who are struggling to keep up with both continued workforce shortages and inflation-driven operating expense increases. Without a better rate adjustment, providers will have to continue to reject referrals and may even close, leaving older adults and families searching for care. 

We are excited to see the request for information around payment for high-intensity palliative services—this thinking aligns with our benefit reform proposal around concurrent care,” Sloan continued. “We also want to recognize that CMS released the long-awaited Hospice Outcome and Patient Evaluation (HOPE) tool. While we are still analyzing the tool, this proposal represents a major shift in the hospice quality landscape and we are hopeful that it will help our members in their mission to deliver high-quality hospice care”

Medicare Hospice Payment Policies 

This proposed rule proposes to adopt the most recent OMB statistical area delineations, which revise the existing core-based statistical areas based on data collected during the 2020 Decennial Census. Hospices affected by the change to their geographic wage index will be eligible for applying a 5% cap on any decrease to the wage index from the prior year. This permanent cap, finalized in the FY 2023 Hospice Final Rule, would prevent a geographic area’s wage index from falling below 9% of its wage index calculated in the prior FY.

This proposed rule also solicits comments from the public related to the potential implementation of a separate payment mechanism to account for high-intensity palliative care services (i.e., palliative dialysis, chemotherapy, radiation and transfusions) provided under the hospice benefit. 

FY 2025 Routine Annual Rate Setting Changes

The FY 2025 hospice payment update percentage is 2.6% (an estimated increase of $705 million in payments from FY 2024). This results from the 3% market basket percentage increase reduced by a 0.4 percentage point productivity adjustment. The proposed FY 2025 rates for hospices that do not submit the required quality data would be updated by the proposed FY 2025 hospice payment update percentage of 2.6% minus four percentage points, which results in a -1.4% update. 

The hospice payment update includes a statutory aggregate cap that limits the overall payments per patient that may be made to a hospice annually. The proposed hospice cap amount for the 2025 fiscal year is $34,364.85 (FY 2024 cap amount of $33,494.01 increased by the FY 2025 hospice payment update percentage of 2.6%).

Hospice Quality Reporting Program (HQRP) 

This rule proposes adding two new process measures to HQRP, Timely Reassessment of Pain Impact and Timely Reassessment of Non-Pain Symptom Impact, expected to begin in FY 2028. These two measures would use the data that the new HOPE instrument will collect, discussed below. These process measures would reflect whether a follow-up visit occurred within 48 hours of an initial assessment where there was an impact of moderate or severe symptoms with and without pain. 

This rule also proposes to adopt and implement the HOPE patient-level data collection tool, beginning with FY 2025, and functionally replace the existing Hospice Item Set (HIS) structure upon implementation. HOPE will collect data at multiple time points across the hospice stay, including admission, the HOPE Update Visit (HUV), and discharge. Compared to the HIS (which only collected data at hospice admission and discharge), HOPE will enable CMS to gather patient-level data during their hospice stay to support quality measures. HOPE includes several domains that are new or expanded relative to HIS, including:

• Sociodemographic (updated) 
• Diagnoses (expanded)
• Symptom Impact Assessment 
• Imminent death 

This proposed rule requests stakeholder input on potential data collection items related to four SDOHs (housing instability, food insecurity, utility and transportation challenges) that may be relevant to the hospice setting and how they may need to be adapted to be better suited for the hospice setting. 

Finally, this proposed rule proposes changes to the Hospice CAHPS Survey based on the results of a mode experiment conducted in 2021. Specifically, the changes being proposed are:

• The addition of a web-mail mode (email invitation to a web survey, with mail follow-up to non-responders),
• A shortened and simplified survey, 
• Modifications to survey administration protocols to include a prenotification letter and extended field period,
• The addition of a new, two-item Care Preferences measure, 
• Revisions to the existing Hospice Team Communication measure and the existing Getting Hospice Care Training measure,
• The removal of three nursing home items and additional survey items impacted by other proposed changes in this rule. 

The Hospice Special Focus Program (SFP) algorithm uses data from four measures related to caregiver experience collected by the CAHPS Hospice Survey, including Help for Pain and Symptoms, Getting Timely Help, Willingness to Recommend this Hospice, and Overall Rating of this Hospice. This proposed rule includes changes to the Overall Rating of this Hospice measure that are non-substantive and will not impact the SFP algorithm. 

“We appreciate commenters’ interest in the Hospice SFP as finalized in the CY 24 Home Health final rule (88 FR 77676). We continue to review comments and consider whether amendments are necessary,” CMS said in the proposed rule release.

Hospice Conditions of Participation Technical Update

CMS has identified language discrepancies in the existing requirements for hospices as it relates to the medical director and physician designee in the Conditions of Participation (CoPs), and physician member of the interdisciplinary group (IDG) in the payment requirements for the certification of the terminal illness and the admission to hospice care.

“Therefore, to align the medical director CoP and the hospice payment requirements for both clarity and consistency, we are proposing technical changes to the CoPs by adding the physician member of the hospice IDG as an individual who may review the clinical information for each patient and provide written certification that it is anticipated that the patient’s life expectancy is six months or less if the illness runs its normal course,” CMS said. “Subsequently, the proposed changes also include an update to the medical director and admission to hospice care CoPs to clarify that if the medical director is unavailable, the physician designee may review the clinical information and certify the terminal illness.”

Additionally, CMS is proposing regulation text changes related to clarify the requirements related to the election statement and NOE in the CoPs. These regulation text changes do not change current policy but are intended to reorganize and more clearly distinguish the separate requirements for the “election statement” and the NOE.

The proposed rule can be viewed at the Federal Register at federalregister.gov/public-inspection. 

Public comments on the proposals will be accepted until May 28, 2024.

For further information, see the hospice webpage here: cms.gov/Center/Provider- Type/Hospice-Center.html.