CMS Releases Payment Rate Update Final Rule

WASHINGTON—On July 30, 2024, the Centers for Medicare & Medicaid Services (CMS) issued a final rule (CMS-1810-F) updating Medicare hospice payment rates by 2.9% and setting the aggregate cap amount for fiscal year (FY) 2025. 

The new rule also requires Hospice Quality Reporting Program (HQRP) measures to be collected through a new collection instrument, the Hospice Outcomes and Patient Evaluation (HOPE), and finalizes two HOPE-based measures and discusses the anticipated trajectory for future refinement. The rule summarizes public comments received on the request for information regarding potential social determinants of health (SDOH) elements and provides updates on health equity, future quality measures (QMs), and public reporting requirements. Finally, the rule makes changes to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey.

Bill Dombi, president of the National Association for Homecare and Hospice (NAHC), said the rule is “well within” the expectations of advocates, highlighting the fact that the payment rate increased from CMS’ original proposal of 2.6% to 2.9% and included significant wage index revisions. 

“The most notable element is the requirement that the long-awaited HOPE quality measures instrument will take effect on October 1, 2025,” Dombi said in a joint statement with Ben Marcantonio, interim CEO of the National Hospice and Palliative Care Organization, which is merging with NAHC. “While the hospice community has long supported modernization of patient quality assessment instruments and data reporting, it is concerning that CMS requires a difficult timetable for compliance with no financial support for the significant costs brought by the initiation of the HOPE instrument. We look forward to a positive partnership with CMS to address these concerns.”   

Katie Smith Sloan, president and CEO of LeadingAge, said she was disappointed CMS did not delay implementation of the CAHPS changes to allow adequate time to develop the web mode of delivery, adding that the opportunity to increase participation in the survey should be CMS’ top priority. 

“Good hospice care is a holistic, patient- and family-centered, compassionate approach to the dying—and it can be a godsend,” Sloan said. “We recognize that a 2.9% is an increase, but given the  challenges our mission driven and nonprofit members continue to navigate, particularly a very competitive labor market especially for registered nurses, the final rule falls short of the need.” 

The new rule allows licensed practical nurses (LPNs) and licensed practical nurses (LVNs) to conduct follow-up visits for the new hospice quality measures, a move that LeadingAge said would reduce staffing pressures—but did not take the next step of allowing visits to be completed through telehealth. The rule also finalizes the proposal to adopt the most recent Office of Management and Budget (OMB) statistical area delineations, which impacts the hospice wage index and clarifies current policy related to the hospice “election statement” and the “notice of election” (NOE), as well as adds clarifying language regarding hospice admission and certification of terminal illness. The final rule summarizes public comments received related to the request for information regarding implementing a separate payment mechanism to account for high-intensity palliative care services.

Medicare Hospice Payment Policies

This rule finalizes the policy to adopt the most recent OMB statistical area delineations,which revise the existing core-based statistical areas (CBSA) based on data collected during the 2020 Decennial Census. Hospices negatively affected by the change to their geographic wage index will only experience a maximum 5% reduction to their 2024 wage index, as there is 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, prevents a geographic area’s wage index from falling below 95% of its wage index calculated in the prior FY.

The rule also summarizes comments from the public related to the comment solicitation in the proposed rule, on the potential implementation of a separate payment mechanism to account for high-intensity palliative care services (e.g., 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 2.9% (an estimated increase of $790 million in payments from FY 2024). This results from the 3.4% inpatient hospital market basket percentage increase, reduced by a 0.5 percentage point productivity adjustment. The FY 2025 payment rates for hospices that do not submit the required quality data would reflect the finalized FY 2025 hospice payment update percentage of 2.9%, minus four percentage points, which results in a -1.1% update.

The hospice payment update includes a statutory aggregate cap that limits the overall payments per individual that may be made annually to a hospice. The finalized hospice cap amount for FY 2025 is $34,465.34 (FY 2024 cap amount of $33,494.01, increased by the FY 2025 hospice payment update percentage of 2.9%).

Hospice Quality Reporting Program (HQRP)

This rule finalizes two new process measures to HQRP, Timely Follow-up for Pain Impact and Timely Follow-up for Non-Pain Symptom Impact, expected to begin in FY 2028. The reporting of these two measures would be through the new HOPE instrument discussed below. These process measures address hospice care delivery as they document 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.

The rule also adopts and implements the HOPE patient-level data collection tool, beginning with FY 2025, and functionally replaces, upon implementation, the existing Hospice Item Set (HIS) structure. 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 collects data at hospice admission and discharge), HOPE will enable CMS to gather patient-level data during their hospice stay to improve patient quality of care. In addition, HOPE includes several domains that are new or expanded relative to HIS, including:

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

In addition, this rule finalizes changes to the Hospice CAHPS Survey based on the results of a mode experiment conducted in 2021. Specifically, the changes being finalized 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 pre-notification letter and extension of the field period from 42 to 49 days. 
• 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 CMS Hospice Special Focus Program (SFP) will monitor hospices identified as poor performers based on selected quality indicators. Hospices selected for the SFP will be under additional oversight to enable continuous improvement.

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 final rule includes changes to the Overall Rating of this Hospice measure that are non-substantive and will not impact the SFP algorithm.

Finally, this final rule summarizes stakeholder input on potential data collection items related to four Social Determinants of Health items relevant to the HQRP (housing instability, food insecurity, utilities, and transportation challenges).

Hospice Conditions of Participation (CoPs) and Payment Requirements Technical Updates

CMS identified language discrepancies in the existing requirements for hospices as they relate 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, CMS is finalizing 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 made one additional change to the CoPs based on public comment: replacing “physician designated by” with “physician designee.” The finalized changes also include an update to provisions regarding certification and admission to hospice care in the hospice payment regulations to clarify that, if the medical director is unavailable, the physician designee (as defined in § 418.3) may certify the terminal illness and determine admission to hospice.

Additionally, CMS is finalizing regulation text changes to clarify the requirements related to the election statement and notice of election (NOE) in the payment regulations. 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.

Lastly, a technical error was noted and corrected in this rule regarding the CoPs in the hospice personnel requirements. The regulation text refers to “marriage and family counselor;” however, the correct term is “marriage and family therapist.”

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