Hospice Proposed Rule Includes 2.7% Rate Increase

WASHINGTON, D.C. (March 31, 2022)—The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule (CMS1773-P) that would provide routine updates to hospice based payments and the aggregate cap amount for fiscal year (FY) 2023 in accordance with existing statutory and regulatory requirements. This rule proposes to establish a permanent mitigation policy to smooth the impact of year-to-year changes in hospice payments related to changes in the hospice wage index.

CMS is committed to addressing consistent and persistent inequities in health outcomes by improving data collection to measure and analyze disparities across programs and policies that apply to the Hospice Quality Reporting Program (HQRP). This rule discusses the HQRP including the Hospice Outcomes and Patient Evaluation (HOPE) tool; provides an update on Quality Measures (QMs) that will be in effect in FY 2023 as well as future QMs; and also provides updates on the Consumer Assessment of Healthcare Providers and Systems, Hospice Survey Mode Experiment. 

This rule also contains a request for information (RFI) on health equity and proposes updates to advancing a health information exchange.

Proposed Medicare Hospice Payment Policies
This proposed rule proposes a permanent, budget neutral approach to smooth year-to-year changes in the hospice wage index. Specifically, CMS is proposing 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
As proposed, 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 percentage point). Hospices that fail to meet quality reporting requirements receive a 2-percentage point reduction to the annual market basket update for FY 2023.

The hospice payment update includes a statutory aggregate cap that limits the overall payments per patient that is made to a hospice annually. The proposed cap amount for FY 2023 is $32,142.65 (FY 2022 cap amount of $31,297.61 increased by 2.7%).

Hospice Quality Reporting Program
This rule provides an update on the development of a patient assessment instrument, titled 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 our future plans for adoption. CMS also discusses potential future quality measures within the 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 CAHPS Hospice Survey, which is used to collect data on experiences of hospice care from primary caregivers of hospice patients. In particular, CMS is providing an update on a mode experiment whose goal was to test the effect of adding a web-based mode to the CAHPS Hospice Survey.

In this proposed rule, we are seeking information on our Health Equity Initiative within the HQRP by describing our current assessment of health equity within hospice. We are also seeking input on a potential future structural measure as well as responses to specific questions that would further inform future efforts.

The proposed rule went on display on March 30, 2022 here.

For further information, see the hospice webpage here.

Public comments on the proposal will be accepted until May 31, 2022.