Reimbursement

Since early 2008, the hospice community has been working hard, on behalf of the patients and families we serve, to protect the Medicare Hospice Benefit from reductions that would hinder patient access to hospice services and force some hospice programs to shut their doors completely.  We have had some great successes and a few set- backs.  Accordingly, the battle to protect patient access to hospice continues!

Hospice has been hit with an administrative cut as well as impacted by a series of cuts applied to most Medicare providers as part of health care reform and budget reduction efforts.

  • Beginning in October 2009, CMS began a seven-year phase out of the Budget Neutrality Adjustment Factor (BNAF), a key element in the Medicare hospice wage index that will ultimately result in a permanent reduction in hospice reimbursement rates of 4.2 percent.
  • The 2009 Affordable Care Act imposed an additional change to the Medicare hospice formula that will further cut hospice payments by approximately 11.8 percent over the next ten years through the introduction of a “productivity adjustment” on the calculation of annual payment updates for hospice.
  • Hospice is among the Medicare providers impacted by sequestration, as part of deficit reduction efforts.  For providers, including hospice, it is anticipated that this will mean an automatic 2 percent reduction to hospice reimbursement beginning in January, 2013, and lasting through 2022.

Additionally, the Affordable Care Act included a MedPAC recommendation to transfer hospice payment authority from Congress to the Secretary of Health and Human Services. MedPAC also recommended, and the ACA statute required, the Secretary to collect and analyze extensive data prior to implementing a new payment system for hospice, on or after fiscal year 2014. NHPCO is supportive of the proposal for a new payment structure.

Starting on January 1, 2016, the routine home care rate (RHC) will change to a two-tiered rate, with a higher rate for the first 60 days of a patient’s care, and a lower rate for days 61 and after. This change applies to state Medicaid hospice benefits as well as the Medicare Hospice Benefit. Also starting on January 1, 2016, a service intensity add-on (SIA) payment will be made for visits conducted by an RN and/or social worker up to 4 hours a day (combined) during the last seven days of a hospice patient’s life. The patient must be receiving routine home care and direct care is provided by the RN and/or social worker. The SIA payment equals the continuous home care hourly rate, and is disbursed in addition to the RHC rate for the days the RN and social worker visits are made.

Resources:

Hospice Compliance/Regulatory Requirements, with Medicare Reimbursement Changes 2009-2016 (PDF; Updated 08/2015).

Press Release: CMS Final Rule Implements New Payment Structure for Hospice (08/03/2015)

Hospice and a Medicare Unified Deductible/Copay (Medicare Reform; Updated 02/2015)

Analysis of ten year impact of all cuts on hospice margins (Moran)

For NHPCO Members: Click here to see the most recent Wage Index Calculator and Medicare Hospice Rates.