Industry Insights

Hospice Updates Effective October 1, 2016

October 2016
Author:  Eimee Wakefield

Eimee Wakefield

Senior Consultant II

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910 E. St. Louis Street, Suite 200
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The Centers for Medicare & Medicaid Services (CMS) recently issued the final rule for 2017 hospice payments, quality reporting requirements and hospice cap changes—effective October 1, 2016. CMS estimates the final rule’s combined changes will generate approximately $350 million in increased hospice payments.

Hospice Rate & Wage Index Update

If hospices report all required quality data, payments will increase 2.1 percent in 2017; if they’re not reported, the increase will only be 0.1 percent. The full increase calculation is based on the 2017 estimated inpatient market basket adjustment of 2.7 percent, less a required 2017 Affordable Care Act (ACA) estimated productivity adjustment of 0.3 percent and an additional ACA reduction of 0.3 percent (required for years 2013 through 2019). In 2017, the Budget Neutrality Adjustment Factor didn’t apply, as it phased out in 2016. All payments continue to be subject to the 2 percent sequestration reduction.

The updated payment rates can be found here.

Quality

A primary focus of the 2017 final rule was the hospice quality reporting program (HQRP). CMS isn’t eliminating any current HQRP measures, but is requiring two additional measures:

  1. Hospice Visits when Death is Imminent Measure Pair
  2. Hospice and Palliative Care Composite Process Measure

The first measure will evaluate visits to patients and caregivers during the last week of life. The second measure will compare present process guidelines with the percentage of hospice patients who received care.

Hospice Compare Website

As part of the focus on quality, CMS will initiate a public reporting website called Hospice Compare in 2017, likely in spring or summer. Hospice Compare will provide information, including an individual hospice’s overall rating as well as the willingness of its beneficiaries to recommend the hospice agency to others. It also will offer star ratings, on a scale of 1 to 5, for hospice agency comparability.

Hospice Cap

The hospice cap amount was updated for the 2016 and 2017 cap years. For 2016, the cap limit is $27,820.75 and for 2017 it’s $28,404.99.

In addition, the cap year was adjusted to mirror the federal fiscal year-end of September 30. This change will be effective for the 2017 cap year, which includes payments received from November 1, 2016, to September 30, 2017. The 2018 cap year will be for payments received from October 1, 2017, to September 30, 2018. The 2016 cap year will remained unchanged, including payments received from November 1, 2015, to October 31, 2016.

Hospice agencies should review the final rule and evaluate the potential effect on their individual organizations. The final rule can be found here.

Contact your BKD advisor for more information.

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