CMS finalizes wage index and payment rates for the Medicare hospice benefit

Late last week, the Centers for Medicare and Medicaid Services (CMS) issued the final rule updating the fiscal year (FY) 2014 Medicare payment rates and wage index for hospices serving Medicare beneficiaries. According to CMS, the hospices will see an estimated 1% ($160 million) increase in their payments for FY2014. The new hospice payment rates and wage index will be effective on October 1, 2013.

Here are some highlights:

  1. Budget Neutrality Adjustment Factor (BNAF) phase out- Continues with the fifth of the seven-year BNAF phase out, reducing the BNAF by 15%.
  2. Coding clarification CMS has clarified that hospice providers should not use non-specific diagnoses.  Diagnoses should be assigned based on the reason for hospice care. This is not a new regulation. It is a long-standing rule that hospices should follow all ICD-9-CM guidelines. CMS recognizes that there are process and system changes that need to be put in place. With that in mind, the rule states that claims received with these codes in the principal diagnosis field will be returned to the provider for more definitive coding of the principal diagnosis and additional diagnoses, effective for claims dated on or after October 1, 2014.
  3. Hospice quality reporting-The rule eliminates the currently reported quality measures beginning with the FY 2016 payment determination. For FY2016 payment determination, hospices will be required to collect Hospice Item Set (HIS) data for admission and discharge on all patients admitted to hospice starting July 1, 2014. The HIS data submission will affect the payment determination for FY2016.
  4. Patient Experience of Care-Hospices will be required to begin using the Hospice Experience of Care Survey in 2015. CMS will continue to keep hospices informed of efforts to develop this experience of care survey. Final requirements will be published in FY2015 rule making.
  5. Other Affordable Care Act reforms CMS provides updates on Medicare hospice payment reform efforts, including a discussion of reform model options, highlights from recent reform research, and an update on data collection efforts.

A link to the final rule is available at CMS-1449-F.

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Until next time,

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