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Hospices would generally see a 1.0 percent ($180 million) increase in their Medicare payments for FY 2018, under Centers for Medicare & Medicaid Services (CMS) proposed regulations in the May 3 Federal Register. If finalized, the new payment rate will contrast with the one for fiscal 2017 - a final rule CMS issued last August 5 in which hospices saw a 2.1 percent ($350 million) increase in their payments for the year.

CMS notes its proposed increase this year is controlled by congressional mandate: Section 411(d) of the Medicare Access and CHIP Reauthorization Act of 2015 (PL 114-10) (MACRA) amended section 1814(i) of the Social Security Act to set the market basket percentage increase at 1 percent for hospices in FY 2018.

The Proposed Rule Details:

  • Routine annual rate setting changes
  • Discussion and solicitation of comments regarding sources of clinical information for certifying terminal illness
  • Hospice CAHPS Experience of Care Survey
  • Quality measure concepts under consideration for future years
  • New data collection mechanisms under consideration: Hospice Evaluation & Assessment Reporting Tool (HEART) 
  • Public reporting

Impact by Geographic Area

By geographic areas, CMS estimates that hospices in urban and rural areas would experience, on average, 1.0 percent and 1.1 percent increases, respectively, in estimated payments compared to FY 2017. Hospices providing services in the urban Pacific and rural Middle Atlantic regions would experience the largest estimated increases in payments of 1.7 percent and 1.6 percent, respectively. Hospices serving patients in urban areas in the New England region would experience, on average, the lowest estimated increase of 0.3 percent in FY 2018 payments.

CMS elaborates on the stricture of law, MACRA, which nationwide limits the hospice payment update for FY 2018 to 1 percent. “We cannot consider not updating the hospice payment rates by the hospice payment update percentage, nor can we consider updating the hospice payment rates by the hospice payment update percentage absent” MACRA.

Conversely, the Medicare Payment Advisory Commission (MedPAC) recommended in its March report to Congress: “The Congress should eliminate the update to the hospice payment rates for fiscal year 2018.” While CMS will be finalizing the fiscal 2018 proposal in the months ahead, MedPAC’s recommendation should not be of concern to providers, given that Congress has not acted on the same recommendation for previous fiscal years.

Comments Sought

The rule solicits comments regarding the source(s) of clinical information for certifying terminal illness and proposes changes to the Hospice Quality Reporting Program (Hospice QRP), including proposing new quality measures utilizing data collected in the Hospice CAHPS Survey. The proposed rule also discusses new quality measure concepts under consideration for future years, solicits feedback on an enhanced data collection instrument, and describes plans to publicly display quality measure data via the Hospice Compare website “sometime in the summer of CY 2017.” CMS proposes that public display of the Hospice CAHPS Survey data would begin during CY 2018. Deadline for public comments is June 26.

Title of the 43-page proposal: Medicare Program; FY 2018 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements. CMS also issued: Skilled Nursing Facilities: Proposed FY 2018 Payment and Policy Changes; and, Inpatient Rehabilitation Facilities: Proposed FY 2018 Payment and Policy Changes.

Author: Ronald M. Schwartz, Writer, The Remington Report

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