Last week, the Centers for Medicare and Medicaid Services (CMS) issued its final rule that updates Medicare hospice payments and the aggregate cap amount for Fiscal Year (FY) 2022. This rule rebases the hospice labor shares and clarifies certain aspects of the hospice election statement addendum requirements. In addition, it finalizes changes to the hospice conditions of participation and Hospice Quality Reporting Program (HQRP). The final rule also finalizes a Home Health Quality Reporting Program (HH QRP) policy that becomes effective on Oct. 1, 2021, to prepare for public reporting beginning in January 2022.

Under the final rule, hospices will see a 2.0 percent increase ($480 million) in their payments for FY 2022 relative to FY 2021. This is a result of the 2.7 percent market basket percentage increase reduced by a 0.7 percentage point productivity adjustment. Hospices that fail to meet quality reporting requirements receive a two-percentage point reduction to the annual hospice payment update percentage increase for the year.

The FY 2022 hospice payment updates also include an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made to a hospice annually. The cap amount for FY 2022 is $31,297.61 (FY 2021 cap amount of $30,683.93 increased by 2.0 percent). As a result of the changes mandated by Division CC, section 404 of the Consolidated Appropriations Act, 2021, the rule finalizes conforming regulation text changes at section 418.309 to reflect the new language added to section 1814(i)(2)(B) of the Act, which extends the years that the cap amount is updated by the hospice payment update percentage rather than the consumer price index.

CMS also makes permanent some regulatory waivers, as proposed. These would permit skills competencies to be assessed by observing an aide performing the skill with either a patient or a pseudo-patient as part of a simulation, essentially allowing hospices to utilize pseudo-patients.

The rule also amends the requirements for competency evaluation of aides, allowing the hospice to focus on the specific deficiency and related skill(s) instead of completing another full competency evaluation if an area of concern is verified by the hospice during the registered nurse (RN) on-site supervisory visit.

Hospices will also see two changes in the HQRP. CMS is removing the seven Hospice Item Set (HIS) process measures and adding the Hospice Visits in Last Days of Life (HVLDL) and Hospice Care Index (HCI).

The rule also includes additional Medicare hospice payment policies, a request for information (RFI) on the Closing the Health Equity Gap in the HQRP initiative, and a second RFI on the Fast Healthcare Interoperability Resources in Support of the HQRP initiative.

A comprehensive CMS fact sheet on the hospice final rule is available here, and the rule in its entirety is here.

LeadingAge National's summary of the rule prior to the final version is available here. LeadingAge NY is reviewing the rule in more detail, but it appears as though a majority of the proposals were finalized as proposed, including the proposal to add the claims-based Hospice Composite Measure and HVLDL to public reporting and replace the seven HIS measures with the HIS comprehensive assessment measure.

The rule becomes effective Oct. 1, 2021.

Contact: Meg Everett, meverett@leadingageny.org, 518-929-9342