Last week, the Centers for Medicare and Medicaid Services (CMS) issued a final rule (CMS-1733-F) that updates fiscal year (FY) 2021 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. In recognition of the significant impact of the COVID-19 public health emergency and the limited capacity of health care providers to review and provide comment on extensive proposals, CMS has limited annual hospice rulemaking required by statute to essential policies, including Medicare payment to hospices, as well as policies that reduce provider burden and may help providers in the COVID-19 response.

Under 42 C.F.R. 418.306(c), CMS is finalizing the adoption of the revised geographic delineations provided by the Office of Management and Budget (OMB), which are used to identify a beneficiary’s location to calculate the wage index, and applying a 5 percent cap to wage index decreases from FY 2020 to FY 2021.

For FY 2021, the hospice payment update percentage is 2.4 percent ($540 million). This is a result of the 2.4 percent market basket percentage increase reduced by a 0.0 percentage point multifactor productivity adjustment. Hospices that fail to meet quality reporting requirements receive a 2 percentage point reduction to the annual market basket percentage increase for the year. The hospice payment system includes a statutory aggregate cap. The aggregate cap limits the overall payments made to a hospice annually. The final hospice cap amount for the FY 2021 cap year is $30,683.93, which is equal to the FY 2020 cap amount ($29,964.78) updated by the final FY 2021 hospice payment update percentage of 2.4 percent.

CMS is also providing links to updated examples of the hospice election statement and the hospice election statement addendum that reflect the changes finalized in the FY 2020 hospice final rule (84 FR 38520) in order to assist hospices in understanding the content requirements for the hospice election statement and addendum, effective Oct. 1, 2020. These requirements were finalized in order to increase coverage transparency for beneficiaries electing the Medicare hospice benefit.

For the FY 2021 Medicare hospice payment rule and hospice election statement templates, click here.

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