FY 2014 Hospice Proposed Wage Index Rule

CMS has published the proposed rule for the Medicare Program; FY 2014 Hospice Wage Index and Payment Rate Update. Some of the critical components in the proposed rule include:

• Hospices serving Medicare beneficiaries - would see an estimated increase of 1.1 percent or $180 million increase in payments;
• Trends in hospice utilization:
  • The number of Medicare beneficiaries has increased from 513,00 in FY 2000 to over 1.3 million in FY 2012
  • Expenditures have risen from $2.9 billion in 2000 to $14.7 billion in FY 2012
  • Expenditures increase is partially due to an increase in lifetime length of stay from 54 days in 2000 to 86 days in FY 2010;
• Coding - seeking comments on clarifying appropriate coding in hospice claims- policy has been to follow ICD-9 coding guidelines. CMS has clarified providers should not use certain non-specific diagnoses, symptom-classified diagnoses, such as “debility” or “adult failure to thrive.” In FY 2012 these diagnoses were in the top five claims-reported hospice diagnoses. Hospices should code the principal diagnosis using the underlying condition that is the main focus of the patient’s care. CMS again is asking for this information to get a better understanding of who is the hospice patient. Choose the diagnosis “most contributory” to the terminal illness. Claims with this diagnosis of “debility” or “adult failure to thrive” will not be paid and will be returned to the provider;
• Implementation of HIS – CMS is proposing a standardized patient-level data collection instrument called Hospice Item Set (HIS). Proposing to implement July 1, 2014. Data collection to include information on seven new quality measures. Hospices who fail to report quality data via the HIS system in 2014 will have a two percent market basket reduction for FY 2016;
• Implementation of Hospice Experience of Care survey – Hospice CAPHS;
• Payment reform - provides a U-shaped model of resource use which MedPAC has proposed to CMS to use. This would provide an increase in payment at the beginning and at the end of the episode of care, with a reduction in the middle of the episode. Could include a short-stay add-on payment;
• Not recommending at this time a site of service adjustment for hospice patients in nursing facilities - this is under review based on the growth in number of hospice patients in nursing homes, higher number of aide time when compared to a hospice patient at home, overlap in aide services and supplies and examining greater efficiencies; and
• Quality reporting requirements - failure to meet quality reporting requirements will result in a two percent reduction to their market basket update beginning in FY 2014. For FY 2014, the data collection included the QAPI structural measure and NQF #0209 - pain measures. CMS is proposing to discontinue these measures after FY 2014 data collection year.

Contact: Cheryl Udell, cudell@leadingageny.org, 518-867-8871