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The Hospice FY2021 Final Wage Index and Payment Rate Update from the Centers for Medicare & Medicaid Services (CMS) with changes for hospice providers is summarized below. The new regulations will be effective October 1, 2020.

The overall economic impact of this final rule is estimated to be $540 million in increase payments to hospices for FY2021.

 

RATE INCREASES

 

The Hospice Payment Rate Increase for FY 2021 is 2.4% which is a slight decrease from the 2.6% in the proposed rule.

Level of Care FY2020  Payment Rates SIA Budget Neutrality Factor

Wage Index Standardization Factor

FY 2021 Payment Update  FY 2021 Payment Rates
Routine Home Care (days 1-60) $194.50 1.0002 1.0002 X 1.024 $199.25
Routine Home Care (days 61+) $153.72 1.0001 1.0004 X 1.024 $157.49

 

Level of Care  FY2020  Payment Rates Wage Index Standardization Factor FY 2021 Payment Update FY 2021 Payment Rates
GIP $1,021.25 0.9999 X 1.024 $1,045.66
Respite $450.10 1.0004 X 1.024 $461.09
CHC

Full rate = 24 hr.

$1,395.63 1.0023 X 1.024 $1,432.41

($ 59.68/hour)

Hospices that fail to meet the quality reporting requirements will be 2% point lower than the values referenced above

 

A Service-Intensity Add-on (SIA) is provided to hospices for up to four hours per day in the final seven days of life when registered nurses and social workers provide care to patients on routine home care (RHC) and is paid at the hourly rate for continuous home care (CHC) which will be $59.68/hr. for FY2021.

CMS decided NOT to Eliminate the SIA Budget Neutrality Factor from the payment calculation for Routine Home Care (RHC) for FY2021, as proposed, and will continue to monitor for future rule making.

The Hospice Aggregate Cap Amount for FY2021 will be $30,683.93. The Hospice Aggregate Cap is equal to the FY2020 Cap value of $29,964.78 multiplied by the 2.4% payment update.

 

WAGE INDEX/CBSA CHANGES

 

CMS finalized changes to the hospice wage index by adopting the most recent Office of Management and Budget (OMB) statistical area delineations, with a 5 percent cap on the wage index decreases in the FY2021 final rule for the hospice payment update. CMS adjusted the federal rates to account for differences in area wage levels. The final rule adopted the revised geographic delineations provided by the Office of Management and Budget, which are used to identify a beneficiary’s location when calculating the hospice wage index.

The core-based statistical area (CBSA) codes are used in determining the wage-index adjustment applied to hospice payments. The wage index value is applied to the labor portion of the hospice payment rate based on the geographic area in which the beneficiary resides when receiving routine home care (RHC) or continuous home care (CHC). The wage index value is applied to the labor portion of the payment rate based on the geographic location of the facility for beneficiaries receiving general inpatient care (GIP) or inpatient respite care (IRC) therefore, it is critical to verify claims billed with the code that correctly identifies the county where the patient care was delivered.

  • 34 counties will change from Urban to Rural Status
  • 47 counties will change from Rural to Urban Status
  • 19 Counties will move from one Urban CBSA to a newly or modified CBSA

 

New Hospice Election Statement requirements and newly added Election Statement Addendum

 

  • The implementation of the Modified Hospice Election Statement & Hospice Election Addendum requirements finalized in the FY2020 final rule will go into effect for all hospice elections on or after October 1, 2020. CMS provided a model example election statement and election statement addendum in the proposed rule and updated the model examples for both the modified election statement and the election statement addendum in the final rule.

 

HPS is working to keep Hospices informed of all the details related to the changes with the 2021 Final Rule. HPS Alliance members have access to the webinar regarding this final rule which includes further details.