The PROPOSED Hospice Payment Rule was released on April 30, 2015 and addresses payment reform of the routine home care (RHC) level of care by providing a payment of two separate rates. One rate will be for care provided from day 1 through day 60 of an episode of hospice care and a second rate for days 61 and later.

CMS has allowed for a Service Intensity Add-on (SIA) that would be added to RHC payment for Registered Nurse (RN) and social work visits provided during the last 7 days of life. This proposed change, SIA, appears on the surface to be a great change, but will the adjustment amount be adequate and why will it not be extended to patients that are requiring these services in a nursing facility?

The SIA would be applied if the following criteria are met:

  • The day is billed as a RHC level of care day;
  • The day occurs during the last 7 days of life (and the beneficiary is discharged dead);
  • Direct patient care is provided by a RN or a social worker that day (in person); and
  • The service is not provided in a SNF/NF.

The proposed SIA would be equal to the Continuous Home Care (CHC) hourly payment rate multiplied by the amount of direct patient care provided by a RN or social worker for up to 4 hours total per day, as long as the aforementioned criteria are met.

The final year of the 7-year phase out of the Budget Neutrality Adjustment Factor (BNAF) will be imposed in 2016 and have an impact of MINUS 0.6 percentage points on payment rates. Additional wage index changes have the impact of further reducing payment rates by MINUS 0.1 percentage points. CMS also proposes to implement the new labor market delineations based on the 2010 Census: CMS plans the phase in of the 2010 Core Based Statistical Area (CBSA) wage index values for FY2016 through a blended rate that reflects 50% of the wage index values using the 2000 CBSAs and 50% of the wage index values under the 2010 CBSAs.

The charts below represent the proposed FY2016 payment rates for CHC, IRC, and GIP and the two rates for RHC. These rates would be reduced in cases where hospices fail to meet the quality reporting requirements applicable to the FY2016 payment update year; the rates also do not account for the sequester.

Proposed FY 2016 Hospice Payment Rates for RHC (includes budget neutrality adjustment to account for SIA)

Code Description Labor Non labor Proposed Rates Proposed SIA budget neutrality factor adjustment (1-0.0081) Proposed FY 2016 hospice payment update percentage Proposed FY2016 Payment Rates
651 Routine Home Care (days 1-60) 68.71 31.29 $187.63 X 0.09853 X 1.018 $ 188.20
651 Routine Home Care (days 61+) 68.71 31.29 $145.21 X 0.9967 X 1.018 $ 147.34

Proposed FY2016 Hospice Payment Rates for CHC, IRC, and GIP

Code Description Labor Portion Non-labor FY2015 Payment Rates Proposed FY2016 hospice payment update of 1.8 percent Proposed FY 2016 Payment Rate
652 Continuous Home Care

Full Rate = 24 hours of care

$=39.44 FY2016 hourly rate

68.71 31.29 929.91 X 1.018 $ 946.65
655 Inpatient Respite Care 54.13 45.87 $164.81 X 1.018 $ 167.78
656 General Inpatient Care 64.01 35.99 $ 708.77 X 1.018 $ 721.53

This payment rule also outlines plans to modify the cap update, beginning with the 2016 cap year, to reflect the changes included in the IMPACT Act. The cap update would no longer be calculated using the CPI-U for medical care but rather would be updated using the hospice payment update percentage for the applicable year. CMS is proposing to align the Inpatient and Aggregate Cap accounting years with the federal fiscal year (Oct. 1 through Sept. 30) beginning in federal fiscal year 2017. As part of this update, CMS would align the timeframes for counting beneficiaries and payments to the federal fiscal year as well. CMS further proposed to shift the timeframes for counting days of care for purposes of calculating the inpatient cap to the federal fiscal year. A proposed transition plan is discussed for shifting these counts to fully line up with the federal fiscal year by 2018.

The 2015 aggregate cap will be $27,135.96; the anticipated 2016 cap is $27,624.41.

The Proposed Regulation can be found at the following link: Proposed Rule