The FY2020 Hospice Final Rule published on 08/06/19 updates the hospice wage index, payment rates, and cap amount for the fiscal year 2020. The rule rebases the continuous home care, general inpatient care and the inpatient respite care per diem payment rates in a budget-neutral manner to more accurately align Medicare payments with the cost of providing care. In addition, the rule modifies the election statement by requiring an addendum that includes information aimed at increasing coverage transparency for patients under a hospice election. Finally, this rule includes changes to the Hospice Quality Reporting Program.

The new regulations will be effective October 1, 2019, with the exception of the election statement addendum which will be effective October 1, 2020.

1. The hospice payment update percentage for FY2020 is finalized as proposed at 2.6 %.

    • The update is calculated annually by the inpatient market basket percentage increase for the fiscal year.
    • The hospice payment update percentage for FY 2020 is equal to 6 percent for hospices that submit the required quality data and 0.6 percent for hospices that do NOT submit the required data.

2. Rebasing of the per diem payment rates for 3 of the 4 hospice levels of care: Continuous Home Care (CHC), Inpatient Respite care (IRC) and General Inpatient (GIP) are included in the final rule as proposed, in order to better align payments with the costs of providing care. In addition, both tiers of the Routine Home Care (RHC) payment rates will be reduced by 2.72%, instead of the proposed 2.71%, for FY2020, in order to offset the increase in the payment rates for the CHC, GIP and IRC levels of care to maintain budget neutrality. This is not a rebasing of the Routine rates, it is simply adjusting the rates to offset the rebasing of CHC, IRC & GIP in a budget neutral manner.

After considering all comments that resulted from the proposed rule, CMS moved forward with the rebasing of the payment rates for CHC, GIP and IRC and the 2.72% reduction in the RHC payment rates.

Table 10: FY 2020 Hospice RHC Payment Rates

Level of Care

FY2019 Per Diem Payment Rates – reduced by 2.72% FY 2019 Rebase Payment Rates* SIA Budget Neutrality Adjustment Factor Wage Index Standardization Factor** FY 2020 Hospice  Payment Update

FY 2020 Payment Rates

RHC days 1-60


$190.91 X 0.9924 X 1.0006 X 1.026


RHC days 61+


$150.02 X 0.9982 X 1.0005 X 1.026


Table 11: FY 2020 Hospice CHC, IRC, and GIP Payment Rates

Level of Care

FY2019 Per Diem Payment Rates FY 2019 Rebase Payment Rates Wage Index Standardization Factor* FY 2020 Hospice  Payment Update

FY 2020 Payment Rates



$1,363.26($56.80/hr) X 0.9978 X 1.026

$1,395.63 ($58.15/hr)



$437.86 X 1.0019 X 1.026




$992.99 X 1.0024 X 1.026


3. The final rule changes the hospice wage index to remove the 1-year lag in data by using the current year’s hospital wage index as proposed. This means the FY2020 pre-floor, pre-reclassified hospital wage index will be used as the wage adjustment to the labor portion of the hospice rates instead of FY2019 effective October 1, 2019 through September 30, 2020.  The appropriate wage index value is then applied to the labor portion of the hospice payment rate based on the geographic area in which the beneficiary resides when receiving RHC or CHC. The appropriate wage index value is applied to the labor portion of the payment rate based on the geographic location of the facility for beneficiaries receiving GIP or IRC.

4. The hospice Cap Amount for FY 2020 will be $29,964.78, which is equal to the FY 2019 cap amount ($29,205.44) updated by the FY 2020 hospice payment update percentage of 2.6 percent.

5. The final rule includes modifications of the hospice election statement content requirements at § 418.24(b) and adding a new addendum requirement to the hospice election statement to increase coverage transparency for patients under a hospice election and to facilitate communication between hospices and non-hospice providers.

The additions to the current election statement include:

  • Information about the holistic, comprehensive nature of the Medicare hospice benefit.
  • A statement that, although it would be rare, there could be some necessary items, drugs, or services that will not be covered by the hospice because the hospice has determined that these items, drugs, or services are to treat a condition that is unrelated to the terminal illness and related conditions.
  • Information about beneficiary cost-sharing for hospice services.
  • Notification of the beneficiary’s (or representative’s) right to request an election statement addendum that includes a written list and a rationale for the conditions, items, drugs, or services that the hospice has determined to be unrelated to the terminal illness and related conditions and that immediate advocacy is available through the BFCC-QIO if the beneficiary (or representative) disagrees with the hospice’s determination.

The new requirement for the election statement addendum, upon request by the beneficiary (or representative), is to  include a list and rationale for the conditions, items, services and drugs that the hospice has determined as unrelated to the terminal illness and related conditions.

  • Hospices are required to provide the election statement addendum in writing, to the beneficiary (or representative), non-hospice providers that are treating such conditions and/or Medicare contractors, if requested.
  • CMS has finalized the time for the hospice provider to provide the addendum, if requested at the time of election, at 5 days and 72 hours if requested during the course of hospice care. In addition, if the patient dies with 5 days of the hospice election the hospice is not required to provide the addendum in writing.  If there is a request for the addendum then the presence of the signed addendum/updated addendum in the medical record would be required as a new condition for payment.
  • Hospices would be required to issue an updated addendum to the beneficiary if changes in the plan of care determine new illness or condition has arisen and must reflect whether or not items, services and supplies related to the new illness or condition will be provided by the hospice.
  • CMS included hospices can develop/design the addendum to meet their needs, similar to how hospice develop their own election statement however, the addendum MUST be titled, “Patient Notification of Hospice Non-covered Items, Services and Drugs” with the specific content required in the addendum outlines in the rule.
  • The Hospice election statement addendum is only required to be provided when requested for the Medicare beneficiary although, some hospices may choose to provide the addendum to all of their hospice patients.

At § 418.24(b), we are finalizing the provisions regarding the election statement modifications and the election statement addendum. In addition, we made several revisions to § 418.24. Specifically, we redesignated paragraphs (c) through (f) as paragraphs (d) through (g). This redesignation would affect two cross-references in §418.26(c) (2) and §418.28(c) (2). As a result, we made conforming changes to accompany the redesignations in §418.24. Likewise, at §418.3, we define the term BFCC-QIO as the Beneficiary and Family Centered Care Quality Improvement Organization. Because these conforming changes were not proposed in the proposed rule, we are adopting them here under a “good cause” waiver of proposed rulemaking. The specific changes we are making in the regulations simply codify the final policies we described in the proposed rule and do not reflect any additional substantive changes.

6. Changes to the Hospice Quality Reporting Program

    • After considering the comments received in response to the proposed rule CMS finalized the proposal to change the name of the hospice assessment tool to the Hospice Outcomes & Patient Evaluation (HOPE) – previously title HEART.
    • CMS is migrating to a new internet Quality Improvement and Evaluation System (iQIES) as soon as FY 2020 that will enable real-time upgrades, and designating that system as the data submission system for the Hospice QRP. CMS commented that they will provide further information regarding the migration and any future system of record changes via sub-regulatory mechanisms to make this transition as smooth as possible.
    • CMS has identified two “high priority” areas to be addressed by claims-based measure development: “Potentially avoidable hospice care transitions” and “Access to levels of hospice care measure”. CMS requested public comment on ways to further develop these two measure concepts and different measure concepts that fall under these “high priority” areas within the proposed rule. CMS reported in the final rule they will continue collection of data and complete additional testing and will make a determination about the public reporting of Measure 2 of the “Hospice Visits when Death is Imminent” measure pair and expect to complete their analysis by the end of FY 2020.

HPS is dedicated to supporting Hospice agencies as they adjust to the FY2020 Hospice Final Rule, effective October 1, 2019. Our team of seasoned industry professionals is available to answer any questions you might have about the new regulations. If your agency is subject to a Targeted Probe and Educate (TPE) review, we are here to help. Our Targeted Probe and Educate consulting team has assisted agencies through numerous levels of review including ZPIC extended reviews, ADRs and RAC audits. We are currently assisting agencies nationwide through TPE.

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