On April 30 the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule increasing fiscal year (FY) 2016 Medicare payment rates by 1.3 percent or $200 million.
This payment increase would reflect: (i) the distributional effects of the proposed FY 2016 hospice payment update increase of 1.8 percent ($290 million increase), (ii) the use of updated wage index data and the phase-out of the wage index budget neutrality adjustment factor (-0.7 percent/$120 million decrease); and (iii) the proposed implementation of the new Office of Management and Budget Core Based Statistical Areas (CBSA) delineations for the FY 2016 hospice wage index with a one-year transition (0.2 percent/$30 million increase).
The proposed rule addresses the following:
- completion of the phase-out of the budget neutrality adjustment factor in FY 2016 (15 percent reduction);
- alignment of the cap accounting year for the hospice aggregate cap in FY 2017 and beyond to enable implementation of the IMPACT Act provision that mandates the hospice aggregate cap be updated by the hospice payment update rather than using the CPI-U for a specified time;
- adoption of changes to the delineation of Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas, using a blended wage index with a one-year transition that would be calculated as fifty percent of the FY 2015 wage index using the current OMB delineations and fifty percent of the FY 2015 wage index using the revised OMB delineations;
- provision of two different payment rates for routine home care (RHC), which would result in a higher base payment rate for the first 60 days of hospice care and a reduced base payment rate for 61 or more days of hospice care;
- provision of a Service Intensity Add-On (SIA) Payment for FY 2016 and beyond in conjunction with the proposed RHC rates that would be made for a beneficiary’s last seven days of life, in addition to the per diem rate for the RHC level of care if certain criteria were met, although SIA payment would not be available for services to patients residing in SNF/NFs; and
- clarification that hospices are required to report all diagnoses identified in the initial and comprehensive assessments on hospice claims, whether related or unrelated to the terminal prognosis of the individual.
Public comments are due by June 29, 2015.