Medicare payments to hospices will see a 2.5 percent increase in FY 2012 the Centers for Medicare & Medicaid Services (CMS) announced in a final rule at the end of July. The final rule also implements Affordable Care Act requirements.
The wage increase is part of CMS' continued phase out of the BNAF, the hospice wage index Budget Neutrality Adjustment Factor. The phase out is in its third year of a seven-year process put in place to minimize disruption to services.
[See also: Hospices should be scrutinized, says OIG.]
CMS' estimated hospice payments for FY 2012 are the result of a 3 percent increase in the "hospital market basket," an indicator of industry-related price increases, off-set by an estimated 0.5 percent decrease in payments to hospices due to the updated wage index data.
"We are pleased with the hospital market basket increase for hospices for FY 2012," said Judi Lund Person, vice president, compliance and regulatory leadership at the National Hospice and Palliative Care Organization. "However, the percentage increase is tempered by the reduction in the Budget Neutrality Adjustment Factor, which reduces the market basket to 2.5 percent. With the ever-increasing regulatory requirements, many of which require more staff or IT investments, there is increased expense for hospice providers and this increase will help providers cover those increased costs."
In addition to the wage increase announcement, CMS' final rule also:
• Changes the way it counts hospice patients for the 2012 cap accounting year and beyond. The final policy for counting the number of Medicare hospice beneficiaries in care for a given cap year calculates the cap based on the number of days of care the patient received in that cap year for each hospice. This rule also finalized that the new counting method be applied to past cap years in certain instances.
• Allows hospice providers who do not want a change in their patient counting method to elect to continue using the current method.
• Allows any hospice physician to perform the face-to-face encounter regardless of whether that same physician recertifies the patient's terminal illness and composes the recertification narrative.
• Implements a hospice quality reporting program, which includes a timeframe for reporting, as required by section 3004 of the ACA. The measures that are being adopted in this final rule for the FY 2014 program are one measure endorsed by the National Quality Forum related to pain management and one structural measure that assesses whether a hospice administers a Quality Assessment and Performance Improvement (QAPI) program that contains at least three indicators related to patient care. Hospices will be required to begin collecting quality data in October 2012 for submission in 2013. Hospices may voluntarily begin collecting data in October 2011 for submission in 2012. Hospices that don't report quality data in 2013 will have their market basket update reduced by two percentage points in FY 2014.