Hospice wage index Proposed rule issued for fiscal year 2012

Medicare and Medicaid

Hospice wage index Proposed rule issued for fiscal year 2012 CMS has proposed the new hospice wage index for fiscal year (FY) 2012 which would increase Medicare payments to hospices by an estimated 2.3 percent for FY 2012, and CMS expects Medicare hospice payments to increase by $310 million overall in FY 2012. The proposed rule also establishes a new quality reporting system, as authorized by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148).
Proposed changes

While CMS projects that the market basket update and updated wage data would increase payments by a total of $400 million, this increase would be offset partially by a $90 million reduction resulting from the continued phase-out of the wage index budget neutrality adjustment factor (BNAF). For FY2012, CMS proposes to continue with this phase-out of the BNAF, with an additional 15 percent BNAF reduction, for a total BNAF reduction in FY 2012 of 40 percent. CMS plans to continue with the BNAF phase-out with successive 15 percent reductions from FY 2013 through FY 2016.

Under the proposed quality reporting system, hospices would be required to submit data on quality measures to CMS or have their annual increase factor reduced by 2 percentage points, beginning in FY 2014. The proposed measures include one item endorsed by the National Quality Forum related to pain management and one structural measure related to participation in specific Quality Assessment and Performance Improvement (QAPI) programs. This measure includes at least three quality indicators related to patient care.

The proposed rule would also modify the face-to-face encounter requirement for hospices set forth in PPACA, by proposing to remove the limitation that requires the hospice physician who performs the face-to-face encounter and attests to that encounter be the same physician who certifies the patient’s terminal illness. CMS is proposing that any hospice physician may perform the face-to-face encounter, regardless of whether that physician recertifies the patient’s terminal illness and composes the recertification narrative.
Hospice cap

Under Federal law, CMS is required to impose a limit on the aggregate Medicare payments a hospice provider receives annually. The proposed rule alters the way hospice patients are counted for purposes of the 2012 cap year and in the future, while continuing to define the cap year as November 1st to October 31st. CMS proposes that the new counting method be applied to past years in certain instances while also offering that hospices which have their cap determination calculated using the patient-by patient proportional methodology for any cap year before the 2012 cap year could continue to have their cap calculated using the patient-by-patient proportional methodology for the 2012 cap year and all subsequent cap years.

Under the new counting method, CMS proposes to revise the methodology set forth at 42 U.S.C. 418.309(b)(1)to adopt a patient-by-patient proportional methodology when computing hospices’ aggregate caps. CMS also proposes to “grandfather” in the current streamlined methodology set forth in 42 U.S.C. 418.309(b)(1)for those hospices that elect to continue to have the current streamlined methodology used to determine the number of Medicare beneficiaries in a given cap year. A hospice may elect the streamlined methodology no later than 60 days following the receipt of its 2012 cap determination.

CMS will accept comments on the proposed rule until June 27, 2011.

For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.

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