Medicare Reducing Hospice Pay, Wants Mortality
Certification from Physicians
Pay adjustment will save Medicare $2.9 billion over
five years
April 28, 2009 - The Centers for Medicare &
Medicaid Services (CMS) has issued a proposed rule to update the
Medicare Hospice Wage Index for fiscal year (FY) 2010, which will result
in a decrease of about 1.1 percent in payments to hospices.
The decrease in the hospice payments is the net
result of a 3.2 percent reduction in payments due to the phase-out of a
temporary adjustment used in calculating the wage index, partially
offset by an estimated 2.1 percent increase in the hospital market
basket indicator of costs.
The elimination of this adjustment with a 2-year
phase-out would result in more accurate payments and saves Medicare $2.9
billion over five years, according to the CMS news release.
The phase-out would include a 75 percent reduction
for FY 2010 and ultimately eliminate it in FY 2011. As such, hospice
expenditures are estimated to be about $13 billion in 2010 for more than
3,000 for-profit and not-for-profit hospices across the country, the
agency says.
The Medicare Payment Advisory Commission (MedPAC)
reports that through 2015, hospice expenditures are projected to grow at
a rate that outpaces those projected for hospitals, skilled nursing
facilities, physician services or home health care.
In the Medicare Hospice Wage Index FY 2009 final
rule, CMS laid out a plan to phase-out the budget neutrality adjustment
factor (BNAF) over a three year period, with the first BNAF reduction of
25 percent in the fiscal year 2009 wage index.
With the passage of the American Recovery and
Reinvestment Act, Congress suspended the BNAF reduction set for 2009.
However, the legislation did not affect FYs 2010 and 2011. CMS plans to
reduce the BNAF by 75 percent in FY 2010 and ultimately eliminate it in
FY 2011.
The BNAF was implemented in 1997 as part of an
effort to change from an outdated wage index to a more current and
accurate method for determining hospice payments. In order to minimize
disruption to services this special adjustment was applied.
This proposed regulation, issued on April 21, would
bring the Medicare hospice wage index more in line with that used for
home health agencies, while maintaining the fiscal integrity of Medicare
and allowing continued access to services for its beneficiaries. Both
hospices and home health agencies are home-based benefits, which compete
in the same labor markets.
Physicians Must Say Life Expectancy Less that
Six Months
The rule also proposes to adopt a MedPAC
recommendation that would increase accountability in the physician
hospice certification and recertification process. MedPAC found an
increasing proportion of hospice patients with stays exceeding 180 days
and significant variation in hospice length of stay.
Therefore, CMS is proposing that hospice physicians
who certify or recertify a beneficiary as terminally ill write a short
narrative on the certification form. The narrative would briefly
describe the clinical evidence supporting a life expectancy of six
months or less.
Background by CMS
The Medicare hospice benefit is intended to assist
terminally ill patients, with a prognosis of six months or less if the
disease runs its normal course, to remain in their homes. The focus of
care shifts from curative to palliative care for relief of pain and
symptom management. The law requires that hospice physicians certify
that the patient is terminally ill, with a life expectancy of six months
or less, and periodically recertify that the patient continues to be
terminally ill.
Payment is made to a hospice for each day that an
individual elects the benefit. Payment rates are adjusted to reflect
local differences in area wage levels using a hospice-specific wage
index, which is based on hospital wage data. Overall aggregate payments
to a hospice are subject to a statutorily prescribed aggregate cap
amount.
The number of Medicare-certified hospices has
increased significantly since 1997, up by over 70 percent. The number
of Medicare beneficiaries in hospice care has also grown rapidly from
just over 400,000 in 1998 to close to one million in 2007.
Proposed Rule Details
This proposed rule also solicits comments on a
number of potential policy changes for the future. In order to increase
accountability in the recertification process, the rule seeks comment on
requiring a physician or nurse practitioner to visit every hospice
patient after 180 days on the benefit, and every benefit period
thereafter.
This proposed rule also solicits comments on
broader payment reform, such as alternate methods to calculate the
hospice aggregate cap.
This proposed rule will be published at the Federal
Register on April 24, 2009. Comments are due 60 days after publication
by June 22, 2009. A link to the proposed rule and accompanying documents
will be available at:
www.federalregister.gov/inspection.aspx
