Slight Bump Up in Payments with 2017 Hospice Payment Rule Issued by CMS

August 9, 2016

Late July 29, 2016, the Centers for Medicare & Medicaid Services (CMS) issued its final rule governing Medicare hospice payment and quality reporting requirements for Fiscal Year (FY) 2017.  We have put together the below summary for our clients. We hope the information provided is useful.  Our team at Mueller Prost is available to help answer any questions.

The principal focus of the rule are issues related to the Hospice Quality Reporting Program (HQRP).  The final rule also contains information related to the FY 2017 wage index, payment rates, and cap amount.  CMS estimates the rule to increase payments to hospice programs by $350 million during FY2017.  They have also included history of the hospice benefit and trends in hospice utilization.

FY2017 Hospice Wage Index and Rate Update:

Effective October 1, 2016, CMS will transition to full adoption of the new Office of Management and Budget (OMB) delineations for Metropolitan Statistical Areas (MSAs), representing the 2010 Core-Based Statistical Area (CBSA) values.  Final wage index values applicable for FY 2017 are not publicly available yet but are expected soon on this page of the CMS website

Hospices will see a payment increase of 2.1% -- 0.1% increase over what was projected in the proposed rule. The difference is due to following changes in estimates:

 The following chart shows the base payment rates that CMS is finalizing for FY 2017:
(These values assume compliance with quality reporting requirements.)

Hospice Cap:

CMS has moved forward with a transition of the Cap year to the federal fiscal year, effective for the 2017 Cap year.

The following are the hospice Cap values as calculated by CMS:

  • 2016 Cap:  $27,820.75 (2016 Cap year runs from Nov. 1, 2015, through Oct. 31, 2016)
  • 2017 Cap:  $28,404.99 (2017 Cap year runs from Oct. 1, 2016, through Sept. 30, 2017)
The following is a table with an explanation of the transitional time frames for counting beneficiaries based on whether a hospice utilizes the streamlined or proportional method for calculating its Cap.




As anticipated, much of the final rule deals with the hospice quality reporting program (HQRP).  CMS proposed and finalized:

  • Two new hospice quality reporting program (HQRP) measures
    Collection of the two new measures would impact payments in FY2019 and hospices will begin collecting the data for these measures for all patients admitted on or after April 1, 2017 via four new HIS items. 
  1. Hospice Visits When Death is Imminent - assessing hospice staff visits to patients and caregivers in the last week of life.  This addresses whether a hospice patient and their caregivers’ needs were addressed by the hospice staff during the last days of life. This measure is explained in more detail here.
  2. Hospice and Palliative Care Composite Process Measure - assessing the percentage of hospice patients who received care processes consistent with existing guidelines
  • Comprehensive Patient Assessment Instrument
    CMS is considering developing a new data collection mechanism for use by hospices as previously reported. CMS is not proposing a hospice patient assessment tool at this time; it is still in the early stages of development of an assessment tool to determine if it would be feasible to implement under the Medicare Hospice Benefit. In the development of such a hospice patient assessment tool, CMS stated it will continue to receive stakeholder input from MedPAC and ongoing input from the provider community, Medicare beneficiaries, and technical experts. It is of the utmost importance to CMS to develop a hospice patient assessment tool that is scientifically rigorous and clinically appropriate.  Additionally, it is of the utmost importance to CMS to minimize data collection burden on providers; in the development of any hospice patient assessment tool, CMS states it will ensure that patient assessment data items are not duplicative or overly burdensome to providers, patients, caregivers, or their families.
  • Public Reporting and Hospice Compare Site
    CMS confirmed that public reporting will begin in calendar year 2017, likely spring/summer.  CMS received comments indicating the importance of CAHPS Hospice Survey data being publicly reported with HIS data.  In response, CMS indicated that it is currently evaluating the best method to include both the Hospice Item Set measures and the results of the Hospice CAHPS Survey.  CMS also plans to report an eight-quarter rolling average for Hospice CAHPS public reporting. For the initial report, fewer quarters may be included, but will build up to eight quarters and continue on an ongoing basis. These plans are intended to counterbalance concerns about variability of the data while at the same time including as many hospices as possible on the Compare site.  CMS will announce the timeline for development and implementation of the star rating system in future rule-making. Complete details available here in the Hospice Quality Reporting Program:
    Specifications for the Hospice Item Set-Based Quality Measures.

  • HQRP Measures and Timely Reporting Thresholds
    As noted in the NAHC summary of the proposed rule, CMS is not removing any current HQRP measures.  Relative to the retention of HQRP measures, through this final rule CMS is codifying its policy that once a quality measure is adopted, it be retained for use in the subsequent fiscal year payment determinations until otherwise stated.  CMS further indicated it will propose a measure for removal if meaningful distinctions in quality of care can no longer be made from the measure due to high and unvarying performance. Information on quality measures can be found in the Hospice Quality Reporting Program: Specifications for the Hospice Item Set-Based Quality Measures.

In this final rule, CMS repeated some 2016 and 2017 HQRP information and finalized the reporting requirements that were proposed.  Beginning in CY2016, hospices need to meet a timeliness threshold for HQRP HIS reporting in order to avoid a 2% payment penalty.  The timeliness threshold is currently set at 70% and will jump to 80% for the FY 2019 APU determination and to 90% for the FY 2020 APU determination and subsequent years.  The threshold corresponds with the overall amount of HIS records received from each provider that fall within the established 30-day submission timeframes.  Beginning with the FY 2018 payment determination and for each subsequent payment determination, CMS finalized its policy that a new hospice be responsible for HQRP HIS quality data submission beginning on the date of the CCN notification letter.  CMS retained its prior policy that hospices not be subject to the APU reduction if the CCN notification letter was dated after November 1 of the year involved. 

To meet participation requirements for the FY 2019 APU, hospices must collect CAHPS® Hospice Survey data on an ongoing monthly basis from January 2017 through December 2017 (inclusive). Data submission deadlines for the 2019 and 2020 annual payment updates can be found in the table below. The data must be submitted by the deadlines listed in the table by the hospice’s authorized approved CMS vendor.  If the vendor does not submit the data, the hospice is held responsible.

CAHPS® Hospice Survey Data Submission Dates FY 2018 APU, FY 2018 APU, and FY 2020 APU

Hospices that have fewer than 50 survey-eligible decedents/caregivers in the calendar year reporting period are exempt from CAHPS® Hospice Survey data collection and reporting requirements for the applicable fiscal payment determination.  To qualify, hospices must submit an exemption request form for each year it believes it qualifies for the exemption.

Hospices that want to claim the size exemption are required to submit to CMS their total unique patient count for the period of January 1, 2016 through December 31, 2016. The due date for submitting the exemption request form for the FY 2019 APU is August 10, 2017.

CMS finalized that hospices that receive their CCN after January 1, 2017, are exempted from the FY 2019 APU Hospice CAHPS and those receiving their CCN after January 1, 2018 are exempted from the FY 2020 APU Hospice CAHPS Survey requirements due to newness. This exemption will be determined by CMS. The exemption is for 1 year only as it is now.

This final rule can seem overwhelming.  Our team is here to help!  Contact us or call 800-649-4838 to talk with one of our healthcare specialists. 

How may we help you?


Accounting News