Home Health & Hospice

CMS Releases Final Rule on FY 2014 Hospice Payment

Homecare Insider, August 12, 2013

The Centers for Medicare and Medicaid Services (CMS) has issued the FY 2014 final rule: Hospice, Medicare Program; FY2014 Hospice Wage Index and Payment Rate Update; Hospice Quality Reporting Requirements; and Updates on Payment Reform, which was published on the Federal Register on August 7. The following are some of the key components that hospice agencies should be aware of:

Payment Rates and Wage Index
Hospice providers will see a payment increase of approximately 1%. This percentage is based on a hospital market basket increase (2.5%), reduced by a productivity adjustment (.5%) and by 0.3 percentage point as mandated by the Affordable Care Act. This is also offset by a 0.7% decrease due to updated wage data and the fifth year of CMS’ seven-year phase-out of its wage index budget neutrality adjustment factor (BNAF).

The final rule also notes that CMS will update the hospice per diem rates for FY 2014 and following years through the annual hospice rule or notice, rather than through a Change Request (as it has been done in the past).

The FY 2014 wage index tables for rural and urban areas are available in the downloads section of the CMS Medicare hospice website.

BNAF Phase-Out
This final rule marks the fifth year of the seven-year BNAF phase-out by reducing the BNAF by 15 percent. This results in a total reduction of 70 percent since FY 2010. According to CMS, the BNAF, implemented in 1997, authorized a shift from the outdated wage index to today’s more current and accurate method for determining hospice payments.

Coding Clarifications
Coding clarifications within the final rule include:

  • Current policy requires that hospices use ICD-9-CM coding guidelines.
  • Hospice providers should not use certain non-specific diagnosis or diagnoses that are not principal diagnoses. Hospices should code the principal diagnosis using the underlying condition that is the main focus of the patient’s care.
  • Claims submitted on or after Oct. 1, 2014, hospice claims with either “Debility” or “Adult Failure to Thrive (AFTT)” listed as the principal diagnosis will be returned to provider.
  • Warnings that certain dementia codes are inappropriate as principle diagnosis on claims.

Hospice Quality Reporting
Under section 3004 of the Affordable Care Act, hospices that fail to meet quality reporting requirements will receive a two percentage point reduction to their market basket update beginning in FY 2014. For the FY 2014 payment determination, hospices reported two measures:

  • The NQF #0209/Pain Management measure
  • The Structural measure on participation in a Quality Assessment and Performance Improvement (QAPI) program

According to the final rule, these two quality measures will be eliminated beginning with the FY 2016 payment determination.

For FY 2014, CMS will finalize the implementation of a standardized patient-level data collection instrument called the Hospice Item Set (HIS). The implementation of HIS is proposed for July 2014. With this implementation, the quality measured that will be collected and submitted via HIS are:

  • NQF #1617 Patients Treated with an Opioid who are Given a Bowel Regimen
  • NQF #1634 Pain Screening
  • NQF #1637 Pain Assessment
  • NQF #1638 Dyspnea Treatment
  • NQF #1639 Dyspnea Screening
  • NQF #1641 Treatment Preferences
  • NQF #1647 Beliefs/Values Addressed (if desired by the patient)

In regard to the HIS, the final rule makes several clarifications, including the following:

  • HIS is not a patient assessment
  • It will not be administered to the patient and/or family or caregivers during the initial assessment visit
  • It will not replace a hospice’s current initial patient assessment.
  • Providers will be required to perform an admission and discharge HIS
  • CMS will provide additional guidance and training materials prior to implementation

This final rule also details CMS’s development of a Hospice Experience of Care Survey for informal caregivers of hospice patients. The survey includes questions on hospice provider communications with patients and families, hospice provider care, and overall rating of hospice. According to the final rule, hospices will be required to begin using the survey in 2015. Initially by participating and reporting data from a dry run for at least one month in the first quarter of 2015, and then providing continuous data collection beginning in April 2015.

To read the complete final rule on the Federal Register, click here.