On March 30th, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2023 proposed Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements rule. See the fact sheet here. This proposed rule includes the annual payment and quality measure updates, and a request for feedback on health equity activities.

This proposed rule is scheduled to be published in the Federal Register on April 4, 2022, and comments are due by May 31, 2022.

CMS Proposes Permanent Cap on Wage Index Changes

CMS uses the hospice wage index to adjust hospice Medicare payment rates to reflect local differences in wage levels, based on the location where hospice services are provided. Regulations at 42 C.F.R. § 418.306(c) require each labor market to be based on the most current hospital wage data, including changes to Metropolitan Statistical Areas (MSAs). Generally, the Office of Management and Budget (OMB) generally revises statistical areas every decade, based on updated census counts.

Beginning FY 2023 and thereafter, CMS proposes to make permanent a 5 percent cap on any wage index decrease from the prior year, regardless of the reason for the decrease.

This is in consideration of the fact that yearly wage index fluctuations occur beyond a providers’ control (such as the COVID-19 pandemic). CMS believes that this proposal would increase predictability of Medicare hospice payment for providers.

CMS estimates the aggregate impact of changes across all hospice provider types to be zero percent, due to the standardization factor. But as noted below, overall impacts vary by hospice provider type and location. CMS anticipates that most hospices will not experience year-year wage index declines greater than 5 percent on the basis that the wage index is a measure of the labor’s value in a specific market relative to the national average.

Hospice wage index data is available on CMS’ website here.

CMS Predicts Increase in Hospice Payments for FY 2023

For FY 2023, CMS proposes a hospice payment update of 2.7 percent (compared to 2 percent for FY 2022). Overall, CMS estimates that payments to hospices will increase by $580 million in FY 2023, as compared to FY 2022. The proposed hospice cap for FY 2023 is $32,142.65.[1] CMS proposes the following hospice payment rates:

Proposed FY 2022 Hospice RHC, CHC, IRC, and GIP Payment Rates

Code	Description	FY 2022 Payment Rates	Proposed FY 2023 Payment Rates
651	Routine Home Care (days 1-60)	$203.40	$209.14
651	Routine Home Care (days 61+)	$160.74	$165.25
652	Continuous Home Care Full Rate = 24 hours of care	$1,462.52 ($60.94 per hour)	$1,505.61 ($62.73 per hour)
655	Inpatient Respite Care	$473.75	$486.88
656	General Inpatient Care	$1,068.28	$1,098.88

  These rates would apply to hospices that submit the required quality data. Source: CMS.

Payment impacts of the FY 2023 proposal vary by hospice provider type and location in consideration of updated wage data with the cap:

• Freestanding rural, government-based hospices are projected to receive an overall 2.1 percent payment update.
• freestanding urban, government-based hospices are projected to receive a 3.0 percent payment update in consideration of updated wage data with the cap.

Overall, urban hospices fare slightly better than their rural counterparts, with an overall 2.7 percent estimated payment update, while rural hospices are estimated to receive an overall 2.6 percent payment update.

CMS Proposes No New Quality Measures for HQRP

The Hospice Quality Reporting Program (HQRP) specifies the quality reporting requirements for Hospices includes the Hospice Item Set (HIS), administrative data, and the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey. The Consolidated Appropriations Act (CAA) 2021 requires that CMS change the payment reduction for Hospices failing to meet the quality reporting requirements from 2 to 4 percentage points beginning in FY 2024 (based on CY 2022 quality data). CMS does not propose any new quality measures for FY 2023 in this proposed rule but will work to implement the two new measures using claims data and other changes finalized in the FY 2022 final rule.[2]

CMS Proposes No Major Updates to CAHPS, Will Post CAHPS Star Ratings Beginning This August

The Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey is used to collect data on the experiences of hospice patients and their primary caregivers as part of the HQRP. CMS announced no changes to the CAHPS Hospice Survey measures, administration procedures, or content. In the proposed rule, CMS does give an update on the CAHPS Hospice Survey Mode Experiment, which is testing the addition of a web-based mode to the CAHPS Hospice survey. Over a six- to seven-month period, CMS sampled 15,000 eligible caregivers from 50 hospices and is continuing to analyze the results of the experiment.

In the FY 2022 Hospice final rule, CMS finalized a policy to display Hospice CAHPS Survey Star Ratings. Star Ratings will be publicly reported on the Medicare Care Compare website beginning in August 2022.

Feedback Requested on Health Equity Initiatives

CMS is exploring how poor access to care and lower quality care delivery contribute to health inequities in recognition of the fact that underserved communities often experience worse health outcomes. CMS reaffirmed its commitment to reducing the equity gap within its programs and is working to advance health equity[3] through efforts aimed at eliminating avoidable differences in health outcomes for underserved and disadvantaged communities. CMS is soliciting feedback in the following areas:

• Hospice efforts to recruit staff, volunteers, and board members from diverse populations, efforts to bridge cultural gaps, and how hospices measures whether their efforts impact health equity;
• Hospice efforts to identify barriers to access to care and the challenges hospices face in collecting this data;
• Hospice strategies for collecting self-reported equity data and its use in informing equity initiatives; and
• Hospice strategies for measuring the impact of their health equity initiatives through qualitative data and analysis.

CMS also proposes a structural composite measure to address access to and quality of hospice care for underserved populations based on data already gathered by hospices. This proposed measure would score hospice programs based on their activities in different domains, such as the role of health equity and community engagement in a hospice’s strategic plan.

CMS seeks comment on the subject and content of the suggested domains, how to score the domains when no action has been taken or no action has been completed, and how such scoring should be published and used once completed.

 

[1] The Consolidated Appropriations Act of 2021 (Pub. L. 116-260) extended a provision to update the hospice cap based on the hospice payment update percentage rather than the consumer price index for urban consumers (CPI-U) for accounting years ending after September 30, 2016 and before October 1, 2030. Prior to this enactment, the hospice cap update would have reverted back to the CPI-U cap amount beginning on October 1, 2025.

[2] The two new measures using claims data finalized in the FY 2022 Hospice Wage Index and Payment Rate Update final rule (86 FR 42552) were the Hospice Visits in the Last Days of Life (HVLDL) and Hospice Care Index (HCI) measures.

[3] CMS defines health equity as “the attainment of the highest level of health for all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes.”