On July 27th, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2023 Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements final rule. See the fact sheet here. This final rule includes the annual payment and quality measure updates, and stakeholder feedback on health equity activities.
Provisions of the final rule go into effect on October 1, 2022.
CMS UPDATES HOSPICE PAYMENTS FOR FY 2023
For FY 2023, CMS finalizes a hospice payment update of 3.8 percent (compared to 2 percent for FY 2022). This is an increase from CMS’s proposed 2.7 percent update for FY 2023.
This increase is due to the use of more recently available data that reflects a market basket percentage increase of 4.1 percent, reduced by a 0.3 percentage point productivity adjustment. Similarly, CMS finalizes a hospice cap[1] for FY 2023 of $32,486.92, a 3.8 percent increase from FY 2022.
Overall, CMS estimates that payments to hospices will increase by $825 million in FY 2023, as compared to FY 2022. CMS finalizes the following hospice payment rates:
Final FY 2023 Hospice RHC, CHC, IRC, and GIP Payment Rates[2]
| Code | Description | FY 2022 Payment Rates | Proposed FY 2023 Payment Rates | Final FY 2023 Payment Rates |
| 651 | Routine Home Care (days 1-60) |
$203.40 | $209.14 | $211.34 |
| 651 | Routine Home Care (days 61+) | $160.74 | $165.25 | $167.00 |
| 652 | Continuous Home Care
Full Rate = 24 hours of care |
$1,462.52
($60.94 per hour) |
$1,505.61 ($62.73 per hour) |
$1,522.04
($63.42 per hour) |
| 655 | Inpatient Respite Care | $473.75 | $486.88 | $492.10 |
| 656 | General Inpatient Care | $1,068.28 | $1,098.88 | $1,110.76 |
These rates would apply to hospices that submit the required quality data.
Payment impacts of the FY 2023 proposal vary by hospice provider type, size, and location in consideration of updated wage data with the cap on wage index decreases.[3] However, overall, CMS estimates an equivalent increase for urban and rural hospices at 3.8 percent.
CMS FINALIZES 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.
Beginning in FY 2023, CMS finalizes its proposal to make permanent a 5 percent cap on any wage index decrease from the prior year, regardless of the reason for the decrease. This means that a geographic areas’ wage index would not be less than 95 percent of the final wage index for the prior fiscal year. The Agency believes that this change will improve predictability in hospice payments and mitigate negative impacts resulting from significant wage index changes. CMS estimates the aggregate impact of changes across all hospice provider types to be zero percent.
CMS also finalizes its proposal to use FY 2023 pre-floor, pre-reclassified hospital inpatient wage index data to calculate the FY 2023 hospice wage index adjustment to the labor portion of the hospice rates.
Additional detail on the hospice wage index data is available on CMS’s website here.
CMS PROVIDES UPDATES ON DEVELOPMENT OF A PATIENT ASSESSMENT INSTRUMENT
CMS provides updates on the development of the Hospice Outcomes and Patient Evaluation (HOPE), a patient assessment instrument.[4] HOPE is intended to support hospice conditions of participation (CoPs), specifically hospices’ quality assessment and performance improvement. This data will also be used to calculate additional quality measures.
CMS’s primary objectives for HOPE is to provide high quality data for The Hospice Quality Reporting Program (HQRP) through standardized data collection, support survey and certification processes, and provide additional clinical data that could inform future payment refinements.
CMS also provides an update on HOPE national beta testing that will continue through 2022. CMS stated in part that the goal of this beta testing it to develop and implement HOPE with minimum burden to stakeholders.
CMS MAKES NO MAJOR UPDATES TO CAHPS, WILL POST CAHPS STAR RATINGS BEGINNING AUGUST 2022
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 is making no changes to the CAHPS Hospice Survey measures, administration procedures, or content.
In this final rule, CMS provides an update on a 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.
RESPONSE TO FEEDBACK ON HEALTH EQUITY INITIATIVES
CMS received numerous comments in response to its request for information on health equity,[5] which focused on best practices for collecting health equity data and a structural composite measure [6] concept to inform future measure development. Commenters supported CMS’s data collection efforts and encouraged greater education efforts surrounding the benefits of collecting and reporting demographic and risk factor data. Conversely, some commenters expressed concern that the use of standardized patient assessment data elements may have unintended consequences.
Further, CMS sought comment on the domains for a future structural composite measure to address access to and quality of hospice care for underserved populations based on data already gathered by hospices. This 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. Commenters were supportive of the development of a health equity structural composite measure but emphasized the need for CMS to engage with stakeholders to develop the measure and consider the potential administrative burden. CMS plans to take stakeholder feedback into account as the agency develops health equity policies for the HQRP and with further refinements to a future structural composite measure.
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This Applied Policy® Summary was prepared by Lauren Fresconi with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact her at lfresconi@appliedpolicy.com or at 302-521-7592.
[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] See Table 1 on pages 35 – 36 of the unpublished rule.
[3] See Table 10 on pages 83 – 84 of the published rule for detailed impacts by hospice type.
[4] HOPE was finalized in the FY 2020 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements final rule (84 FR 38484)
[5] 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.”
[6] CMS defines a composite measure as “a measure that contains two or more individual measures, resulting in a single measure and a single score.” https://www.cms.gov/files/document/blueprint-composite-measures-accountability.pdf