On July 30, 2024, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2025 final Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements rule. See the fact sheet here. In this rule, CMS finalizes proposals to:
- Update hospice payment by 2.9 percent;
- Update the hospice wage index based on revised census data;
- Implement the Hospice Outcomes and Patient Evaluation (HOPE) instruments, in addition to other quality measures updates; and
- Make technical changes to hospice Conditions of Participation (COPs) and changes to regulatory text regarding election of hospice care.
CMS also responds to feedback on a payment mechanism for high intensity palliative care services.
This final rule is scheduled to be published in the Federal Register on August 8, 2024.
CMS PREDICTS INCREASE IN HOSPICE PAYMENTS FOR FY 2025
For FY 2025, CMS finalizes a hospice payment update of 2.9 percent, rather than 2.6 percent as proposed. Overall, CMS estimates that payments to hospices will increase by $790 million in FY 2025, as compared to FY 2024, revised from a $705 million estimated in the proposed rule. The finalized hospice cap for FY 2025 is $34,465.34, compared to the proposed cap of $34,364.85. CMS finalizes the following hospice payment rates:
Finalized FY 2025 Hospice RHC, CHC, IRC, and GIP Payment Rates
| Code | Description | FY 2024 Payment Rates | Proposed FY 2025 Payment Rates[1] | Final FY 2025 Payment Rates[2] |
| 651 | Routine Home Care (days 1-60) |
$218.33 | $222.83 | $224.62 |
| 651 | Routine Home Care (days 61+) | $172.35 | $176.39 | $176.92 |
| 652 | Continuous Home CareFull Rate = 24 hours of
care |
$1,565.46 | $1,610.34($67.10 per hour) | $1,618.59($67.44 per hour) |
| 655 | Inpatient Respite Care | $507.71 | $518.15 | $518.78 |
| 656 | General Inpatient Care | $1,145.31 | $1,166.98 | $1,170.04 |
These rates would apply to hospices that submit the required quality data. Source: CMS.
Impacts of the FY 2025 payment rates vary by hospice provider type and location in consideration of updated wage data with the cap. Overall, rural hospices fare slightly better than their urban counterparts, with an overall 3.9 percent estimated payment update, while urban hospices are estimated to receive an overall 2.9 percent payment update.
CMS FINALIZES UPDATES TO THE HOSPICE WAGE INDEX BASED ON REVISED CENSUS DATA
CMS finalizes its proposal to update the hospice wage index using the Office of Management and Budget’s (OMB) most recent statistical area delineations, which are based on 2020 Decennial Census data.[3] CMS believes that adopting these new delineations will result in wage index values that more accurately represent the local costs of labor. This change in statistical areas delineations will result in 53 counties switching from being part of an urban Core-Based Statistical Area (CBSA) to a rural CBSA, 54 counties switching from a rural CBSA to an urban CBSA, and 73 counties moving from one urban CBSA to another urban CBSA.[4]
CMS believes that the permanent five percent cap on negative wage index changes, which applies regardless of the reason for the decline and was finalized in the FY 2023 Hospice Wage Index final rule, will sufficiently mitigate any wage index decreases that result from this update. While this cap was previously applied at the CBSA level, to account for counties switching CBSAs due to the updated statistical area delineations, CMS finalizes that the cap would also be applied at the county level for counties that switched CBSAs. As this will result in some counties within a CBSA having a higher wage index than the rest of the CBSA, these counties must use a wage index transition code to identify that their wage index will be different than the rest of the CBSA.[5]
CMS IMPLEMENTS THE HOSPICE OUTCOMES AND PATIENT EVALUATION (HOPE) INSTRUMENT, IN ADDITION TO OTHER QUALITY MEASURE UPDATES
The Hospice Quality Reporting Program (HQRP) specifies the quality reporting requirements for hospices in the Hospice Item Set (HIS), administrative data, and Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey.
Beginning with FY 2025, CMS finalizes its proposal to replace the existing HIS structure with the HOPE instrument set, a standardized patient-level data collection tool. HOPE is intended to enable CMS to gather patient level-data during the hospice stay. Instead of only collecting data at hospice admission and discharge, the HOPE would collect data at admission, during HOPE Update Visits (HUV), and at discharge. The final HOPE Guidance Manual v1.0, which provides hospices with information on the collection and submission of hospice patient data, is available on the HQRP HOPE webpage.[6] CMS estimates that the data collected with HOPE would support measures that would be publicly reported on or after November 2027 (FY 2028). CMS also finalizes its proposal to add two measures -Timely Follow-Up for Pain Impact and Timely Follow-Up for Non-Pain Symptom Impact – to the HQRP using data collected from HOPE no sooner than FY 2028. These measures assess whether a follow-up visit occurs within 48 hours of an initial assessment of moderate or severe symptom impact and would require assessment at multiple points during a patient’s hospice stay.
CMS received a number of comments on the proposed adoption of HOPE, including concerns about the staffing burden of in-person visits, and the lack of a phased approach for hospices to meet the HQRP 90 percent reporting threshold in light of this new instrument. CMS notes that changes to HOPE could be made in future rulemaking. In response to staffing concerns, CMS finalizes that symptom visits could be performed by either Registered Nurses (RNs) or Licensed Vocational Nurses (LVNs) / Licensed Practical Nurses (LPNs).
CMS also finalizes its proposed changes to the Hospice CAHPS Survey based on a mode experiment conducted with 56 hospices in 2021, including the addition of a new, two-item Care Preferences measure; revisions to two existing measures, the Hospice Team Communication measure and Getting Hospice Care Training measure; and the removal of three nursing home items. Other finalized proposals focus on survey administration changes and case-mix and mode adjustments.
Additionally, CMS stated it is committed developing approaches to meaningfully incorporate the advancement of health equity into the HQRP and requested information for future HQRP social determinations of health (SDOH) items to better address health care outcomes inequities. The four SDOH items CMS sought feedback on are: 1) housing instability, 2) food insecurity, 3) utility challenges (related to household energy security), and 4) transportation challenges. CMS specifically sought feedback on the relevance of these items for hospice patients, which items are most suitable for hospice, and how items might need to be adjusted to improve relevance for hospice patients and their caregivers. CMS was also interested in whether there are additional SDOH domains that would be beneficial in identifying and addressing health inequities in hospices.
Commentors were generally supportive of incorporating future SDOH items into the HQRP, though some commentors requested that CMS make it clear how the data would be used to improve patient care, and others raised concerns about administrative burden. Suggestions for additional SDOH domains included economic stability, health literacy, and preferred language.
CMS FINALIZES CLARIFICATIONS AND TECHNICAL CHANGES TO HOSPICE CARE REGULATIONS FOR IMPROVED CONSISTENCY AND COMPLIANCE
CMS finalizes several clarifications and technical changes to the regulations concerning hospice care. These adjustments include aligning the language in the CoPs with payment requirements to ensure consistency and reduce confusion. Specifically, the term “physician designee” will now be used instead of “physician designated by,” and the physician member of the interdisciplinary group (IDG) can certify a patient’s terminal illness if the medical director is unavailable.
Additionally, CMS makes clarifications to clearly distinguish between the requirements for the election statement and the Notice of Election (NOE), addressing confusion among stakeholders. CMS also corrects a technical error by replacing the term “marriage and family counselor” with the correct term, “marriage and family therapist,” in the hospice personnel requirements.
CMS CONSIDERS REVISIONS TO HOSPICE PAYMENT STRUCTURE FOR HIGH-COST PALLIATIVE CARE SERVICES BASED ON PUBLIC FEEDBACK
Noting that a subset of hospice eligible beneficiaries would likely benefit from receiving palliative, rather than curative, chemotherapy, radiation, blood transfusions, and dialysis, and that patients seeking these types of treatments often face barriers to care, CMS issued a Request for Information (RFI) on a payment mechanism for high intensity palliative care services. CMS noted it has previously received feedback from stakeholders that hospices have told patients Medicare does not allow for the provision of these palliative treatments upon hospice election, although there are instances where palliative treatments would be covered under the hospice benefit. In the FY 2024 Hospice Final Rule, in response to an RFI on hospice utilization, CMS received comments indicating that the cost of providing complex palliative treatments and higher intensity of hospice care may pose financial consequences to hospices. To address these issues, CMS sought feedback in the FY 2025 proposed rule on several topics to continue to improve access to and the value of the hospice benefit.
CMS received around 60 comments in response to its RFI on a payment mechanism for high-intensity palliative care services. Commenters emphasized the need to clearly distinguish between “comfort care” and “palliative care,” and suggested renaming the latter as “high-cost therapies.” They highlighted financial barriers to providing such treatments under the current hospice benefit, including the high costs of specialized staff, drugs, and equipment. Suggestions for overcoming these barriers included tiered payments or concurrent care payments, and a more robust reimbursement structure that covers both the treatments and associated care management costs. Some commenters recommended maintaining flexibility in defining palliative services to avoid restricting patient-specific care options.
Overall, there was a consensus on the need for better financial support and clearer policies to enable the provision of high-cost palliative treatments within hospice care. While opinions varied on whether to establish separate payments for different treatments or to maintain a standard payment rate, many commenters advocated for covering these treatments under a different mechanism than the current hospice benefit. In the final rule, CMS states its intention to continue to seek input on improving hospice care policies.
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This Applied Policy® Summary was prepared by Emma Hammer with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact her at ehammer@appliedpolicy.com or 202-820-7383.
[1] See Tables 9 and 10 of the proposed rule.
[2] See Tables 9 and 10 of the final rule.
[3] OMB Bulletin No. 23-01
[4] Table 3 on pages 25-26 of the unpublished final rule lists the counties that will switch from urban to rural due to the adoption of new OMB delineations. Table 4 on pages 26-28 of the unpublished final rule lists the counties that will switch from rural to urban due to the adoption of new OMB delineations is finalized. Table 7 on pages 31-35 of the unpublished final rule lists the counties that would move from one urban CBSA to another.
[5] Table 8 on pages 39-40 of the unpublished final rule lists the counties that will use a transition code.