CMS will move forward with restructuring the way it pays hospices, resulting in the first major payment change in more than 30 years.
 
As a result, it’s expected that hospices with brief average lengths of stay will benefit financially while hospices with extremely long average lengths of stay will lose money, says Theresa Forster, vice president of hospice policy and programs for the National Association for Home Care & Hospice.
 
The 2016 final hospice payment rule, posted on the Federal Register July 31, says hospices will receive greater payments in the beginning and end of care for patients receiving routine home care (RHC), the basic level of care that the vast majority of hospice patients receive.
 
In the final rule, CMS announced there would be an add-on payment for hospices during the patient’s final week of life even if the patient was in a nursing facility or skilled nursing facility. In the proposed rule, the federal Medicare agency had said that add-on payments would not be provided for those patients.
 
Adding payments for hospice care in nursing facilities was welcome news for the hospice industry, which had argued additional payments for direct patient care at the end of life should occur regardless of location, Forster says.
 
In the final rule, CMS also decided to delay implementation of the payment restructuring from Oct. 1, 2015 until Jan. 1, 2016. It believes “state Medicaid agencies may encounter difficulties in making the necessary systems and software changes” by October.
 
Overall, hospices will see an estimated 1.1% increase — $160 million — in payments for the 2016 fiscal year.  By comparison, the 2015 rule included a 1.4% increase in Medicare’s hospice payments.
 
How will hospice payments change?
 
In 2015, hospices have been receiving a per-day reimbursement of $159.35 regardless of how much care they provide patients on any given day in RHC.
 
The new proposal creates different payment rates for RHC patients depending upon their length of stay. Beginning Jan. 1, 2016, hospices will be paid $186.84 per day during the first 60 days of care they provide. Beginning on day 61, they will be paid $146.83 per day.
 
The differing rates further CMS’ goal of more accurately aligning payments with visit intensity and the cost of care provided, CMS says.
 
The payment reform will be a good thing for many hospices, especially since “over the past couple of years we’ve seen a drop in the hospice length of stay pretty much across the country,” notes Julia Maroney, a senior manager with Simione Healthcare Consultants in Hamden, Conn.
 
Prior to Jan. 1, 2016, hospices will continue to be paid at a single rate.
 
Also, in conjunction with this payment change, CMS will provide a service intensity add-on (SIA) payment beginning Jan. 1, 2016 and beyond at the RHC level. CMS will give SIA payments to hospices providing direct patient care from registered nurses or social workers during the patient’s final week of life.
 
The maximum add-on will be as high as $157.48 per day. Hospices will receive $39.37 per hour for a maximum of four hours of labor, Forster says.
 
The SIA encourages hospices to visit patients at the end of life and addresses industry concerns that payments should be greater for days that require greater resources, CMS says.
 
The proposed rule had said that hospices wouldn’t receive the SIA payment for patients living in nursing facilities or skilled nursing facilities. That was due to concerns the HHS Office of Inspector General (OIG) and MedPAC showed with the provision of hospice care in such settings, CMS said.
 
But in comments to CMS about the proposed rule, MedPAC said add-on payments should be given to hospices providing care in nursing facilities — just like in other locations.
 
Although MedPAC believes providing hospice care in nursing facilities is less expensive than in homes, it told CMS that hospices should receive add-on payments regardless of the setting where care was provided. That’s because wherever patients are, MedPAC “would expect hospice patients to have an increased need for nursing support to manage their symptoms in the last days of life,” MedPAC said.
 
Other items in the hospice final rule
  • Hospices must report all diagnoses identified within initial and comprehensive assessments on hospice claims. This includes those diagnoses unrelated to patients’ terminal prognoses such as mental health conditions that might affect plans of care. Hospices must assess and provide care for patients’ identified psychosocial, emotional, physical and spiritual needs, CMS reminds.
  • CMS plans to release the contractor’s 2015 technical report later this year. The report from Abt Associates won’t contain a payment reform analysis but is expected to provide additional background information on aspects of hospice practice that CMS examined while deciding on payment changes, Forster says.
  • CMS discussed priority areas for future quality measure enhancement and development. The measures include: hospice team communication and coordination; responsiveness of hospice to patient and family care needs; and patient reported pain outcome measure that incorporates patient and/or proxy report regarding pain management. A more controversial area involved claims-based measures focused on care practice patterns including skilled visits in the last days of life, burdensome transitions of care for patients in and out of the hospice benefit and rates of live discharges. Many commenters expressed concern about CMS using claims data as a source for quality measures, and CMS said it appreciates those concerns. Concepts for future quality measures are under development, and further details will be discussed in future rulemaking, CMS says.
Related link: View the final rule at http://bit.ly/1Df58XZ.