The Centers for Medicare & Medicaid Services (CMS) produced its Hospice 2025 Final Rule (last week), including a 2.9% increase in per diem payments plus new quality reporting measures. The full text of the final rule is available here: Hospice Final Rule 2025
The increase signifies an estimated rise of $790 million in total hospice payments compared to Fiscal Year (FY) 2024, surpassing the initial 2.6% hike proposed by CMS. In April, I wrote a post on the Proposed Final Rule including the rule text. That post is available here: https://rhislop3.com/2024/04/03/wednesday-feature-hospice-proposed-rule-for-2025/
Per CMS announcement, “the FY 2025 hospice payment update percentage is 2.9% … results from the 3.4% inpatient hospital market basket percentage increase, reduced by a 0.5 percentage point productivity adjustment. The FY 2025 payment rates for hospices that do not submit the required quality data would reflect the finalized FY 2025 hospice payment update percentage of 2.9%, minus four percentage points, which results in a -1.1% update.” Recall, hospices are required to submit quality data concurrent with patient death/discharge. Failure to do so can result in a reimbursement reduction. The rates, non-labor region adjusted, are below.
As hospice readers/followers know, hospice reimbursement policy incorporates two caps on payments. First, is the inpatient cap limiting reimbursement for General Inpatient Care to no more 20% of all days reimbursed. Shorthand, of the total days of care paid in the fiscal year (cost report year), no more than 20% can be coded as General Inpatient.
The second cap is the aggregate cap. The aggregate cap calculation is a function of the hospice taking all Medicare reimbursements paid on behalf of patients and dividing by the number of Medicare patients in a given fiscal year. For 2024, as long as the total per beneficiary as calculated is no more than $33,494.01, no dollars are returned to Medicare. The finalized hospice cap amount for FY 2025 is $34,465.34.
Labor Factor/Index Adjustments
For all Medicare reimbursed entities, CMS has slowly been updating labor regions and labor related data. For Hospice, like SNFs, the update takes effect in 2025.
Per CMS announcement: “This rule finalizes the policy to adopt the most recent OMB statistical area delineations, which revise the existing core-based statistical areas (CBSA) based on data collected during the 2020 Decennial Census. Hospices negatively affected by the change to their geographic wage index will only experience a maximum 5% reduction to their 2024 wage index, as there is a 5% cap on any decrease to the wage index from the prior year. This permanent cap, finalized in the FY 2023 Hospice Final Rule, prevents a geographic area’s wage index from falling below 95% of its wage index calculated in the prior FY.” Fiscal Year (FY) 2025 Hospice Payment Rate Update Final Rule (CMS-1810-F) | CMS
Hospice Quality Reporting Program (HQRP)
The Final Rule introduces the HOPE patient-level data collection tool starting in FY 2025, which will supersede the current Hospice Item Set (HIS). Unlike HIS, which gathers data solely at admission and discharge, HOPE will collect information at various stages throughout the hospice stay, including admission, during the HOPE Update Visit (HUV), and at discharge.
HOPE includes several domains that are new or expanded compared to HIS, including:
- Sociodemographic (updated)
- Diagnoses (expanded)
- Symptom Impact Assessment
- Skin Conditions
- Imminent death
The rule ultimately establishes two new process measures for the HQRP: Timely Follow-up for Pain Impact and Timely Follow-up for Non-Pain Symptom Impact, slated to start in FY 2028. These measures will be reported using the newly introduced HOPE instrument.