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Delta Connect Blog

HAA Provides Perspectives on Hospice Payment “Status Report”

Posted by Crystal Parks on Jul 25, 2013 10:42:00 AM


As part of an April 29, 2013 release, “Proposed Rule: Medicare Program;FY2014 Hospice Wage Index and Payment Rate Update; Hospice Quality Reporting Requirements; and Updates on Payment Reform” (CMS-1499-P), the Centers for Medicare & Medicaid Services (CMS) included information about progress to date on research to develop a new hospice payment system - including discussion of several options that could be used in concert to reform hospice payments. Options discussed include:

  • Use of the initial Medicare Payment Advisory Commission (MedPAC) proposed U-shaped model - first proposed in March 2009 - that provides increased payment at the beginning and end of an episode of care, with reduced daily payments in the middle.  CMS comments that concerns with this model include that very short hospice stays have a flatter curve.
  • As an alternative to the U-shaped model, CMS suggests a possible tiered approach to payment with payment tiers based on the length of stay.
  • Use of a possible short-stay add-on, which would be similar to the home health Low Utilization Payment Adjustment – LUPA, to cover the higher costs of patients who are on service for a limited time.
  • Rebasing of routine home care (RHC).
  • A site-of-service adjustment for care delivered to hospice patients in nursing facilities.
  • CMS does not rule out the possibility of a case-mix based system, however additional data is needed to develop this type of system, including additional diagnoses on claims.

Late last month, the Hospice Association of America (HAA) – a NAHC affiliate - submitted comments on the proposed rule.  Relative to CMS’ status report on payment reform, HAA cautioned that, “We continue to believe that the ultimate goals must be accuracy and relative simplicity, as well as ensuring that incentives that could negatively affect patient access to care are minimized.”  HAA continued, “This is particularly a concern relative to implementation of more than one major change to the payment system at the same time.”

Of particular concern to HAA is CMS’ consideration of rebasing of RHC.  By CMS’ calculations, rebasing of RHC could reduce daily payment rates by more than $16.  While in the first year of payment reform CMS would be required to use “budget neutrality”, HAA was particularly concerned that in subsequent years policymakers could use rebasing of RHC as justification to significantly reduce hospice payments.    Additionally, by implementing rebasing of RHC in concert with other payment reforms, CMS could risk injecting harmful incentives into the hospice payment system that could negatively impact access to and quality of care.

HAA objects to CMS’ consideration of a site-of-service adjustment for hospice care delivered in nursing facilities until such time as CMS can more accurately target providers who reap significant profits from delivery of such care.   HAA also suggests that implementation of other payment changes (such as a tiered payment model) could address some of the incentives in the hospice payment system that currently may incent providers to pursue patients in nursing facilities.

HAA’s complete comments are available here.

From the NAHC Report article 


Topics: Hospice Association of America, CMS, Hospice Wage Index, Hospice Payments


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