This final rule updates the hospice payment rates and the wage index for fiscal
year (FY) 2014. The budget neutrality adjustment factor (BNAF) phase-out will continue with successive 15 percent reductions in FY 2015 and FY 2016. BNAF reduction in FY 2014 will be 70 percent. This final rule also clarifies how hospices are to report diagnoses on hospice claims, and provides updates to the public on hospice payment reform. Additionally, this final rule changes the requirements for the hospice quality reporting program by discontinuing currently reported measures and implementing a Hospice Item Set with seven National Quality Forum (NFQ) endorsed measures beginning July 1, 2014 and will implement the hospice Experience of Care Survey on January 1, 2015, as proposed.
Hospices will receive an estimated 1%, or $160 million, increase in payments for FY 2014, according to the final fiscal year 2014 hospice wage index and payment rule issued Aug. 2.
CMS also confirmed that debility and adult failure to thrive will no longer be allowed as principal diagnoses on hospice claims starting Oct. 1, 2014, reports the National Association for Home Care & Hospice (NAHC).
The payment increase represents a hospice payment update of 1.7% -- an increase of 2.5%, minus 0.8% for reductions mandated by law. It also factors in a 0.7% decrease in payments to hospices, reflecting updated wage data and the fifth year of CMS seven-year phase out of its wage index budget neutrality adjustment factor (BNAF).
The FY2014 hospice payment rates and wage index will take effect on Oct. 1.
In its preliminary analysis of the changes, the National Association for Home Care & Hospice (NAHC) reported that the 1.7% market basket update is down slightly from 1.8% contained in the proposed rule and that this 0.1% point reduction was caused by an increase in the productivity adjustment -- from 0.4% to 0.5%.
CMS also released a fact sheet on the final rule.