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Takeaway: RHC per diem and cap will increase 1.8 percent. OIG remains concered with quality and fraud but little direction from CMS in FY 2019 rule

MEDICARE RULE-A-RAMA | CMS FINALIZES 1.8 PERCENT HOSPICE PAYMENT INCREASE; OTHERWISE A SNOOZE-FEST - Hospice Update1

Like the payment silos for Inpatient Rehabilitation Facilities and Inpatient Psychiatric Facilities, Hospice is a policy wasteland at CMS. Aside from some burden reduction for quality reporting, there is little in the way of new initiatives in the FY 2019 final rule.

Payment Update. Total Medicare payments to hospice will increase about 1.8 percent or $340 million. After certain budget neutrality adjustments, per diem rates for RHC hospice days 1 to 60 will increase from $192.78 to $196.25 and for RHC hospice days over 60 per diem rates will increase from $151.40 to $154.21.

MEDICARE RULE-A-RAMA | CMS FINALIZES 1.8 PERCENT HOSPICE PAYMENT INCREASE; OTHERWISE A SNOOZE-FEST - Hospice Update2

Hospice Cap. The FY 2019 hospice cap will be $29,205.44 which is equal to the FY 2018 hospice cap of $28,689.04 updated by 1.8 percent.

CMS and Congress don’t appear to have any policy goals for hospice despite increasing evidence that the design of the benefit does not meet the needs of many beneficiaries. Hospice was created largely to address a terminal cancer diagnosis. In 2002, lung cancer was the most common diagnosis for a hospice admission. For the last five years, the most common diagnosis has been neurological diseases like Alzheimer’s. Neurological conditions have a much less certain progression than cancer, leading to hospice admissions that can stretch on for years.

Into the gap between poor benefit design and patient needs, has driven a good bit of fraud. On Tuesday, the Office of the Inspector General issued another in a string of reports highlighting the many problems with the hospice benefit and urging more oversight including pre-payment reviews.

We are not inclined to predict much in the way of change out of Washington. The only major change under consideration appears to be an expansion of Medicare Advantage benefits to include hospice. Proposals have been floated in recent months/years but nothing has been enacted. We do anticipate continued use to CMS's audit power and OIG enforcement initiatives.

Call with questions.

Emily Evans
Managing Director
Health Policy


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