CMS plan would hike hospice rates in 2016

The Centers for Medicare & Medicaid Services plans to raise hospice payment rates by nearly $200 million, or 2%, in fiscal year 2016. They come under a sweeping proposal establishing payment tiers based on length of stay and laying the groundwork for additional quality reporting measures.

CMS officially announced plans in Tuesday's Federal Register to create two different payment rates for routine home care that would result in a higher base payment rate for the first 60 days of hospice care and a reduced base payment rate for days 61 or beyond. The proposal also includes a “service intensity add-on” payment, in addition to the per diem rate for the RHC level of care. This would result in an add-on payment equal to the continuous home care hourly payment rate multiplied by the amount of direct patient care provided by a registered nurse or social worker that occurred during the last seven days of a beneficiary's life, if certain criteria were met.

Despite the promise of higher payments in the coming year, CMS investigators remain critical. Since hospice is most profitable during the long, low-cost middle portions of an “episode,” they argue, longer episodes would potentially have very profitable, long middle segments.

“This financial incentive appears to have resulted in hospices enrolling beneficiaries that are not truly eligible for the benefit (that is, do not have a life expectancy of 6 months or less),” CMS authors wrote, adding it “may lead some patients, families, and providers to implicitly regard hospice as a source of basic health care for failing patients who did not qualify for skilled nursing facility or home health care and did not qualify for Medicaid or otherwise could not afford other sources of long-term custodial care, rather than the end-of-life care for which the benefit was originally designed,”