Government proposes cutting Medicare hospice payments 1.1%

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The Centers for Medicare & Medicaid Services on Tuesday proposed a rule that would trim Medicare hospice payments by 1.1% in FY 2010.

The Medicare Hospice Wage Index was subjected to a temporary, 3.2% budget neutrality adjustment factor (BANF) in 1997 in an attempt to make hospice payments more accurate, and usher in a more modern approach to reimbursements. A three-year phase out of the BANF was set to begin in FY 2009 with a 25% reduction of the original adjustment, but it was delayed by the American Recovery and Investment Act. Instead, the phase out will begin in FY 2010 with a 75% reduction of the adjustment, before it is entirely eliminated in FY 2011.

CMS says the elimination of the adjustment will mean more accurate payments and Medicare savings of $2.9 billion over five years. According to a Medicare Payment Advisory Counsel report, between 2009 and 2015, Medicare expenditure on hospice services will grow at a faster rate than those projected for skilled nursing, home health, hospital or physician services. The rule is scheduled to be published in the Federal Register on Friday. The comment period will last until June 22. For more information, visit http://www.federalregister.gov/inspection.aspx.