TheCenters for Medicare & Medicaid Services on Tuesday proposed arule that would trim Medicare hospice payments by 1.1% in FY 2010.

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

CMS says theelimination of the adjustment will mean more accurate payments andMedicare savings of $2.9 billion over five years.Accordingto a Medicare Payment Advisory Counsel report, between 2009 and 2015,Medicare expenditure on hospice services will grow at a faster ratethan those projected for skilled nursing, home health, hospital orphysician services. The rule is scheduled to be published in theFederal Register on Friday. The comment period will last until June22. For more information, visit