May 10, 2016

Proposed Hospice Rule Released

By Janet Potter, Senior Manager, Advisory Services & Bonny Kohr, Senior Manager, Advisory Services

Proposed Hospice Rule Released

On April 28, 2016, the Centers for Medicare and Medicaid Services (CMS) published in the Federal Register the proposed hospice wage index and payment rule update along with hospice quality reporting requirements. The comment period for this rule is open through June 20, 2016. The proposed rule is for fiscal year 2017, which begins on October 1, 2016. The final rule is expected to be released around August 1, 2016.

The rule proposes a 2.0% increase in hospice rates, which consists of a 2.8% market basket index increase, reduced by a 0.5% productivity adjustment and a 0.3% adjustment mandated by the Affordable Care Act (ACA). The following are the base payment rates as proposed for FY2017:



FY 2016 Payment Rates

FY 2017 Proposed Payment Rates


Routine Home Care (days 1-60)




Routine Home Care (days 60+)




Continuous Home Care
Full rate = 24 hours of care
$40.16 = FY 2017 hourly rate




Inpatient Respite Care




General Inpatient Care



The proposed 2017 hospice aggregate cap was also announced to be $28,377.17, which is a 2% increase from the 2016 cap of $27,820.75.

  • The proposed rule discusses potential changes to the hospice quality reporting program (HQRP), including the addition of two new measures: Hospice Visits When Death is Imminent Measure – assessing the percentage of hospice patients who receive at least (1) visit from a registered nurse, physician, nurse practitioner or physician assistant during the last (3) days of life; and a second measure determining the percentage of patients receiving at least (2) visits from medical social workers, chaplains or spiritual counselors, licensed practical nurses or hospice aids in the last (7) days of life.

Data for this measure would be collected from the existing Hospice Item Set (HIS). It is proposed that the data collection would begin on April 1, 2017.

  • Hospice and Palliative Care Composite Process Measure– determining the percentage of hospice patients who received care process consistent with existing guidelines. This measure consists of (7) individual care processes at admission. The data is collected currently as part of the HIS. CMS will create a composite quality measure score for the comprehensive assessment at admission, to provide consumers and providers a single measure to compare quality and increase transparency.

In the proposed rule, CMS also announces that they are considering developing a comprehensive patient assessment instrument. If an instrument is developed, it would more closely align hospices with other post-acute care settings.

CMS also announces that they intend to build a Hospice Compare Website, similar to those available for other provider types. The public reporting of HIS quality measures would begin in calendar year 2017. CMS will announce the timeline for the development of a star rating system for hospices in future rule making.

The proposed rule also provides updated information on the Medicare Care Choices Model (MCCM). MCCM is a five-year demonstration model to test whether Medicare and dually eligible beneficiaries would choose to receive palliative and supportive care services if they could continue curative care in addition to the services typically provided by a hospice. CMS has expanded the number of participating hospice agencies from their original plan of 30 hospices to over 130 hospices in 39 states. The participating hospices have been divided into two groups; the first group began providing services based on the model criteria in January 2016, and the second group will begin to provide services in January 2018. Further information on this model and a list of participating hospices can be found at:

No further refinement to the payment model has been proposed; however, CMS continues to collect and monitor hospice data to evaluate future payment and regulatory reform. Areas of concern addressed in the proposed rule include diagnoses reporting, utilization trends, non-hospice spending during a hospice election, and live discharge rates. CMS indicated that the numbers suggest that hospices are not providing all the services needed by beneficiaries who have elected the hospice benefit and that the hospices may be using the hospice program as a “custodial” benefit rather than an end of life benefit for some Medicare beneficiaries.

If you have questions or concerns about the hospice proposed rule, please contact your Marcum LLP advisor.

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