Payment Matters: Two More Courts Invalidate CMS’s Regulations for Calculating Hospice Cap


Two United States district courts recently struck down CMS’s regulations for calculating hospice caps, joining nearly a dozen other federal courts that found the regulations to be contrary to the Medicare statute. Autumn Light Hospice v. Sebelius [PDF], No. CIV-09-178-M (W.D. Okla. Jan. 12, 2011), Harris Hospice, Inc. v Sebelius [PDF], Nos. 4:10cv252, 4:10cv275 (E.D. Tex. Jan. 6, 2011).

Medicare pays a hospice provider a predetermined fee for each day that an eligible patient receives hospice services. The hospice benefit includes an annual perbeneficiary cap, applied retrospectively and in the aggregate, to limit the total amount that can be paid to a hospice each year. According to the Medicare statute (42 U.S.C. § 1395f(i)(2)(c)), the cap is calculated by multiplying the number of beneficiaries who received hospice services during the accounting year (November 1 – October 31) by the per-beneficiary cap amount. The statute also provides that the number of beneficiaries for a given account year must be reduced to reflect the proportion of services a beneficiary received in an earlier or subsequent accounting year.

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