On July 28, 2023, CMS issued a final rule (CMS-1787-F) updating Medicare hospice payment rates and the aggregate cap amount applicable to fiscal year 2024 (the Final Rule). According to CMS, the Final Rule is part of CMS’s efforts to more closely examine the hospice industry for fraud, waste, and abuse, and includes a requirement that physicians who certify patient eligibility for hospice services must be enrolled in Medicare or validly opted out in order for the hospice services to be eligible for payment.

2024 Rate Setting Changes

The fiscal year 2024 hospice update percentage is 3.1%, which is an estimated $780 million increase in payments over fiscal 2023. This 3.1% increase is a result of the 3.3% inpatient hospital market basket percentage increase reduced by a 0.2 percent productivity adjustment. The payment reduction for a failure to meet hospice quality reporting requirements was increased from 2 to 4 percentage points beginning in fiscal 2024, meaning that hospices that do not submit the required quality data would suffer a 0.9% decrease in rates in fiscal 2024 compared with 2023.

The Final Rule also includes a statutory aggregate cap limiting the total annual payments per patient to $33,494.01, which is 3.1% higher than the 2023 annual cap.

Hospice Quality Reporting Program

The Final Rule codifies the Hospice Quality Reporting Program data completion threshold and provides updates relating to the development of a patient assessment instrument. CMS also updated the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey based on the results of a survey experiment conducted in 2021. CMS is still accepting comments on the proposal for the establishment of an SFP for poor-performing hospices through August 29, 2023.

Hospice Certifying Physician Enrollment

Under existing regulation, the hospice medical director or the physician member of the hospice interdisciplinary group and the patient’s attending physician must certify the patient’s terminal condition in order for the patient’s hospice treatment to be eligible for payment. Under CMS’s new rule, both of these physicians must be either enrolled in or validly opted out of Medicare in order for the hospice services to be paid. According to CMS, this requirement will allow CMS to ensure that these physicians are qualified to certify the terminal condition.

The text of the Final Rule is available here. CMS’s fact sheet on the Final Rule is available here.