MedPAC: Cut Hospice Payment Cap by 20%, Report Telehealth on Claims

Repeating similar calls in prior years, the Medicare Payment Advisory Commission (MedPAC) has recommended to Congress that Medicare hospice payment rates remain at current levels next year. The commission also called on the U.S. Centers for Medicare & Medicaid Services (CMS) to apply the wage index to the hospice aggregate cap, followed by a 20% cut. 

MedPAC indicated that it would not recommend changes to hospice reimbursement for 2023 based on the financial impact of the COVID-19 pandemic. This is in part because of standard data lags. The commission used 2020 data for utilization and costs and 2019 numbers for margins.

“We have considered the effects of the coronavirus public health emergency (PHE) and associated relief policies on our indicators and whether those effects are likely to be temporary or permanent,” MedPAC said in its report to legislators. “To the extent that the effects of the PHE are temporary changes or vary significantly across individual hospice providers, they are best addressed through targeted temporary funding policies.”

Advertisement

MedPAC has also recommended that hospices begin reporting telehealth visits on Medicare claims. The commission indicated that a lack of telehealth utilization data during the pandemic has made it difficult to accurately predict costs for coming years.

CMS adjusts hospice payment amounts to account for differences in wage rates among markets. If Congress were to enact MedPAC’s recommendations, the agency would apply also this wage index to the cap and then reduce the amount by 20%.

MedPAC contends that the lack of a wage adjustment for the cap creates more financial pressure for providers in geographies that see higher labor costs.

Advertisement

For a cap reduction to take place, Congress would have to accept the recommendation and legislate accordingly. Historically lawmakers have not pursued recommended cuts to the aggregate cap. 

For Fiscal Year 2022, the cap is nearly $31,300 per patient. About 19% of hospices exceeded the cap in 2019, according to MedPAC. 

The proposed cuts to the payment cap are designed to target hospice providers that see longer lengths of stay and high margins.

As in prior years, the hospice community did not welcome talk of a potential cut to the aggregate cap, particularly as they work to boost recruitment and retention in a pressurized labor market.

“With the current economic challenges and staff shortages, compounded by the ongoing pandemic, if we want to continue providing patients with the end-of-life care they deserve, we should actually be increasing hospice reimbursement to make sure hospices can recruit and retain staff,” Edo Banach, president & CEO of the National Hospice & Palliative Care Organization, told Hospice News.

Companies featured in this article: