CMS Finalizes 3.1% Hospice Payment Update for 2024, But Industry Stakeholders Fear It Falls Short

The U.S. Centers for Medicare & Medicaid Services (CMS) is giving hospices a 3.1% increase to their per diem payments for 2024, according to a final rule published Friday.

That will translate to a $780 million bump to hospice payments next year compared to Fiscal Year 2023, according to CMS. The finalized rule also raises the aggregate payment cap to $33,494.01 for next year, up from $32,486.92 set in 2023.

The rate increase is a modest climb from the 2.8% payment boost the agency initially proposed for 2024 hospice payments back in March. The slightly higher payment rate came after weighing considerations around higher costs to deliver care, the agency indicated.

Hospice industry stakeholders and providers alike have expressed concern that the increases are insufficient, calling for higher reimbursement rates to offset inflation, wage pressures and other headwinds.

“While we appreciate the payment increase to 3.1%, a more generous market basket update was badly needed for nonprofit, mission-driven hospice providers committed to continuing to provide quality care in their communities,” Katie Smith Sloan, LeadingAge president and CEO, said in a statement shared with Hospice News. “Even with this increase, conditions on the ground require more support: workforce costs are higher than ever; nurses and aides are scarce, and cost for supplies, drugs, gas, and other expenses are all inflated.”

The rule also included updates around quality and compliance. CMS raised the annual payment reduction from 2 to 4 percentage points for hospices that fail to meet quality reporting requirements.

“Beginning in FY 2024 and for each subsequent year, hospices that fail to meet quality reporting requirements receive a 4 percentage point reduction to the annual hospice payment update percentage increase for the year,” CMS stated in an announcement. “The FY 2024 rates for hospices that do not submit the required quality data would be updated by -0.9%, which is the FY 2024 hospice payment update percentage of 3.1% minus 4 percentage points.”

The final rule includes considerations around health equity measures, hospice ownership and spending patterns around unrelated end-of-life care services, CMS stated.

“This final rule discusses the comments received regarding information related to the provision of higher levels of hospice care; spending patterns for non-hospice services provided during the election of the hospice benefit; ownership transparency; equipping patients and caregivers with information to inform hospice selection; and ways to examine health equity under the hospice benefit,” CMS stated.

Concern has mounted that insufficient payment may worsen access disparities, particularly among underserved rural regions where providers are increasingly struggling to remain afloat during financial times.

Jennifer Sheets, the former president and CEO of Caring Brands International and Interim HealthCare Inc., recently discussed that idea at the National Association for Home Care & Hospice (NAHC) Financial Management Conference. Sheets is a NAHC board member.

“We’re seeing rural hospitals closed across the country because they can no longer afford to provide care in those areas. Home health agencies and hospice agencies eventually are going to be forced to choose the exact same thing,” Sheets said at the conference. “So, access to care is not only going to be impacted everywhere, but also those most vulnerable, at-risk people in rural markets are going to be impacted disproportionately.”

CMS in the final rule also addressed how telehealth may be evolving in a post-pandemic landscape.

The agency instilled temporary waivers during the COVID-19 public health emergency (PHE) that allowed hospices to perform routine home care visits virtually, as well as conduct face-to-face recertification visits.

Congress extended the recertification waiver through Dec. 31, 2024, meaning a return to in-person recertification visits may be on the table for the following year.

“We are finalizing regulations’ text changes related to the provision of telehealth services for routine home care with the expiration of the COVID-19 PHE for the use of telecommunications technology for the face-to-face encounter conducted by a hospice physician or hospice nurse practitioner for the sole purpose of hospice recertification through December 31, 2024,” CMS stated.