The U.S. Centers for Medicare & Medicaid Services (CMS) has unveiled its final 2025 hospice rule, which includes a 2.9% increase in per diem payments alongside new quality reporting measures.
The increase represents an estimated $790 million rise in total hospice payments compared to Fiscal Year (FY) 2024. It is also higher than the 2.6% hike that CMS initially proposed.
The finalized hospice cap amount for FY 2025 is $34,465.34, up from $33,494.01 this year. The payment update reflects rising inpatient care costs alongside the potential financial impacts of noncompliance with new quality standards, according to the agency.
“The FY 2025 hospice payment update percentage is 2.9% … results from the 3.4% inpatient hospital market basket percentage increase, reduced by a 0.5 percentage point productivity adjustment,” CMS stated in an announcement. “The FY 2025 payment rates for hospices that do not submit the required quality data would reflect the finalized FY 2025 hospice payment update percentage of 2.9%, minus four percentage points, which results in a -1.1% update.”
Payment policy updates
In addition to new reimbursement rates, the rule indicated that CMS in 2025 will implement a new model for how it uses the wage index to inform future payment.
The agency set a 5% cap on any year-over-year wage index decrease that hospices experience. The capitated amount was finalized in the FY 2020 final hospice rule, which prevents a geographic area’s wage index from falling below 95% of its wage index calculated in the prior fiscal year.
“Hospices negatively affected by the change to their geographic wage index will only experience a maximum 5% reduction to their 2024 wage index, as there is a 5% cap on any decrease to the wage index from the prior year,” CMS stipulated.
The rule language also acknowledged public comments on a potential payment mechanism for high-intensity palliative care services. Including palliative dialysis, chemotherapy, radiation and transfusions, among other treatments.
Quality reporting changes
The final rule includes two new measures in the Hospice Quality Reporting Program (HQRP), implemented through the new Hospice Outcomes & Patient Evaluation (HOPE) tool. The measures include assessment around timely follow-up for pain impact and for non-pain symptom impact.
Beginning in 2025, CMS will implement the HOPE tool, which replaces the Hospice Item Set (HIS).
The final rule adopts and implements HOPE’s patient-level data collection tool, which gathers quality insights across multiple points through a hospice stay including admission and discharge.
“These process measures address hospice care delivery as they document whether a follow-up visit occurred within 48 hours of an initial assessment where there was an impact of moderate or severe symptoms with and without pain,” CMS said.