The U.S. Centers for Medicare & Medicaid Services (CMS) has set a 2.3% base payment rate increase for hospices for 2027.
This amount is slightly less than the 2.4% the agency originally proposed. The finalized hospice cap amount for FY 2027 is $36,174.75.
The final rule also establishes a service and spending variation index (SSVI). The SSVI includes a scoring system using nine claims-based measures, each representing different aspects of hospice utilization as well as non-hospice spending. This is designed to identify hospices in need of increased transparency and oversight.
“CMS has seen non-hospice spending continue to rise in recent years. In response,” the agency indicated in a statement. “CMS developed a service and spending variation index (SSVI), using metrics collected from claims data, that can signal potentially inappropriate utilization or concerns with quality of care or compliance. The SSVI uses a scoring system, with a higher score representing potential concerning hospice utilization and non-hospice spending.”
CMS plans to use the information gathered through the SSVI for data analysis that could help beneficiaries make informed decisions and support program integrity efforts, the agency indicated.
In addition, CMS is adding an icon to the Medicare Care Compare website to identify hospices that do not submit quality data – or that submit less than the required 90% to the Hospice Quality Reporting Program. Providers that do not submit these data already receive a 4% payment reduction.
The rule also requires that hospices furnish all patients and families with an addendum to the election statement when they enroll in hospice. Previously, CMS required hospices to provide this addendum upon request.
“Medicare non-hospice spending for beneficiaries who have elected the hospice benefit has shown substantial and consistent growth from FY 2020 through FY 2024, with particularly dramatic increases in Part A and B spending,” CMS said in a statement. “This may suggest that the policy requirement stipulating that hospices only provide the addendum to beneficiaries (or their representatives) that request it — rather than every beneficiary who elects the benefit — has not achieved the intended accountability objective of ensuring that hospices provide virtually all care needed by terminally ill individuals as required under the comprehensive and holistic Medicare hospice benefit.”
