MLN Matters Number: MM8876 Related Change Request (CR) #: CR Related CR Transmittal #: R3023CP Implementation Date: October 6, 2014
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1 DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services MLN Matters Articles Index: Have you ever tried to search MLN Matters articles for information regarding a certain issue, but you did not know what year it was published? To assist you next time in your search, try the CMS article indexes that are published at on the CMS website. These indexes resemble the index in the back of a book and contain keywords found in the articles, including HCPCS codes and modifiers. These are published every month. Just search on a keyword(s) and you will find articles that contained those word(s). Then just click on one of the related article numbers and it will open that document. Give it a try. MLN Matters Number: MM8876 Related Change Request (CR) #: CR 8876 Related CR Release Date: August 11, 2014 Effective Date: October 1, 2014 Related CR Transmittal #: R3023CP Implementation Date: October 6, 2014 Update to Hospice Rates, Hospice Cap, Hospice Wage Index, Quality Reporting Program and the Hospice Pricer for Fiscal Year (FY) 2015 Provider Types Affected This MLN Matters Article is intended for physicians and providers submitting claims to Medicare Administrative Contractors, including Home Health & Hospice (HH&H) MACs, for services provided to Medicare beneficiaries. Provider Action Needed Change Request (CR) 8876 informs MACs about changes that update the hospice s, hospice wage index, and Pricer for FY 2015, and that update the hospice cap amount for the cap year ending October 31, Make sure your billing staffs are aware of these changes. This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accu statement of their contents. Page 1 of 5
2 Background s for hospice care, the hospice aggregate cap amount, and the hospice wage index are updated annually. The law governing the for hospice care requires annual updates to the hospice s. Section 1814(i)(1)(C)(ii) of the Social Security Act (the Act) stipulates that the s for hospice care for fiscal years after 2002 will increase by the market basket percentage increase for the fiscal year (FY). This methodology has been codified in regulations found at 42 CFR (a)-(b). The Affordable Care Act of 2010 (ACA) requires that beginning in FY 2013, the market basket update be reduced by a productivity adjustment. Additionally, ACA requires that in FY 2013, the market basket update also be reduced by 0.3 percentage point. These ACA changes are now part of the Act at section 1814(i)(1)(C)(iv). Hospice Aggregate Cap The Hospice Aggregate Cap amount is updated annually in accordance with 1814(i)(2)(B) of the Act and provides for an increase (or decrease) in the hospice cap amount. Specifically, the cap amount is increased or decreased for accounting years after 1984 by the same percentage as the percentage increase or decrease, respectively, in the Medical Care expenditure category of the Consumer Price Index for all Urban Consumers. Hospice Wage Index The Hospice Wage Index is used to adjust s to reflect local differences in wages according to the revised wage index. The Hospice Wage Index is updated annually as required by 42 CFR (c) and as discussed in hospice rulemaking. The August 6, 2009, FY 2010 Hospice Wage Index final rule finalized a provision to phase out the Budget Neutrality Adjustment Factor (BNAF) over seven years, with a 10 percent reduction in the BNAF in FY 2010, and an additional 15 percent reduction in each of the next six years, with complete phase out in FY Quality Reporting Program Section 3004 of the Affordable Care Act amended the Act to authorize a quality reporting program for hospices. Section 1814(i)(5)(A)(i) of the Act requires that beginning with FY 2014 and in each subsequent FY, the Secretary shall reduce the market basket update by 2 percentage points for any hospice that does not comply with the quality data submission requirements with respect to that FY. The annual hospice updates will be implemented through the Hospice Pricer software found in the intermediary standard systems. The new Pricer module will apply the existing calculation to the updated s shown below. An updated table will be installed in the module, to reflect the FY 2015 hospice wage index. or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accu statement of their contents. Page 2 of 5
3 FY 2015 Hospice Rates Code The FY 2015 s will be the FY 2014 s, increased by 2.1 percent, which is the final hospital market basket update for FY 2015 (2.9 percent) less a productivity adjustment of 0.5 percentage point, less 0.3 percentage point. The FY 2015 hospice s are effective for care and services furnished on or after October 1, 2014, through September 30, Reference to the hospice is discussed further in the "Medicare Claims Processing Manual," Chapter 11, Processing Hospice Claims, Section 30.2 which can be viewed at loads/clm104c11.pdf on the CMS website. Table 1: FY 2015 Hospice Rates Updated by the Estimated Hospice Update Percentage Description FY 2014 Rates Increase by the FY 2015 final hospice update of 2.1 percent FY 2015 final Rate Labor Share of the final Non-Labor share of the final Routine Home Care Continuous Home Care: Full applies to 24 hours of care. Hourly =$38.75 Inpatient Respite Care General Inpatient Care $ x1.021 $ $ $49.86 $ x1.021 $ $ $ $ x1.021 $ $89.21 $75.60 $ x1.021 $ $ $ or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accu statement of their contents. Page 3 of 5
4 Beginning in FY 2014, hospices which fail to report quality data will have their market basket update reduced by two percentage points. Table 2 shows the s for these hospices. Table 2: Hospice Update Percentage for Hospices That DO NOT Submit the Required Quality Data Code Description FY 2014 Rates Increase by the FY 2015 hospice update percentage of 2.1 percent minus 2 percentage points =0.1 FY 2015 Rate Labor Share of the final Non-Labor share of the final 651 Routine Home care 652 Continuous Home Care: Full applies to 24 hours of care. Hourly =$ Inpatient Respite Care 656 General Inpatient Care $ x1.001 $ $ $48.88 $ x1.001 $ $ $ $ x1.001 $ $87.46 $74.12 $ x1.001 $ $ $ Hospice Cap The latest hospice cap amount for the cap year ending October 31, 2014, is $26, In computing the cap, CMS used the March 2014 Consumer Price Index for All Urban Consumers (CPI-U) from the Medical Care expenditure category, published by the Bureau of Labor Statistics ( which was The hospice cap is discussed further in the "Medicare Claims Processing Manual," Chapter 11, Processing Hospice Claims, Section Hospice Wage Index The FY 2015 Hospice Wage Index final rule will be effective October 1, 2014, and published on the CMS website at /Hospice/Hospice-Regulations-and-Notices-Items/CMS-1609-F.html before that date. The or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accu statement of their contents. Page 4 of 5
5 revised wage index and s will be incorpod in the hospice Pricer and forwarded to the intermediaries following publication of the wage index final rule. Additional Information The official instruction, CR 8876 issued to your MAC regarding this change, is available at Guidance/Guidance/Transmittals/Downloads/R3023CP.pdf on the CMS website. If you have any questions, please contact your MAC at their toll-free number. That number is available at work-mln/mlnmattersarticles/index.html under - How Does It Work. or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accu statement of their contents. Page 5 of 5
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