Payment Update

With updated data, the payment update has changed slightly from the estimates in the proposed rule. Medicare hospice services will receive a 2.6% update based on an estimated inpatient hospital market basket update of 3.0% reduced by a required multifactor productivity adjustment of 0.4%. CMS estimates this to be an aggregate increase of $520 million in FY 2020. After the payment update the hospice cap amount increases to $29,964.78.

Rate Rebasing

Indicating that payment rates for CHC, GIP, and IRC have been lower than average costs to provide those levels of care, CMS is increasing the rates for those three levels. Due to a requirement to make that change in a budget-neutral manner, the rates for routine home care (RHC) are being reduced.

The calculations to more accurately align payment with costs indicate a 36.6% increase to CHC, a 161.2% increase to IRC, and a 31.0% increase to GIP. To implement these rate adjustments in a budget-neutral manner, CMS is decreasing RHC rates by 2.72%. Taking into account the rebasing and payment update FY 2020 base rates are as follows:

Using simulated payments based on FY 2018 utilization, that only include payments related to the level of care and do not include payments related to the service intensity add-on, CMS has made available a provider level impact file, available for download. That tool, as well as the final wage index, is on the CMS hospice website about the final rule.

Election Statement and Addendum

The proposal to modify the election statement and include an addendum titled “Patient Notification of Hospice Non-Covered Items, Services, and Drugs” is included in the final rule but the effective date for implementation has been postponed until FY 2021 to allow additional consideration of operational and logistical issues. The information that will be required is:

• Information about the holistic, comprehensive nature of the Medicare hospice benefit
• A statement that, although rare, there could be necessary items, drugs or services that will not be covered by the hospice because they are determined to be unrelated to the terminal illness or related conditions
• Information about beneficiary cost-sharing for hospice services
• Notification of the beneficiary’s right to request an election statement addendum that includes information and rationale for why the hospice has determined items, drugs, or services unrelated to terminal illness

In the final rule, CMS has expanded on the timeframes from the proposed rule, moving the initial completion of the addendum to within 5 days of the time of election and 72 hours if the request comes during any other time when a beneficiary is in the hospice benefit. The addendum must contain:

1. Name of the hospice
2. Beneficiary’s name and hospice medical record identifier
3. Identification of the beneficiary’s terminal illness and related conditions
4. A list of the beneficiary’s current diagnoses/conditions present on hospice admission (or upon plan of care update, as applicable) and the associated items, services, and drugs, not covered by the hospice because they have been determined by the hospice to be unrelated to the terminal illness and related conditions
5. A written clinical explanation, in language the beneficiary and his or her representative can understand, as to why the identified conditions, items, services, and drugs are considered unrelated to the terminal illness and related conditions and not needed for pain or symptom management
6. References to any relevant clinical practice, policy, or coverage guidelines
7. Information on the following domains:
   1. Purpose of Addendum
   2. Right to Immediate Advocacy
8. Name and signature of Medicare hospice beneficiary (or a representative) and date signed, along with a statement that signing this addendum (or its updates) is the only acknowledgment of receipt of the addendum (or its updates) and not necessarily the beneficiary’s agreement with the hospice’s determinations