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April 17, 2020
Health Law Weekly

CMS Proposes 2.6% Increase in FY 2021 Medicare Payments to Hospices

  • April 17, 2020

The Centers for Medicare & Medicaid Services (CMS) published April 15 a proposed rule (85 Fed. Reg. 20949) that would update the hospice wage index, payment rates, and cap amount for fiscal year (FY) 2021. Hospices would see a 2.6% ($580 million) boost in Medicare payments in FY 2021 under the proposed rule.

The estimated increase reflects a 3.0% market basket update reduced by a 0.4 percentage point multifactor productivity adjustment, according to a CMS fact sheet.

“While CMS is focused on helping the healthcare system respond to the COVID-19 pandemic, we are releasing the annual Medicare payment rules as required by law to ensure providers are informed on the 2021 payment updates,” the agency said.

The proposed rule also would set the cap amount for FY 2021 at $30,743.86, which is equal to the FY 2020 cap amount of $29,964.78 updated by the proposed FY 2021 hospice payment increase of 2.6%, according to the fact sheet. The statutory aggregate cap limits overall payments made to a hospice annually.

CMS also is proposing to adopt the most recent Office of Management and Budget statistical area delineations and apply a 5% cap on wage index decreases. The proposed rule includes model examples of the hospice election statement and the hospice election statement addendum to reflect the changes finalized in the FY 2020 hospice final rule for elections on or after October 1, 2020, CMS said.

Last year’s final payment rule required hospices to include additional information in election statements to help patients make an informed choice when deciding to elect hospice.

Comments on the proposed rule are due June 9.

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