Fiscal Year 2021 Hospice Payment Rate Update Proposed Rule CMS-1733-P)
On April 10, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (CMS-1733-P) that would update fiscal year (FY) 2021 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. CMS is publishing this proposed rule consistent with the legal requirements to update Medicare payment policies for hospices on an annual basis. CMS recognizes that the entire healthcare system is focused on responding to the COVID-19 public health emergency. As a result, the proposed rule includes proposals required by statute and that affect Medicare payment to hospices, as well as proposals that reduce provider burden and may help providers in the COVID-19 response.
This proposed rule would set forth routine updates to hospice payments for FY 2021, in accordance with existing statutory and regulatory requirements. These updates include routine technical rate-setting updates to the hospice base payment rates and aggregate cap amount as well as a proposal to adopt the most recent Office of Management and Budget (OMB) statistical area delineations and apply a 5 percent cap on wage index decreases. In addition, this rule provides 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.
2019 Coronavirus (COVID-19) Outbreak
The health and safety of America’s patients and provider workforce in the face of the Coronavirus Disease 2019 (COVID-19) outbreak is the top priority of the Trump Administration and CMS. We are working around the clock to equip the American healthcare system with maximum flexibility to respond to the 2019 Novel Coronavirus (COVID-19) pandemic. Recently, at President Trump’s direction, CMS issued an unprecedented array of temporary regulatory waivers and new rules to equip the American healthcare system with maximum flexibility to respond to the COVID-19 pandemic, including more flexibility for hospices to furnish services via a telecommunications technology in order to minimize exposure risk for clinicians, patients, and the general public.
To keep up with the important work the Task Force is doing in response to COVID-19, go to . For information specific to CMS, please visit the .
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.
CMS encourages comments on this proposed rule and will accept comments until June 9, 2020. The proposed rule (CMS‑1733-P) can be downloaded from the Federal Register at:
Under section 1888(e)(4)(G)(ii) of the Act, we adjust the federal rates to account for differences in area wage levels. We proposed to adopt revised geographic delineations provided by the Office of Management and Budget, which are used to identify a beneficiary’s location to calculate the wage index.
CMS is providing model examples of the hospice election statement and the hospice election statement addendum that reflect the changes finalized in the FY 2020 hospice final rule (84 FR 38520) to assist hospices in understanding the content requirements for hospice elections beginning on and after October 1, 2020. These requirements were finalized in order to increase coverage transparency for beneficiaries electing the Medicare hospice benefit.
Routine Annual Rate Setting Changes
As proposed, hospices would see a 2.6 percent ($580 million) increase in their payments for FY 2021. The proposed 2.6 percent hospice payment update for FY 2021 is based on an estimated 3.0 percent inpatient hospital market basket update reduced by the multifactor productivity adjustment (0.4 percentage points.) Hospices that fail to meet quality reporting requirements receive a 2 percentage point reduction to the annual market basket update for the year.
The hospice payment system includes a statutory aggregate cap. The aggregate cap limits the overall payments per patient made to a hospice annually. The proposed hospice cap amount for the FY 2021 cap year is $30,743.86, which is equal to the FY 2020 cap amount of $29,964.78 updated by the proposed FY 2021 hospice payment update percentage of 2.6 percent.
The proposed rule went on display on April 10, 2020 at the Federal Register’s Public Inspection Desk and will be available under “Special Filings,” at
For further information, see the hospice center webpage:
Public comments on the proposal will be accepted until June 9, 2020.
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